Tax on retirement benefit
When you retired, you completed a form giving SDCERA
instructions regarding if and how you want income
tax withheld from your retirement payments. You may elect to
have or not to have federal and/or California state tax
withheld at any rate you choose. SDCERA does not withhold
income tax for states other than California.
send you an IRS Form 1099-R tax statement each year in late January. IRS Form 1099-R contains detailed information regarding your
retirement income from the previous year, and is necessary
to complete your federal and state tax returns.
Most of your monthly retirement benefit is taxable. The
retirement contributions you made beginning January 1, 1997, all
interest earnings and all of the Countyís contributions
you receive in the form of a monthly benefit payment during
retirement are taxable.
The retirement contributions you made prior to 1997,
however, were made on an after-tax basis. This portion of
your retirement will not be taxed.
The Internal Revenue Service allows you to recover this
amount on a nontaxable basis, but not all at once. The
nontaxable amount of your monthly benefit is reflected on
your monthly earnings statement as Basic Allowance
Non-Taxable. This calculation of the nontaxable amount is
effective with the start date of your benefit payment and
remains constant, even though your monthly payment may
increase due to cost-of-living adjustments. Your nontaxable
exclusion ends when you have received the total amount of
your after-tax employee contributions. Then, the entire retirement benefit will be fully
taxable. Please note that the calculation factors used are
taken from federal tax laws, which are subject to change.
If you donít have an estimate either from a retirement
meeting or individual request, you can request your
after-tax contributions in writing. Send your request to:
Attn: Member Services
2275 Rio Bonito Way, Suite 200
San Diego, CA 92108-1685
Please allow up to two weeks for a written response.