Case Study 1: Fully Taxable Pensions and AnnuitiesSue worked for a software development company for 20 years. She retired and began receiving pension income the same year. She never contributed to the pension plan while she was working; her employer made all of the contributions. Her pension is fully taxable. Click here for an explanation. Distributions are fully taxable if taxpayers did not pay any part of the cost of their pensions or annuities. |