Annuity Taxation
Annuities are taxed on an accrual basis: as income is earned even if not received (e.g., during the accumulation phase of a deferred annuity)
Taxation depends on the type of annuity.
Requirements
- owner = annuitant
- payments start by the end of the calendar year of purchase
- guarantee ends by the annuitant’s 91st birthday
- level annuity payments (except for the reduction in payments to a survivor with joint & last survivor)
Accrued
- interest earned on the annuity principal is reported annually
page revision: 12, last edited: 01 Jan 2008 21:56