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Retirement Planning
Chapter 11: Pension Plan Distributions/TAXATION OF DISTRIBUTIONS
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Chapter Study Session

Chapter 11: Pension Plan Distributions

TAXATION OF DISTRIBUTIONS

01.Core Concepts

General rule: Distributions from qualified plans are classified as ordinary income. • Except: • Direct rollovers of plan assets to IRAs or another qualified plan, • Adjusted basis in plan, • Annuities, • Certain lump-sum distribution options, and • Qualified domestic relations orders (QDRO) • Taxable distributions (from qualified plans) are subject to mandatory 20% income tax withholding.