Teacher retired in 2011-Bought yrs of Service-Deductible?

[Peg]

I am doing a tax return for a teacher who retired in 2011. She bought some yrs of service to increase her monthly pension. Is the payment deductible on her tax return? If so, where? I tried researching in IRS publications and JK Lasser Guide but did not find. Can anyone provide guidance? Thanks.

[okie1tax]

Deductible

the 1099-R should show how much she contributed/bought. You would use the general(?) method to determine how much each year is non-taxable.

[Lion]

The Teachers' Retirement Board in your state probably has some good information online. And your client's school district may have a knowledgeable employee who deals with retiree benefits.

[FEDUKE404]

No "deduction"

The "purchase" is not deductible, although the retiree benefits received will show some upward adjustment.

FWIW: Years ago I "bought" several years of military service, which was paid based upon principal (my entrance salary into non-military job) + interest accrued. The only difference I ever saw was that I was eventually shown to have three more years of creditable "service" when my retirement benefits were first paid, many years thereafter.

FE