PBGC

[CaptBud330]

Does anyone know if the total amount of the benefits paid by the PBGC are taxable or just a percentage? Box 2a on form 1099-R (Taxable Amount) is left blank.
Thanks in advance.

 

[PITbull]

Does anyone know if the total amount of the benefits paid by the PBGC are taxable or just a percentage? Box 2a on form 1099-R (Taxable Amount) is left blank.
Thanks in advance.

I do not believe there is a tax paid on a defined pension by itself and if that is the only income. There are taxes paid above a certain income in a year for a retiree, including earned income,401K distribution, social security and then of course including pension etc...I am not sure of the amount one would reach to trigger taxes.

You can call the IRS to get that answer for the specifics.

 

[Seatacus]

Does anyone know if the total amount of the benefits paid by the PBGC are taxable or just a percentage? Box 2a on form 1099-R (Taxable Amount) is left blank.
Thanks in advance.

They should be taxable just like regular income. I'm not sure why the (taxable amount ) box is left blank.

 

[PITbull]

They should be taxable just like regular income. I'm not sure why the (taxable amount ) box is left blank.

Defined pension payment is NOT regular earned income, just as Social Sec. is not taxable in of itself. Unless in combination with EARNED income reaching a certain trigger.

 

[CaptBud330]

Defined pension payment is NOT regular earned income, just as Social Sec. is not taxable in of itself. Unless in combination with EARNED income reaching a certain trigger.

PITbull, I sent a PM. Bud

 

[PITbull]

My recommendation would be to call the PBGC.

 

[carl71]

Here is a link concerning the Federal Tax withholding. Hope it helps.

http://www.pbgc.gov/workers-retirees/trans...t/page5247.html

 

[PITbull]

Well, I called the PBGC, and I am definitely wrong...

The Pensions are taxable depending whether you want to pay it monthly or reconcile it at the end of the year. It also could be subject to state and local taxes depending on your state.

Wow, what a rip off! :down: Not only did our company dump the pension plans giving the retiree LESS income for retirment, but you get a double wammy from the gov. making pensions a taxable yearly event!! :angry:

Thanks Bud, for posting this. Now I have to plan on adding at least a min. of 5 more years to work before taking any retirement.

 

[FWAAA]

If your pension payment from USAir was taxable, the fact that the PBGC is now writing the checks instead of USAir doesn't alter that taxability.

Check with your tax advisor if you're unsure.

 

[wench1]

PB, Last month I CALLED PBGC..I was appalled when they DID say YES it is TAXABLE..

At the end of the year when you file you do get it back.
That bites big time..This is my pension that was earned..
:down: :down:

 

[CaptBud330]

PB, Last month I CALLED PBGC..I was appalled when they DID say YES it is TAXABLE..

At the end of the year when you file you do get it back.
That bites big time..This is my pension that was earned..
:down: :down:

You get what back...the Federal tax you paid on it?

 

[Seatacus]

You get what back...the Federal tax you paid on it?

Depends on your tax bracket and whether you had any taxes withheld during the year. If you had no taxes withheld during the year and your pension puts you in a bracket that is taxed you will owe some money. This is my opinion, I am not a tax consultant but I did stay at a Holiday Inn Express last night. 🙂

 

[CaptBud330]

Guess I answered my own question> I wrote to the PBGC and received this reply: "Thank you for contacting the Pension Benefit Guaranty Corporation, (PBGC).
The total amount of benefits paid by PBGC are taxable."

Damn!!!

 

[delldude]

You better make sure you either have taxes taken out or make estimated quarterly paymnets to your Uncle...or theres a penalty for anything over $1000.00 owed.

 

[TechBoy]

I must say that I'm rather surprised to see that people thought that defined benefit pensions and PBGC pensions would not be taxable income. It's income like any other income (such as 401k withdrawals) and should be taxed accordingly. Just be glad that there are no social security or medicare taxes.