Taxes
The following information is not intended to be tax advice. OPERS encourages all members to seek advice from a tax advisor on matters of taxation. Benefits from OPERS are considered income for federal and Oklahoma income tax purposes.
Federal and state laws require the Oklahoma Public Employees Retirement System (OPERS) to withhold income tax from your monthly retirement benefit unless you tell us in writing that you do not want taxes withheld. The tax rates applied to your benefit are based on withholding tables provided by the Internal Revenue Service and the Oklahoma Tax Commission.
Oklahoma State Income Tax
Under Oklahoma tax provisions, a portion of retirement benefits paid to an Oklahoma resident may be excluded from an individual taxpayer’s gross income each year. However, you may experience a different tax treatment if you reside in a state other than Oklahoma.
NOTE: If you live outside of Oklahoma and have state taxes withheld on your OPERS benefits, those amounts are remitted to the Oklahoma Tax Commission and not the taxing authority of your state of residence.
Federal Income Tax
If you have any accumulated nontaxable contributions (post-tax contributions) as of your retirement date, you will be able to reduce the taxable portion of your benefit to the extent of your nontaxable contributions in accordance with the Internal Revenue Service’s Safe Harbor provision. Generally, this method allows OPERS to spread your accumulated nontaxable contributions over your life expectancy or the joint life expectancies of you and your joint-annuitant. OPERS will calculate this exclusion for you, and the resulting taxable portion will appear on your Form 1099-R. However, you may consult IRS Publication 575 for more information about the Safe Harbor method.
1099-R Forms
OPERS will mail you a Form 1099-R at the end of January of each year. This form will show: 1) the gross amount of your retirement benefit for the previous calendar year; 2) the amount of state and federal income tax withheld from your retirement benefit; and, 3) the federal taxable amount of your retirement benefit for the year. The information contained in your Form 1099-R should be used in completing your state and federal income tax return. Click here for 1099-R frequently asked questions.
Federal and State Income Tax Withholding Instructions
You can indicate your tax withholding preferences by completing the Withholding Preference Certificate. This form allows you to choose separate preferences for federal and Oklahoma state taxes.
You may specify that you do not want taxes deducted from your benefit.
You may elect to have specific “allowances claimed” by indicating your marital status and number of allowances. By doing this, OPERS will determine the amount, if any, to be withheld based on current federal and state withholding tables. You may also elect to withhold an additional dollar amount to be withheld.
A new Withholding Preference Certificate may be completed at any time to change future withholdings.
1099-R Frequently Asked Questions
What is a 1099-R?
IRS Form 1099-R is an annual statement of disbursements and applicable taxes paid by a retirement plan. Each year, OPERS sends a 1099-R to all retired members who received benefits in the previous calendar year, or any active members who took a distribution of their employee contributions after they left employment with a participating employer.
When are 1099-R forms mailed?
Forms will be mailed no later than January 31st of the current year. Please allow for normal delivery time. If you have not received your Form 1099-R by February 15th you may contact OPERS at (800) 733-9008.
Why is the taxable amount (Box 2a) less than the gross distribution (Box 1)?
You may have had after-tax dollars in your account at retirement. This occurs if you made after-tax retirement contributions, used after-tax money to make a purchase, etc. This reduces the taxable portion of the total amount, thus accounting for the difference in the two amounts.
Where do I find the amount withheld for federal and state taxes?
The amount of federal income tax withheld is located in Box 4 and the state tax withheld is found in Box 10.
What does the number in Box 7 represent?
See the back side of copy “C” of your 1099-R form for an explanation of distribution codes.
Box 11 is left blank. What is that number?
The number for Box 11 is the same as the Payer’s Federal Identification Number on the left side of the form.
Why did I receive multiple 1099s from OPERS?
If you received more than one 1099-R form from OPERS, it means you also received a distribution as a beneficiary of someone else’s account. You should be able to determine from the amounts which 1099-R is for which distribution, but if you still have questions, contact OPERS.
How do I determine how much was withheld from my retirement for medical insurance premiums?
If you had medical insurance premiums withheld from your OPERS benefits, that amount will be clearly marked in the ‘Account Number’ box on your 1099.
How do I get a duplicate copy of my 1099-R?
You may request a duplicate Form 1099-R in writing, by e-mail, or by calling OPERS. Your current mailing address must match our records before a 1099 will be mailed to you. All requests must include your name, OPERS member ID, tax year requested, mailing address, the benefit type, daytime telephone number, and signature. Please allow 10-15 business days to receive your 1099-R.
Can you email or fax my 1099-R?
No. To protect your information, and according to OPERS policy, your 1099-R will only be mailed to the address on record. If you have moved, you will need to complete a Change of Address form.