Spouse’s death and taxable benefits


Q. My husband was killed in a motorcycle accident after working 16 years for the Department of Defense. I have been receiving a survivor’s annuity since his death. Is the annuity part of his retirement that he had accrued, or is this part of a death benefit? I received a death benefit at the time of his death. Is the annuity taxable income? Is the annuity his retirement that he had earned before his death?

A. When he died, you were entitled to three things: a one-time payment, one-half of his final annual pay and an annuity. While most of the annuity is taxable income, a potion of it will represent a return of your late husband’s retirement contributions, which have already been taxed.


About Author

Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.

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