Annuity Proceeds

Annuity proceeds include "amounts received as an annuity" as defined in the regulations issued under the tax code. For amounts received under an annuity contract to qualify as "amounts received as an annuity," all of these requirements must be met:

  • The amounts must be received on or after the annuitization starting date. The annuitization starting date is the first day of the first period in which annuity payouts are received under the contract. Thus, if annuity payouts are made each December 31, and if the first annuity payout will be made on December 31 of Year 1, the annuitization starting date is January 1 of Year 1.

  • The amounts must be part of a series of distributions made at regular intervals over a period of more than one year.

  • The total amount to be paid must be determined, as of the annuitization starting date, from the terms of the contract, mortality tables, compound interest tables, or some combination of these factors.

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