All retirees collecting a benefit from our system, who live in Massachusetts, are not required to pay state income tax on their allowance. If you live outside of Massachusetts, you may be required to pay income tax in the state where you live. You may wish to review this link http://www.massretirees.com/article/issues/your-retirement/mass-pensions-and-income-taxes-other-states which provides information on how each state taxes retirement benefits.
Most retirees will have to pay Federal income tax on their allowance. Each January, we will send all retirees a 1099R form showing the total amount paid to you, the total amount of taxable income, and the total amount of Federal income tax already withheld. You will need this information in order to complete your tax return each year, so please let us know if you do not receive your form by the second week of February.
All retirees who paid into this system prior to January 1988 will have a small tax offset to reflect amounts withheld from their paycheck on a post-tax basis. This will be shown in box 5 of the 1099R form.
Not all benefits are fully taxable by the Federal government. Certain types of payments, such as Accidental Disability benefits and some survivor benefits may be partially or completely exempt from taxation. Please call our office if you have any questions about the type of benefit you are receiving and how much of your benefit is taxable.
Most Viewed Frequently Asked Questions
- What happens if I get a retroactive payment?
- Do I Have to Pay Taxes on My Retirement Allowance?
- Can I Work After Retirement?
- What is the most I can get as a retirement allowance?
- If I leave employment, can I leave my money in the system?
- When I am ready to retire, what should I do?
- Which Option do Most People Take?
- What Happens If I Go Part-Time?
- How Does the 2012 Pension Reform Affect Me?
- What should I know about naming a beneficiary?
- When will I receive my monthly retirement allowance?
- What is the process to apply for a refund?
- Do you invest my money?
- Why do I have to contribute to the Cambridge Retirement System?
- How could I be affected by “anti-spiking” regulations?
- What is the procedure if I want to buy back previous service time?
- What do I do if I change my bank account?
- Will there be any change to may retirement allowance if my spouse dies?
- What if I go to Florida in the winter, how will I get my 1099R in January?
- Who can make changes to my retirement information?
- Is there a difference in life expectancy between public safety employees and civilians?
- Do I have to notify the Retirement Board if I move?
- How can I change my direct deposit information?