Taxes File Your Own Taxes What Is Line 5a on IRS Form 1040? By William Perez Updated on February 16, 2023 Reviewed by Ebony J. Howard Reviewed by Ebony J. Howard Ebony Howard is a certified public accountant and a QuickBooks ProAdvisor tax expert. She has been in the accounting, audit, and tax profession for more than 13 years, working with individuals and a variety of companies in the health care, banking, and accounting industries. learn about our financial review board In This Article View All In This Article What Is Line 5a on Form 1040? Who Uses Line 5a on Form 1040? Taxation of Pension and Annuity Payments Frequently Asked Questions (FAQs) Photo: AJ_Watt / Getty Images Definition Line 5a on IRS Form 1040 is where you enter the total amount of pension and annuity payments you received during the tax year. You should leave line 5a blank if your pension and annuity payments were fully taxable. Key Takeaways Line 5a on Form 1040 or 1040-SR is for the total amount of pension and annuity payments you received during the tax year.You calculate that figure by adding up the amounts in box 1 of any Forms 1099-R you received from financial service providers.Leave line 5a blank if your pension and annuity payments were fully taxable. Enter the total amount of those payments on line 5b instead.You must calculate the taxable portion using either the General Rule or the Simplified Method if the payments weren't fully taxable, and the taxable portion isn't stated on a Form 1099-R. How Line 5a Works on Form 1040 Pension and annuity payments entered on line 5a may include distributions from 401(k), 403(b), and 457(b) plans. A 401(k) plan is a retirement savings plan available from many for-profit companies. A 403(b) plan is a retirement savings plan for religious leaders and many public school employees, as well as those who work for nonprofit organizations. A 457(b) plan is for local and state government employees, as well as highly compensated employees at tax-exempt organizations such as charities, non-profit hospitals, and unions. Annuity Payments There are four main categories of annuities from which you might receive payments: Fixed-period: This type of annuity pays regular, set amounts of money over a predetermined length of time.Single-life: This annuity also makes regular, set payments, but they end with the recipient's death.Joint and survivor: The survivor continues to receive payments after the first recipient of this type of annuity dies. Payments may be of the same or a different amount.Variable: The payments from this type of annuity vary, depending on factors such as the profit made on the annuity funds or a cost-of-living index. Note A company may purchase an annuity for its employees in lieu of other retirement savings plans. You should leave line 5a blank if your pension and annuity payments were fully taxable. Enter the total amount of those payments on line 5b instead. Federal Distribution Payments and Foreign Pension Payments Distributions from the Federal Employees' Retirement System or its predecessor, the Civil Service Retirement System, would also be entered on line 5a, as would money from a foreign pension plan. Distributions from a Thrift Savings Plan (TSP) would be entered on line 5a as well. A TSP is the equivalent of a 401(k) for federal workers. For the 2022 tax year, Line 4a is for total IRA distributions, and line 4b is for the taxable amount of those distributions for the year. Who Uses Line 5a on Form 1040? Anyone who has received pension or annuity payments that are not fully taxable in the tax year would use line 5a on Form 1040. You should receive a 1099-R from all of the firms managing those retirement accounts. Using Form 1040-SR Total pension and annuity payments are also reported on line 5a of Form 1040-SR, the income tax return designed for taxpayers who are age 65 and older. Taxable pension and annuity payments are reported on line 5b of this form as well. Form 1040-SR uses larger print than the standard 1040. It has a standard deduction chart that's easier to read and use. Using Form 1040-NR Filers of Form 1040-NR for U.S. nonresidents use lines 5a and 5b to report total and taxable pension and annuity income as well. The following types of retirement income should be reported on line 1 of Form 1040 rather than on line 5a: Corrective distributions of excess salary deferrals or other excess contributions to retirement plans and payments from disability pensions received before you've reached the minimum age for retirement benefits as set by your employer. Taxation of Pension and Annuity Payments The IRS considers your payments to be fully taxable if you didn't contribute anything to your pension or annuity, or if you received all your cost back tax-free in a prior year. Military retirement payments shown on a Form 1099-R are also considered to be fully taxable. Note See IRS Publication 525, Taxable and Nontaxable Income for information on military disability pensions. See IRS Publication 575, Pension and Annuity Income for information on U.S. Railroad Retirement Board payments. Enter the total amount on Line 5b if your Form 1099-R shows the taxable portion of your pension and/or annuity payments. You must calculate it using either the General Rule or the Simplified Method if the taxable amount isn't given. The General Rule is explained in IRS Publication 939, General Rule for Pensions and Annuities. Calculate Using the Simplified Method You must use the IRS-backed Simplified Method in most cases. It can be found in the Form 1040 and Form 1040-SR instructions. You must use it if your annuity starting date was after July 1, 1986, and you used the Simplified Method in the prior tax year. You also must use it if your annuity starting date was after November 18, 1996; in that case, both of the following conditions must apply as well: The payments are from a qualified employee plan, a qualified employee annuity, or a tax-sheltered annuity.You were under age 75, or the number of years of guaranteed payments was fewer than five on your annuity starting date. Your annuity's starting date is the first day of the first period for which you received a payment or the date the plan's obligations became fixed, whichever is later. Note You can have the IRS calculate the taxable portion of your pension and annuity payments for you for a fee of $1,000. Your annuity provides guaranteed payments if a minimum number of payments or a minimum amount is payable, even if you and any survivor don't live to receive the minimum. You're entitled to less than five years of guaranteed payments if, barring death, the minimum amount is less than the total amount of the payments you're to receive during the first five years after payments begin. The Simplified Method Worksheet is on page 29 of the 2022 instructions for Form 1040 and 1040-SR. Calculate the taxable amount of each one separately if you received payments from more than one partially taxable pension or annuity. Report the total on line 5b. Frequently Asked Questions (FAQs) What are pensions and annuities? Pensions and annuities are investment vehicles that you can use to generate a fixed income stream. Pensions are retirement savings funds offered by employers. Annuities are actually a type of insurance product. They aren't necessarily tied to retirement. Both are common sources of steady income later in life. How much is the income tax on pensions and annuities? You'll pay income tax on any portion of the payments that wasn't originally taxed when you made your contributions. Any employer contributions or money that's a result of account growth will be taxed at your income tax rate at the time of withdrawal. The amount will typically be automatically withheld from your payments. How do I report income from foreign pensions on Form 1040? Foreign pension income isn't reported with your regular U.S.-based annuity and pension income. IRS rules for reporting income from foreign retirement accounts are fairly complicated. You may have to file several forms with your tax return, depending on the type of account. Consult with a tax advisor if you're receiving foreign pension income. Updated by Jess Feldman Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. IRS. "IRS Tax Tear 2022 1040 and 1040-SR Instructions," Page 27. IRS. "IRS Tax Year 2022 1040 and 1040-SR Instructions," Pages 23, 27. IRS. "2022 Form 1040 U.S. Individual Income Tax Return." IRS. "Instructions for Form 1040-NR, U.S. Nonresident Alien Income Tax Return," Page 20. IRS. "IRS Tax Tear 2022 1040 and 1040-SR Instructions," Page 28. IRS. "Topic No. 410 Pensions and Annuities."