Updated October 30, 2026. Quick answer: Publication 939 is the IRS guide to the General Rule for taxing pension and annuity payments, and the IRS title carries the 12/2025 edition. It says the General Rule splits each payment into a tax-free return of net cost and a taxable balance, and it lists who must use it instead of the Simplified Method.
Quick reference
| Item | As the IRS publication states it |
|---|---|
| Age at the annuity starting date that can require the General Rule, with payments guaranteed for at least 5 years (Who must use the General Rule) | age 75 or over |
| Annuity starting date that triggers the General Rule for some qualified plans (Who must use the General Rule) | after July 1, 1986 and before November 19, 1996 |
| Death benefit exclusion for a beneficiary of an employee who died before August 21, 1996 (Adjustments) | up to $5,000 |
| Date the unisex annuity Tables V through VIII took effect (Unisex Annuity Tables) | July 1, 1986 |
| Revision date shown on the IRS page | December 2025 |
What the publication covers
The introduction says “This publication gives you the information you need to determine the tax treatment of your pension and annuity income under the General Rule.” It adds “Generally, each of your monthly annuity payments is made up of two parts: the tax-free part that is a return of your net cost, and the taxable balance.”
The IRS page shows “Revised: December 2025”. On the method itself, it says “The General Rule is one of the two methods used to figure the tax-free part of each annuity payment based on the ratio of your investment in the contract to the total expected return.”
Who must use the General Rule
The introduction says to use the publication if you receive payments from “A nonqualified plan (such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan)”.
For a qualified plan, it lists two cases. One is “Your annuity starting date is before November 19, 1996 (and after July 1, 1986), and you don’t qualify to use, or didn’t choose to use, the Simplified Method”. The other is “Your annuity starting date is after November 18, 1996, and as of that date you are age 75 or over and the annuity payments are guaranteed for at least 5 years.”
Everyone else with a qualified plan is pointed the other way: “If you receive pension or annuity payments from a qualified plan and you aren’t required to use the General Rule, you must use the Simplified Method to determine the tax-free part of each annuity payment.”
Parts of the publication in plain words
- General Information: definitions of a pension and an annuity, and the types of pensions and annuities.
- The General Rule, and Taxation of Periodic Payments.
- Investment in the Contract, with the adjustments that turn total cost into net cost.
- Expected Return for fixed period, single life, shorter of life or a set period, and joint and survivor annuities.
- Computation Under the General Rule, in steps, with part-year payments, increases in payments and variable annuities.
- Exclusion Limits, How To Use Actuarial Tables, Unisex Annuity Tables and Special Elections.
- Worksheets for Determining Taxable Annuity, the Actuarial Tables, and Requesting a Ruling on Taxation of Annuity.
Worksheets and tables inside it
The publication says “Worksheets I and II follow for determining your taxable annuity under Regulations Section 1.72-6(d)(6) Election.” On this site, the Publication 939 worksheets I and II page covers those worksheets.
On the tables, the publication says “Effective July 1, 1986, the IRS adopted new annuity Tables V through VIII, in which your sex isn’t considered when determining the applicable factor.” It also says “In general, Tables V through VIII must be used if you made contributions to the retirement plan after June 30, 1986.”
The figures that matter
On investment in the contract, the publication says “In figuring how much of your pension or annuity is taxable under the General Rule, you must figure your investment in the contract.”
On the annuity starting date, it says “The annuity starting date is the later of the first day of the first period for which you receive payment under the contract or the date on which the obligation under the contract becomes fixed.”
On survivors, the Adjustments section says “If you are the beneficiary of a deceased employee (or former employee) who died before August 21, 1996, you may qualify for a death benefit exclusion of up to $5,000.”
On getting help, it says “If you are unable to determine the income tax treatment of your pension or annuity, you may ask the IRS to figure the taxable part of your annuity payments.”
Where to go next
Publication 939 points federal retirees to Publication 721 and everyone using the Simplified Method to Publication 575. On this site, the Simplified Method worksheet covers the other method, Form 1040 lines 5a and 5b shows where the taxable part goes, and pension and annuity decisions covers the choices that come before payments start.
Where this comes from
The IRS page About Publication 939 opens with “Publication 939 gives you the information you need to determine the tax treatment of your pension and annuity income under the General Rule.” It links the PDF and eBook editions and the earlier revisions of the publication.
This page describes the web edition of Publication 939 (12/2025), General Rule for Pensions and Annuities, as served on irs.gov on October 30, 2026. The IRS can revise a publication after we read it, and the IRS page controls. General information, not tax or legal advice.
Common mistakes
- Using the General Rule for every pension. The publication says “you must use the Simplified Method to determine the tax-free part of each annuity payment.”
- Using this publication for federal retirement benefits. The publication says “see Pub. 721, Tax Guide to U.S. Civil Service Retirement Benefits.”
- Looking here for IRA payouts. The publication says “Information on the tax treatment of amounts you receive from an IRA is included in Pub. 590-B, Distributions from Individual Retirement Arrangements (IRAs).”
- Picking an older actuarial table by habit. The publication says “In general, Tables V through VIII must be used if you made contributions to the retirement plan after June 30, 1986.”
Related: IRS publications by number, Publication 939 annuity worksheets I and II, Simplified Method worksheet, Form 1040 lines 5a and 5b, pensions and annuities, Pension and annuity decisions, Is a pension annuity eligible for rollover, and Form W-4P.
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Answer againSources
- IRS, Publication 939 (12/2025), General Rule for Pensions and Annuities (irs.gov): https://www.irs.gov/publications/p939
- IRS, About Publication 939, General Rule for Pensions and Annuities (irs.gov): https://www.irs.gov/forms-pubs/about-publication-939
Read from the IRS pages linked above on October 30, 2026. General information, not tax or legal advice. The IRS publication and the instructions for your own form control, and your own facts decide the outcome.