FAQs: Frequently Asked Questions
Yes. You can split your monthly benefits into no more than two different accounts. In order to do so, you would simply need to complete two Direct Deposit Authorization Forms and indicate on one of them specifically how much you would like to be deposited into that account. The rest of your benefits would then be deposited into your other account.
Direct deposit statements are only mailed out if the amount of the deposit changes from the previous month. This typically occurs when your insurance rates change, you get a COLA or if the IRS tax tables are adjusted.
No. Social Security will not reduce your unemployment and unemployment will not reduce your Social Security benefits.
No. You will always receive your full retirement from the PCRA. However, if you qualify for unemployment, your unemployment may be reduced because of your retirement.
Your retirement will always be taxable on the federal level, but if you live in Massachusetts, your retirement will not be taxed on the state level. If you are planning to move out of state, you should check with that state’s Department of Revenue to inquire about the taxability of your PCRA pension.
As an active member, your health insurance premiums were withheld by your employer on a pre-tax basis. As a retiree, the IRS requires that a retiree’s insurance premium be withheld on an after-tax basis.
This amount is your non-taxable amount for that tax year as calculated by the Simplified General Rule or Method. It is the difference between your Gross Distribution (box 1) and your Taxable Amount (box 2a). This amount will be the same every year after the first year you collect 12 months of retirement payments.
While the net pension check that you receive from the PCRA may increase or decrease based on your insurance rates, the PCRA is not your insurance provider. Any questions in regards to your insurance rates or plan coverage should be directed to your former employers’ HR/Payroll department for details.
The reason for this may be the fact that you are collecting a superannuation retirement and you turned 59 1/2 during the calendar year. If this has happened, the IRS codes each Form 1099-R before and after 59 1/2 differently in box 7, one a 2 (before 59 1/2) and the other a 7 (after 59 1/2). Both Form 1099-Rs need to be reported to the IRS when doing your returns. This will be the only time that you would receive two Form 1099-Rs during your retirement.
Not all retirements will have this, but if there is a difference between your Gross Distribution (box 1) and your Taxable Amount (box 2a) on your Form 1099-R, it could mean one of a couple of things.
First, it could simply mean that you had some after-tax contributions in your account at the time of your retirement or the original member did if you are collecting a survivor benefit. Since those contributions have already been taxed, you do not have to pay taxes on them again, however, the IRS spreads the non-taxable amount over a number of years based on the Simplified General Rule or Method.
The second reason is that you are collecting an accidental disability retirement. An accidental disability retirement consists of annuity and pension just like a superannuation retirement, however, only the annuity portion of this retirement is taxable.