Employee contributions made to the District of Columbia Teachers’ Retirement Plan (the Plan) by teachers prior to September 22, 2000, were on a post-tax basis. Because these contributions were made after tax, these teachers qualify to receive tax exclusion on the annuity payment they receive from the Plan as calculated under the IRS Simplified Method. This tax exclusion recognizes that these teachers previously paid taxes on their contributions and avoids their being taxed twice. This does not mean that the entire annuity payment is non-taxable. The tax exclusion identifies the portion of the total value of the annuity that reflects taxed contributions and excludes that percentage from future taxation.
Please note: Disability annuity payments are treated as a normal pension distribution subject to taxation.
To determine the amount of the tax exclusion, please refer to IRS Publication 575 Pension and Annuity Income or consult with a tax advisor.