retired man sitting at a desk typing on computer keyboard

Taxes and Your Benefit

PSRS benefits are subject to federal income taxes, and Missouri income taxes if you live in Missouri. We cannot advise you on whether you should have taxes withheld. However, if your tax withholding is not sufficient to meet your tax liability, you may be subject to penalties and interest in addition to your tax obligation.

PSRS/PEERS employees do not offer tax advice. The following information is provided as a reference only. It is recommended that you speak with your tax professional or the Missouri Department of Revenue for tax advice. 

How Much of your Monthly Benefit is Taxable?

  • Most contributions you have made to PSRS are taxable when returned to you in the form of benefits.
  • However, if you made contributions to PSRS prior to July 1989, or made payments to reinstate or purchase service using previously taxed dollars, those funds are exempt from additional tax when returned to you in the form of benefits.
  • If you have no previously taxed funds in your account, your entire benefit is taxable.
  • Federal Taxes

    Federal Income Tax

    The IRS does not allow the withholding of federal taxes in a specified dollar amount. You may, however, choose to withhold an amount based on marital status, the number of allowances you choose and federal tax tables, with an additional dollar amount withheld.

    Example:
    Tax filing status: married
    Number of exemptions: 0

    This results in a withholding amount of $450.

    If the desired withholding amount is $500, the member in this example should select a tax status of married, with zero exemptions, and an additional monthly withholding amount of $50.

    Members who establish a new withholding amount or change their withholding amount must follow this rule. Those members with previously-designated specified federal tax withholding amounts will continue to have that specified amount withheld until a change is requested. Please contact your tax advisor or visit www.irs.gov for more information.

    Unless you specifically ask us not to do so, we are required to withhold federal income tax from each benefit payment in excess of a specific amount set by the Internal Revenue Service (IRS) each year. If the taxable portion of your benefit is less than that amount, no tax is withheld unless you direct us to do so.

    You can use our Federal Tax Withholding and Cost of Living (COLA) Calculator to help plan for your Federal taxes.

    Federal Tax Withholding Calculator »
  • State Taxes

    State Income Tax

    If you live in Missouri, your PSRS benefits are subject to Missouri income tax, with the exception of certain amounts based on your Missouri filing status and adjusted gross income. Missouri income tax is not deducted from your benefit payment unless you direct us to do so. If you move out of state, your Missouri tax withholding automatically stops. If you live in a state other than Missouri, contact the taxing authority of that state for information on state income tax and your PSRS benefit.

    Missouri Public Pension Exemption »

  • Withholding

    Changing Your Tax Withholding

    You can change your federal or Missouri tax withholding any time by logging into Web Member Services or by using the PSRS Monthly Tax Withholding Authorization form.

    If you need tax advice, contact a tax professional, the IRS at (800) 829-1040 or the Missouri Department of Revenue at (573) 751-3505, or email income@dor.mo.gov.

    IRS Form 1099-R

    As a benefit recipient, you receive an IRS Form 1099-R from PSRS each January showing the total benefits paid to you during the previous calendar year, the taxable portion, and the amounts withheld. You will need this form when you prepare your income taxes. To view a history of your past 1099-R forms, log in.

    Learn more about Form 1099-R