About your 1099-R tax form

How to read your 1099-R Form

I received more than one 1099-R Form from the MTRS. Why?

Does the MTRS give tax advice?

What should I advise my family or executor to do in the event of my death?

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How to read your 1099-R Form

While we have included an informational insert with your 1099-R Form, below is additional information that we hope you find helpful in reading your 1099-R Form.

• Box 1, Gross distribution: This shows the total distribution amount that you received from the MTRS for the calendar year 2008.
• Box 2a, Taxable amount: This shows the distibution amount that is taxable. If part of your distribution is not taxable, the nontaxable amount will be displayed in Box 5. If there is no amount in Box 5, the MTRS may not have all the necessary information to determine the taxable amount. In that case, in Box 2b, “Taxable amount not determined” will be checked.
• Box 2b: If “Taxable amount not determined” is checked, then the MTRS did not have all of the necessary information to determine the taxable amount, and Box 2a will be blank (see Box 2a, above). In this case, you should determine the non-taxable amount yourself. You may find additional information on how to calculate the non-taxable portion of your benefit in IRS Publication 575 or in the 1040 Workbook under the heading of “Pension Annuity Income.” The other box, “Total distribution,” is checked when there are no further distributions payable to you from the MTRS. For example, the 1099-R issued in the year of a retiree’s death would display “Total distribution” to let the IRS know that the retiree’s monthly benefit payments have ceased.
• Box 3: Not applicable for MTRS retirees.
• Box 4, Federal income tax withheld: This shows the total amount of federal income tax withheld for calendar year 2008.
• Box 5, Employee contributions/Designated Roth contributions or insurance premiums: The title of Box 5 does not accurately reflect what it means for retirees of the Massachusetts Teachers’ Retirement System—in our case it is not related to insurance or employee contributions. Box 5 actually represents the portion of after-tax money you are entitled to exclude from your Gross Distribution (in Box 1) for calendar year 2008. It is equal to the difference between your taxable amount (in Box 2a) and the total Gross Distribution (in Box 1). The amount in Box 9b, if any, represents the remaining total after-tax contributions that you will be allowed to exclude over your lifetime. For the amount withheld for your insurance premiums, if any, please see Insurance, below.
• Box 6: Not applicable for MTRS retirees.
• Box 7, Distribution code: This IRS code identifies the type of distribution you received from the MTRS. The codes are also described on the back of your 1099-R Form.
  • 2 : Applies to certain distributions including regular retirement benefits paid to retirees under the age of 59-1/2.
  • 3 : Identifies disability retirement distributions.
  • 4 : Identifies payments received by a survivor, beneficiary or estate of a deceased member or retiree.
  • 7 : Identifies payments to retirees over the age of 59-1/2.
• Boxes 8 and 9a: Not applicable for MTRS retirees.
• Ins. (Insurance): If any amount was withheld for your group insurance in 2008, the total will be listed next to “Insurance” in the box in the lower left corner of your 1099-R. We provide this information as a service to you, to assist you in preparing your taxes; we have not provided this information to the IRS.

As noted in the paragraph above, your total insurance withholding for 2008, if any, is listed in the lower left corner of your 1099-R. If you itemize deductions, then this figure can be used for Schedule A. Do not use the figure in Box 5, which, for our retirees, is not related to insurance. The figure in Box 5, if any, represents the portion of your after-tax contributions that you are entitled to exclude from your Gross Distribution (in Box 1) for calendar year 2008. It is equal to the difference between your taxable amount (in Box 2a) and the total Gross Distribution (in Box 1). The amount in Box 9b, if any, represents the remaining total after-tax contributions that you will be allowed to exclude over your lifetime.

Note to recent retirees: When you were an active educator, your health insurance premiums may have been withheld on a pre-tax basis. The IRS requires that retirees’ insurance premiums be withheld on an after-tax basis.

Your insurance is administered either by the Group Insurance Commission or your local school district. To determine which agency administers your insurance, look at the Voluntary Deductions portion of your pension check or Direct Deposit statement. If your deduction is listed under:

• GIC or GICD, contact the Group Insurance Commission at
  617-727-2310, ext. 6, with any questions.
• MEDICAL D, MEDICAL 1, DENTAL, LIFE INSU or OPTIONAL,
  contact your school district for information.

I received more than one 1099-R Form from the MTRS. Why?

It is not unusual to receive more than one 1099-R for a tax year. This can occur as a result of one of the following:

• You reached age 59-1/2 during the tax year. (Exception: if you are receiving accidental disability benefits, then you will receive only one 1099-R for the year during which you reached age 59-1/2.)
• You are receiving your own MTRS retirement benefit and a survivor benefit from a former MTRS member.
• You are receiving your own MTRS retirement benefit and, as a result of a Qualified Domestic Relations Order (QDRO), you are also receiving a benefit from another MTRS member.
• You are receiving an MTRS ordinary disability retirement benefit and you turned age 55 during calendar year 2008.
• In addition to a benefit payment, you also received a refund payment from the MTRS.

I received two 1099-R forms because I turned 59-1/2 during the tax year. Why—and what does this mean?

In the tax year in which you turn 59-1/2, you will receive two 1099–R forms from us, as the IRS requires that we identify and distinguish between payments that are made to you when you are under age 59-1/2, and payments that are made to you when you are over age 59-1/2. Accordingly, please note:

• Each form will be different: One will reflect the amount totals for the months that you were under age 59-1/2, and will have a distribution code of 2 in Box 7; the other will reflect the amount totals for the month in which you turn 59-1/2 as well as for the following month(s) that you were over age 59-1/2, and have a distribution code of 7 in Box 7.
• You will need both forms to determine your tax reporting information for the year: To get your annual totals, simply add the different amounts on the two forms. For example, to determine the total amount that you received from the MTRS for the year, add the figure in “Box 1, Gross distribution,” on one form to the figure in “Box 1, Gross distribution,” on the other.

No. You should seek advice from a professional tax advisor or the Internal Revenue Service.

What should I advise my family or executor to do in the event of my death?

He or she should call or write to us. We will then advise him or her of the next steps.