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Tax Information

SDCERA does not provide tax advice. If you have questions about the taxability of your retirement benefit, please consult a qualified tax professional.

Taxation of SDCERA Retirement Benefits

A service retirement benefit is taxable.

A service-connected disability benefit, or a portion of it, is not taxable.

A nonservice-connected disability benefit is taxable.

Tax Withholding

SDCERA is required to withhold federal income tax from your benefit.

SDCERA is required to withhold state income tax for California residents.

SDCERA does not withhold state income tax from non-California residents.

You may change your tax withholding at any time. To do so, submit an SDCERA Tax Election for Monthly Retirement Payment form.

IRS Form 1099-R

Each January, SDCERA mails IRS Form 1099-R to retirees and any other benefit recipient. Form 1099-R contains detailed information regarding retirement income from the prior year necessary to complete annual federal and state income tax returns.

TEFRA (Tax Equity and Fiscal Responsibility Act) Annual Notice

The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) requires that SDCERA notify retired Members each year that they may change their tax withholding election. Click here to view the current TEFRA notice.