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Frequently Asked Questions Retirement

How is my annuity taxed if I pay a court-ordered apportionment to a former spouse?

You are taxed on your gross annuity according to your most current W4-P tax marital status election on file. You can change your election at anytime.

Go to www.servicesonline.opm.gov or email us at retire@opm.gov.

Your 1099R will reflect a reduction in your gross annuity after your retirement application is finalized based on the amount of apportionment that you pay your former spouse. There will be a footnote on the 1099R stating the amount of the apportionment paid to your former spouse for the year.

Because your annuity is subject to a court ordered apportionment, OPM does not calculate the taxable portion of your annuity. The 1099R will show ‘Unknown’ in the 2.b ‘Taxable Amount’ box. 

You may wish to speak with a representative at the Internal Revenue Service or a tax advisor to help you calculate the tax-free portion of the calculation. Current tax tables for this year are available in Internal Revenue Publication 15. You may view this publication on line by accessing the IRS web site at www.irs.gov. You may also call the IRS toll free for tax advice at: 1-800-829-1040 (agent). 

Your former spouse must report the amount of apportionment he/she receives as taxable income and is required to pay taxes on these funds. Apportionment monies cannot be used as alimony deductions on a tax return.

Please note it is your responsibility to make sure enough federal income tax is withheld from your annuity and to check the amount of tax withheld early in the year to be sure you are paying the correct amount.

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