What types of distributions are eligible for the income tax deduction?
Distributions that are paid to you in periodic payments in more than one calendar year are eligible for the income tax deduction. To qualify for the income tax deduction you must select “Periodic Payments” on the Benefit Distribution form when applying for payment; indicate that you want at least two periodic payments, and pick a schedule that will include at least two different calendar years. At a minimum, you must select two monthly periodic payments, the first to occur in December of one year and the second in January of the next year, to qualify for the income tax deduction. Most participants, however, will designate a longer periodic distribution period and will qualify for the income tax deduction for each year the participant is at least age 59½.
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