IMRF Tax and Topic Letters

The following IMRF letters address tax issues and other topics related to IMRF benefits. If you don't find an answer to your question here, you may want to consult your tax advisor or contact the Internal Revenue Service.

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Tax Letter 1: 1099-R - Box 5 -"Non-taxable payments" (Rev. 1/96)

• How does IMRF calculate the amount shown in Box 5 on your 1099R
• An explanation of "previously taxed contributions" and "non-taxable payments"

Tax Letter 2 - 1099-R - Box 2a - "General Rule" (Rev. 1/96)

• How does IMRF calculate the amount shown in Box 2a on your 1099R:
• An explanation of "previously taxed contributions,"and the "exclusion ratio"

Tax Letter 3 - Repealed, Not Applicable

The IMRF death benefit for retired members (Rev. 10/96)

• An explanation of the IRS "$5,000 Death Benefit Exclusion"
• How to report the death benefit payment for federal income taxes

Tax Letter 4 - The IMRF Lump Sum Death Benefit (Rev. 11/06)

• An explanantion of the IMRF lump sum death benefit and information about federal taxes on this benefit

Tax Letter 5 - 1099-R - How to transfer figures to 1040/1040A (Rev 12/2005)

• An explanation of the 1099-R you received from IMRF
• How to report IMRF benefit payments on IRS form 1040 or 1040A
  • Pension payments
  • Disability benefit payments
  • Refunds
  • Lump sum death benefit payments

Tax Letter 6 - How to report disability benefit payments on your Illinois and federal income tax return (Rev. 01/2004)

Tax/Topic Letter 7 - Can I contribute to an IRA? (Rev. 10/2007)

• How does your participation in IMRF affect your ability to contribute to an IRA?

Tax/Topic Letter 8 - Taxable and non-taxable portions of IMRF pensions
(Rev. 11/03)

• What portion of your pension is not subject to federal income tax:
• An explanation of IRS Simplified General Rule (Safe Harbor Calculation)

Tax Letter 9 - Member payments to IMRF (Rev. 01/2008)

• How to report a payment you made to IMRF on your federal income tax return (Pub.525 for 2003)

Tax Letter 10 - General Rule vs. Simplified General Rule (Rev. 4/96)

• An explanation of how a member or member's surviving spouse recovers the member's previously taxed contributions under the "General Rule" and under the "Simplified General Rule"

Tax Letter 11 - Member Portion of ERI payments (Rev. 1/96)

• An explanation of previously taxed and tax-deferred member contributions used to pay the member portion of ERI and how such contributions are illustrated on a member's Certificate of Benefits.

Tax Letter 12 - 3% Annual Increase (Rev. 03/2004)

• An explanation of how a benefit recipient's 3% annual increase is calculated each year. Also shows how a first year increase is calculated (pro-rated) for an individual who is retired less than one full year.

Tax Letter 13 - IMRF Benefit Payments Federal Income Tax Withholding (Rev. 12/2007)

• An explanation of why IMRF withholds federal income tax from a monthly pension or disability benefit, even though the member did not specify to IMRF that any amount be withheld.

Tax Letter 14 - EGTRRA Tax Credit and IMRF contributions (Rev. 09/2007)

• An explanation of why your IMRF contributions do not qualify for the "Saver's Tax Credit" under the Economic Growth and Tax Relief Reconciliation Act (EGTRRA).

Tax Letter 15 - When an Employer Pays for Member Past Service or ERI Costs (Rev. 02/08)

• An explanation of the impact on IMRF and federal reporting when an employer wants to pay for a member’s past service costs, or for a member’s Early Retirement Incentive (ERI) cost.

Tax/Topic Letter 16- Living Trust as a Beneficiary (Rev. 10/2007)

• An explanation of what happens when a member names a living trust as the beneficiary for IMRF death benefits.

Tax Letter 17- Issuing IRS W-2 forms to IMRF members (Rev. 02/2008)

• An explanation of how to fill out IRS Form W-2, "Wage and Tax Statement," for members who make contributions to IMRF.

Tax Letter 18 - Can an IMRF member take a tax deduction for purchasing IMRF past service or paying for ERI? (Rev. 02/08)

• An explanation of how to report the payment for purchased or reinstated IMRF service credit on an IMRF member's federal tax return.

Tax/Topic Letter 19- Supplemental Benefit Payment ("13th payment")
(Rev. 09/2007)

• A detailed explanation of the supplemental benefit payment ("13th payment") and how it is calculated.