| Pub. 721, Tax Guide to U.S. Civil Service Retirement Benefits |
2004 Tax Year |
Introductory Material
This is archived information that pertains only to the 2004 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
What's New
Catch-up contributions to Thrift Savings Plan (TSP). Participants in the TSP who are age 50 or over at the end of the year generally can make catch-up contributions to the plan.
For 2004, the maximum
catch-up contribution is increased from $2,000 to $3,000. For 2005, the maximum is increased to $4,000.
Reminders
Rollovers. You can roll over certain amounts from the Civil Service Retirement System (CSRS), the Federal Employees' Retirement System
(FERS), or the TSP, to
a tax-sheltered annuity plan (403(b) plan) or a state or local government section 457 deferred compensation plan. See Rollover Rules in
Part II.
Rollover by surviving spouse. You may be able to roll over a distribution you receive as the surviving spouse of a deceased employee into a qualified retirement
plan or a
traditional IRA. See Rollover Rules in Part II.
Benefits for public safety officer's survivors. A survivor annuity received in 2004 by the spouse, former spouse, or child of a public safety officer killed in the line of
duty generally will be
excluded from the recipient's income. Survivor benefits received before 2002 were excludable only if the officer died after
1996. For more
information, see Dependents of public safety officers in Part IV.
Uniformed services Thrift Savings Plan (TSP) accounts. If you have a uniformed services TSP account, it may include contributions from combat zone pay. This pay is tax-exempt and
contributions
attributable to that pay are tax-exempt when they are distributed from the uniformed services TSP account. However, any earnings
on those
contributions are subject to tax when they are distributed. The statement you receive from the TSP will state the total amount
of your distribution
and the amount of your taxable distribution for the year. If you have both a civilian and a uniformed services TSP account,
you should apply the rules
discussed in this publication separately to each account. You can get more information from the TSP website,
www.tsp.gov, or the TSP Service Office.
Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of
missing children
selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children
home by looking at the
photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.
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 are 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 write to us at the following address:
Internal Revenue Service
Individual Forms and Publications Branch
SE:W:CAR:MP:T:I
1111 Constitution Ave. NW, IR-6406
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.
You can email us at
*[email protected]. (The asterisk must be included in the
address.) Please put “ Publications Comment” on the subject line. Although we cannot respond individually to each email, we do appreciate your
feedback and will consider your comments as we revise our tax products.
Tax questions.
If you have a tax question, visit
www.irs.gov or call 1-800-829-1040. We cannot answer tax questions at either
of the addresses listed above.
Ordering forms and publications.
Visit
www.irs.gov/formspubs
to download forms and publications, call 1-800-829-3676, or write to one of the three addresses shown under How To Get Tax Help in the back
of this publication.
Useful Items - You may want to see:
Publication
-
524
Credit for the Elderly or the Disabled
-
575
Pension and Annuity Income
-
590
Individual Retirement Arrangements (IRAs)
-
939
General Rule for Pensions and Annuities
Form (and Instructions)
-
CSA 1099R
Statement of Annuity Paid
-
CSF 1099R
Statement of Survivor Annuity Paid
-
1099-R
Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
-
5329
Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts
See How To Get Tax Help near the end of this publication for information about getting publications and forms.
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