The proportion of an annuity payment from a qualified pension plan that is determined to have come from employee contributions is taxed at ordinary income rates.

Question

Quizplus · Accepted Answer

The portion of an annuity payment from a qualified pension plan that is considered a return of the employee's contributions is not taxed, as it is considered a return of the employee's own after-tax money. Only the earnings portion is taxed at ordinary income rates.

The Proportion of an Annuity Payment from a Qualified Pension