Because of how frequently tax laws change and the complexity of the tax laws applicable to Annuity Plan distributions, it’s always a good idea to consult a qualified tax advisor before receiving a distribution from the Annuity Plan.
How your benefit is taxed depends on how and when you receive your distribution from the Annuity Plan. Before the Plan makes a taxable payment to you or your beneficiary, the Plan will provide you with a tax notice. This notice explains the tax rules that apply to distributions from the Plan. It also informs you that you have the right to have your lump-sum taxable payment:
- Paid directly to you,
- Paid as a “direct rollover” to an eligible retirement plan, or
- Split between payment to you and payment as a direct rollover.
To determine what may be the best way for you to receive payment of your account and the tax consequences of the benefits you receive, it’s a good idea to consult a qualified tax advisor.