Publication 721 |
2000 Tax Year |
Introduction
This publication explains how the federal income tax rules apply to
civil service retirement benefits received by retired federal
employees (including those disabled) or their survivors. These
benefits are paid primarily under the Civil Service Retirement System
(CSRS) or the Federal Employees' Retirement System (FERS).
Tax rules for annuity benefits.
Part of the annuity benefits you receive is a tax-free recovery of
your contributions to the CSRS or FERS. The rest of your benefits is
taxable. If your annuity starting date is after November 18, 1996, you
must use the Simplified Method to figure the taxable and tax-free
parts. If your annuity starting date is before November 19, 1996, you
generally could have chosen to use the Simplified Method or the
General Rule. See Part II, Rules for Retirees.
Thrift Savings Plan.
The Thrift Savings Plan (TSP) provides federal employees with the
same savings and tax benefits that many private employers offer their
employees. This plan is similar to private sector 401(k) plans. You
can defer tax on part of your pay by having it contributed to your
account in the plan. The contributions and earnings on them are not
taxed until they are distributed to you. See Thrift Savings Plan
in Part II.
Comments and suggestions.
We welcome your comments about this publication and your
suggestions for future editions.
You can e-mail us while visiting our web site at
www.irs.gov/help/email2.html.
You can write to us at the following address:
Internal Revenue Service
Technical Publications Branch
W:CAR:MP:FP:P
1111 Constitution Ave. NW
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would be
helpful if you would include your daytime phone number, including the
area code, in your correspondence.
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