Understanding Your Form 1099-R (MSRB)

The 2017 Form 1099-R’s have been mailed. Please allow at least two weeks for the U.S. mail to deliver it. If you don’t receive it by February 15th, please call our office.

FORM 1099-R UPDATE 

The 1099-R tax forms for 2017 were mailed January 31, 2018!
Please allow at least two weeks for the U.S. mail to deliver it. If you do not receive yours by February 15th, 2018, please notify the Board.

Did you know that you can also view your 1099-R on your PayInfo account?
Go to mass.gov/payinfo to log in to your account. Please note, although this is a handy item to have available for reference, it is not considered an official Form 1099-R and cannot be used to file your taxes. Therefore, be sure to hold on to the original hard copy that will be mailed to you.

Important information:

How will my 1099-R be impacted by MARIS?
As part of the MSRB’s transition to the MARIS computer system, certain programmatic changes were made to the Board’s tax reporting process. Please note that for most benefit recipients who received either a superannuation or “regular” retirement benefit, a survivor benefit or an ordinary disability benefit in 2017, you will notice your 2017 tax information is being reported in the same manner as 2016. The actual amounts being reported in boxes 1, 2a and 4 will reflect your 2017 amounts. Most of this group will also see the same distribution code in box 7. As always, box 5 will report your total 2017 paid health and dental insurance premiums.

Separately, below are some key changes that are relevant to the following three sets of benefit recipients:

1. Retired members who turned 59 ½ in 2017 will receive two Forms 1099-R. In most cases, the retirement allowance paid up until the month before you turned age 59 ½ will be reported on one Form 1099-R using distribution code 2, and the retirement allowance paid for the remainder of the year will be reported on a second Form 1099-R using distribution code 7. Information from both forms should be used for tax reporting purposes;

2. Accidental Disability Benefit Recipients (Member) or related Option C survivor recipients will see the gross retirement allowance paid in the tax year be reported in box 1. Previously the MSRB reported only the taxable annuity amount in this box;

3. Members who have a portion of their benefit issued to an alternate payee pursuant to a Qualified Domestic Relations Order (“QDRO”) will not have those payments included in box 1 of your Form 1099-R if the alternate payee is responsible for reporting his/her own income and taxes. Member distribution codes in box 7 will be either a 2 or a 7 depending on your age for the tax reporting year (see above item #1). The alternate payee will also receive a Form 1099-R that reports the total amount of QDRO payments received if applicable. Distribution code 2 will always be used in box 7 for the alternate payee, regardless of age.

Need help understanding your Form 1099-R?
Please refer to the descriptions and corresponding sections highlighted in blue below. If you have any further questions about your taxes, please seek advice from your professional tax advisor or the Internal Revenue Service. Employees of the State Retirement Board are not authorized to advise you on any tax issues.

Please refer to the descriptions below for the corresponding sections highlighted above.

  1. Payer's Federal Identifications Number: This is the Massachusetts State Retirement Board's federal Employer Identification Number (EIN).
  2. Box 1 - Gross Distribution: This shows the total distribution amount that you received from the Massachusetts State Retirement Board for the calendar year 2017.
  3. Box 2a - Taxable Amount: This shows the distribution amount that is taxable. Money that was deducted from your check for employee contributions to the pension plan are pre-tax and therefore taxable when paid. Some money may have been deducted after tax (for example, if you had bought back time). These amounts are recovered and will not be taxable. They will be deducted over an extended period from when you start receiving your pension and are equal to the difference between your gross and taxable distribution.
  4. Box 5 - Employee Contributions or Insurance Premiums: 2017 paid health & dental insurance premiums.
  5. Box 4 - Federal Income Tax Withheld: This is the total amount of federal income tax withheld from your benefit payment for the calendar year 2017.
  6. Box 7 - Distribution Code: This IRS code identifies the type of distribution you received from the Massachusetts State Retirement Board. The codes are also described on the back of your 1099-R Form. 
    • Code 1: Premature distribution subject to excise tax penalty (generally a lump sum distribution).
    • Code 2: Applies to certain distributions, including regular retirement benefits, that are eligible for the exception to the premature distribution tax. Code 2 is indicated for benefit recipients under the age of 59 1/2 for a reported year. 
    • Code 4: Identifies payments received for a survivor, beneficiary, or estate of a deceased member of a MSERS retiree. 
    • Code 7: Identifies payments for regular pension distributions for benefit recipients over the age of 59 1/2 for the reported calendar year. 
    • Code G: Identifies as a total distribution that was directly rolled over to a financial institution.  

Please note: MSRB Staff is not authorized to give you tax advice of any kind. If you have questions regarding your individual tax liability please contact a tax advisor or the IRS.

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