Have a Tax Question? Ask a Tax Expert
Good Morning. Unfortunately, the monthly pension benefit you'll receive is considered taxable income. Those monthly payments can't be excluded from taxes by rolling the payment into an IRA. If you have the option of a lump-sum payment you could roll the benefit into an IRA - you have one rollover in a 12-month period and the rollover deposit needs to be within 60 days of the pension payment.
Let me know if you have any questions. Thank you.
You can arrange through the PBGC to have the taxes withheld from the monthly check.
I would use your prior year's tax rate. It is best to pay it ahead of time to avoid any late payment penalties.
You are very welcome.