Your KPERS contributions come out of your pay pretax. So when you file your Kansas state income tax, you need to add them back.
See your W-2 for the amount to report on your state tax form. You won’t need it for your federal tax return.
Because you’re paying state taxes now, you won’t pay Kansas state taxes on your benefit when you retire.
If You Withdraw
Your KPERS withdrawal payment might be taxable. Depends on how you get the money.
- If you get a direct payment, you’ll owe federal income tax. Uncle Sam says KPERS has to withhold 20%. And you might pay a federal penalty.
- If you do a rollover to another eligible retirement plan, you won’t pay taxes right away. This gives your money more time to grow! You can also avoid federal penalties for early distribution.
Be sure to read all the info in the Withdrawal Application before you decide.
In general, your benefit is taxable for federal income tax and not for Kansas state tax.
|Benefit Type||Pay Federal Tax||Pay Kansas Tax||Other States|
|$4,000 death benefit||yes||no||check|
The IRS has rules about how we handle tax withholding automatically. But you can control how much tax you have withheld by changing it in your online account or sending us a W-4P form. You can update it anytime.
|Monthly Benefit||Withholding||You can change it|
|Under $2,010||Not automatic
$0 unless you tell us
married & 3 exemptions
Every January, KPERS will send you a 1099-R form for your taxes. If you are a new retiree and took a partial lump sum, you’ll get 2. One for your lump sum and 1 for your regular monthly benefits.
If You Take a Partial Lump-Sum Option
If you take part of your retirement benefit in an up-front lump sum it could be taxable. Depends on how you get the money.
- If you do a rollover to another eligible retirement plan, you won’t pay taxes until you take the money out.
- If you get a direct payment, you’ll owe federal income tax. Uncle Sam says KPERS has to withhold 20%. And you might pay a federal penalty if you’re under age 59 ½.
Be sure to read all the info in the Retirement Application before you decide.
Either way, you’ll get 2 1099-R forms from KPERS the next January for your taxes. One for your lump sum and 1 for your regular monthly benefits.