Retirement allowances (including disability retirement) are generally considered taxable income under both federal and State of California income tax laws. At the time of retirement you will need to instruct OCERS on your tax withholding election. If you have any questions regarding the taxability of your retirement allowance, please consult a tax professional.
OCERS does not withhold state income taxes for any state other than California.
Special Rule for After-Tax Member Contributions
Member contributions prior to 1986 were made on an after-tax basis. Contributions are not taxed when disbursed, but the interest is taxable. Purchases of Service or redeposit of contributions (lump sum payment via personal check or installment payments) made with after-tax monies are also not taxed when disbursed.
Tax Withholding Options
Click here to visit the IRS Seniors & Retirees Web page for a wealth of tax tips and publications.
The IRS also has a Tax Scams/Consumer Alerts Web page with up-to-date safety tips to avoid becoming a victim of tax scams and identity theft. To learn more, click here.
The 1099-R form provides each payee with detailed information of his or her income for the previous year. OCERS mails out 1099-R statements to all payees by January 31st of each year. You may also view or print copies of your 1099-R statement online, by logging into myOCERS. To request copies of your 1099-R for previous years, please call OCERS at (714) 558-6200. Get more information on how to read your 1099-R statement.
415 Limits and The Economic Growth and Tax Reconciliation Act of 2001
The Annual Benefit payable to a Member under the System at any time shall not exceed $230,000 for 2020 ($225,000 for 2019) or such other dollar limit specified under section 415(b)(1)(A) of the Code, automatically adjusted under § 415(d) of the Code, effective January 1 of each year, as provided by the Internal Revenue Service. The limit may be decreased for members retiring prior to age 62 or increased for members retiring after age 65. Members should consult their tax professionals with questions regarding limits.
Benefit Compensation Limit for PEPRA Plan Formulas U, V, and W
The 2020 annual benefit compensation limit for an eligible PEPRA member in plan U, V or W is $151,549. The 2019 limit was $149,016.