ID Form 4972 2024-2025

ID Form 4972: What You Should Know

INDIVIDUAL RETURNS. If the taxpayer did not receive a lump-sum distribution on or before December 7, 2014, (including a payment in advance of receiving a lump-sum distribution) then the tax due is equal to 5.25 per cent of the gross receipts from such distribution. The tax due is reduced by the amount of the payment. The tax in this case is reduced to 5.25 per cent of the gross receipts from the first qualified distribution received after December 7, 2014. Source: Internal Revenue Service. Other Forms of Retirement Annuity Compensation Income Tax When calculating the tax owing for an annuity, or pension income, based on the income received from a qualified retirement account, or a qualified pension plan, use IRS Form 1042. This tax-free income calculation is for a retirement annuity that's payable on a tax-deferred basis. Form 1042. 1042. (a) Qualified Retirement Accounts and Qualified Pension Plans. A qualified retirement account or a qualified pension plan is any plan that (1) provides for payment of regular payments at a regular age and (2) is not a cash or dividend plan. A cash or dividend plan is a plan in which payments are made only in cash and a regular payment is no more than the least of (1) 1/12 of the amount of the periodic payments, or (2) 1,000,000 with a 6-month or shorter time horizon. (b) Qualified Plan Distribution. For purposes of this section, a qualified distribution to a qualified retirement account or qualified pension plan (each, a “qualified pension plan”) is any distribution made on or before November 11, 2014, plus any income from such distributions. Any distribution, other than a distribution in excess of the aggregate amount allowed for such qualified retirement account or qualified pension plan on a joint return, is treated as an overpayment from such account or plan to the extent attributable to such distribution. Treatment of Excess Distributions. A qualified distribution of amounts from more than one qualified retirement account or qualified pension plan may be taken into account under this section. For example, if the qualified plan provides a 6-month payment, such amount attributable to a qualified distribution from a qualified retirement account or qualified pension plan in which no beneficiary has an amount for the calendar month in which the qualified distribution was made may be taken into account, provided the distribution was made in a calendar month. (d) Rules for Pension Plans.

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