Tax-Free Portion of an Annuity

Payments you receive under an annuity are partly tax-free, if you purchased it or it's a pension annuity you contributed to with after-tax dollars. Here's a worksheet that will calculate the tax-free amount, assuming the annuity started after November 18, 1996.

Enter the total pension or annuity payments received this year:
Enter the total amount you paid for the annuity or your after-tax contributions as of the annuity starting date:
Select Age at annuity starting date:
Number of months for which this year's payments were made:
Enter any amounts previously recovered tax free:
 

Results
Taxable amount for year:
Balance of cost to be recovered tax-free from future pension/annuity payments:

IRS says you should use the amount in Taxable amount for year even if the Form 1099-R received from the payor of the pension or annuity shows a larger taxable amount.

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