A member applying for a disability benefit can elect whether or not federal income tax should be withheld from the disability benefit payment. Form W-4P, "Federal Income Tax Withholding Certificate,” is included with IMRF Form, ”Member’s Application for Disability Benefits.”
The member can access this form by visiting the Member Access area on IMRF's website (www.imrf.org).
Internal Revenue Service regulations require IMRF to issue IRS Form 1099-R reporting disability payments. Copies of the forms are sent to the member and one copy is filed with the Internal Revenue Service. IMRF’s classification of disability benefits and the reporting form are not to be interpreted as advice as to taxability of the benefit or qualification for the retirement income credit before age 65.
Generally, disability payments are reported on the line ”Wages” on the IRS 1040 or 1040A form, until the member reaches retirement age. After retirement age, the payments should be reported on the pension line of the IRS tax form.