Carpenters Individual Account Pension Plan

Taxes and Rollovers 

The amount credited to your account and the earnings on your account are not considered taxable income to you until you actually receive the money. The form of payment you receive also affects the taxation of your account.

If you receive a lump sum payment, period certain payment of less than ten years, minimum annual payment of less than ten years, split distribution, and certain preretirement death benefit payments, the plan is required to withhold 20 percent for federal income tax. However, these types of payments are eligible for a rollover into an Individual Retirement Account (IRA) or eligible retirement plan willing to accept the benefits. If you roll over the benefits, and meet the requirements of the Internal Revenue Code (IRC), withholding is not mandatory. You will be given complete information when you apply for benefits, as well as the opportunity to elect a rollover.

Retirement Services will automatically provide you with a Form 1099-R in late January of each year in which you receive a distribution (or make a direct a rollover) for the upcoming April 15 tax deadline.

Key Point

Any non-periodic payment from this plan of less than ten years is subject to a 20 percent mandatory federal income tax withholding, unless it is rolled over to an Individual Retirement Account (IRA) or eligible retirement plan.

Last Updated: 07/21/2021