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Course Details

Tax Treatment of Retirement Plans, Pensions and Annuities (Course Id 426)

Updated / QAS / Registry / EA / Return Preparer
  Add to Cart 
Author : Paul Winn, CLU, ChFC
Course Length : Pages: 53 ||| Review Questions: 15 ||| Final Exam Questions: 25
CPE Credits : 5.0
IRS Credits : 5
Price : $44.95
Passing Score : 70%
Course Type: NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents - Registered Tax Return Preparers
Technical Designation: Technical
Primary Subject-Field Of Study:

Taxes - Taxes for Course Id 426

Description :

Employer-sponsored retirement plans, generally referred to in the aggregate as qualified employee plans, constitute one of the important “legs” of the retirement stool that individuals look to for their income in retirement. The other two legs of that stool are personal savings—through investment in securities, deferred annuities, savings accounts, etc.—and Social Security retirement benefits. This course will examine qualified employee plans, their limits and their tax treatment along with a discussion of annuities and their taxation.

Annuities offer their owners the opportunity to systematically liquidate a principal sum or save money for a long-term objective.  For many annuity buyers, that objective is to provide income during retirement.  As we will see in our examination of annuities, they provide owners with a number of advantages; principal among them is their tax treatment.  By purchasing and investing in an annuity, a contract owner can avoid current income taxation of earnings.  By avoiding current income taxation, earnings that might have been used to pay current income taxes can be invested to produce additional income. 

Annuities’ tax advantages aren’t limited to tax deferral, however; annuities offer additional tax advantages.  For example, an investor purchasing a variable annuity can change his or her investment allocation in the contract’s variable subaccounts whenever desired.  Typically, such changes are made in order to implement new objectives or to modify the level of risk assumed.  From a tax point of view, the important issue is that the contract owner can make these changes without being required to recognize income as would be required if, for example, the investor liquidated his or her stock portfolio in order to purchase bonds.  In addition to these tax benefits, a contract owner that elects to annuitize his annuity contract, i.e. to take a periodic income from it, will find that part of each periodic income payment may be tax free as a return of his or her investment in the annuity contract.  

Usage Rank : 14706
Release : 2024
Version : 1.0
Prerequisites : None.
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None.
Delivery Method : QAS Self Study
Intended Participants : Anyone needing Continuing Professional Education (CPE).
Revision Date : 26-Jan-2024
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents - Registered Tax Return Preparers - 426

Keywords : Taxes, Tax, Treatment, Retirement, Plans, Pensions, Annuities, cpe, cpa, online course
Learning Objectives :

Course Learning Objectives

Upon completion of this course, you should be able to:
  • Distinguish between the types of qualified employee plans;
  • Recognize the limits imposed on qualified employee plan contributions and benefits;
  • List the requirements applicable to qualified employee plan loans;
  • Apply the federal tax laws to qualified employee plan contributions and distributions;
  • Recognize the changes made to retirement plans and pensions by the SECURE Act and the CARES Act;
  • Recognize the tax treatment of nonqualified annuity distributions; and
  • Identify the tax treatment of annuity contributions and distributions.

Chapter 1
Qualified Retirement Plans

Upon completion of this chapter, you should be able to:
  • Describe the types and characteristics of qualified employee plans;
  • Explain the limits imposed on qualified employee plan contributions and benefits;
  • Describe the requirements applicable to qualified employee plan loans; and
  • Explain the rules governing rollovers to and from qualified employee plans.

Chapter 2
Tax Treatment of Qualified Plans

Upon completion of this chapter, you should be able to:
  • Describe the tax treatment of loans from qualified plans;
  • Apply the federal tax laws to qualified employee plan contributions and distributions;
  • Recognize changes resulting from the Secure Act 2.0 on qualified plans including:
      a. Penalty Reductions and Exceptions,
      b. Required Minimum Distributions, and
      c. Plan Loans

Chapter 3

Upon completion of this chapter, you should be able to:
  • List the principal types of annuities;
  • Describe the principal characteristics of deferred and immediate annuities; and
  • Explain the tax treatment of annuity contributions, distributions taken as an annuity, surrenders, loans and withdrawals.
Course Contents :

Course Learning Objectives


Chapter 1 - Qualified Retirement Plans

Chapter Learning Objectives


Defined Benefit Plans

Defined Benefit/401(k) Plans

Defined Contribution Plans

Individual Participant Accounts Characterize Defined Contribution Plans

Target Benefit Plans

Target Benefit Plan Investment Risk

Target Benefit Plans Favor Older Plan Participants

Profit Sharing Plans

Traditional Profit Sharing Plans

Age-Based Profit Sharing Plans

401(k) Plans

403(b) Tax Sheltered Annuity Plans

Multiple Employer Plans for Tax Sheltered Annuity 403(B) Plans

Simplified Employee Pension (SEP)

SEPs for Domestic Employees

Savings Incentive Match Plan for Employees (SIMPLE)

Roth Contributions to SEPs & SIMPLEs

Starter 401(k) & 403(b) Plans Authorized

Small Financial Incentives to Encourage Plan Participation

Tax Credits for Small Employers Military Spouse Employment & Accelerated Plan Eligibility


Chapter Review

Chapter 2 - Tax Treatment of Qualified Plans

Chapter Learning Objectives


Contributions to Qualified Employee Plans

Employer Plan Contributions

Defined Benefit Plan Limit on Deductible Employer Contributions

Defined Contribution Plan Limit on Deductible Employer Contributions

Retroactive Individual 401(k) Elective Deferrals for Sole Proprietors

Additional SIMPLE Nonelective Contributions

Employee Plan Contributions

403(b) Plan Contribution Limit Increased for Long-Service Employees

Catch-up Contributions for Participants Age 50 or Older

Designated Roth Accounts

Student Loan Payments Treated as Elective Deferrals for Employer Match

Qualified Student Loan Payment

Certain SIMPLE Contribution Limits Increased

Life Insurance in a Qualified Employee Plan

Requirements for Plan Life Insurance

Life Insurance Premiums

Qualifying Longevity Annuity Contract Changes

Distributions from a Qualified Employee Plan

Cost Basis in a Qualified Employee Plan

How Benefits are Distributed

Lump Sum Plan Distributions

Plan Distributions as Periodic Payments

Fully Taxable Periodic Payments

Partly Taxable Periodic Payments

Figuring the Tax-Free Part of Periodic Payments Simplified Method

Figuring the Tax-Free Part of Periodic Payments General Rule

Early Distributions

Qualified Disaster Distribution

Repaying Qualified Birth or Adoption Distributions

Exemption from Tax Penalties for Premature Distributions by Terminally Ill

Premature Distribution Tax Penalty at Age 50 for Private Sector Firefighters Eliminated

Simplifying Hardship Distributions

Modifying the Premature Distribution Tax Penalty for Public Safety Officers

Modification of Premature Distribution Tax Penalty to Other Eligible Government Employees

Emergency Expense Withdrawals

Emergency Expense Withdrawal Limitations

Amount Distributed may be Repaid

Limitation on Subsequent Emergency Distributions

Domestic Abuse Distributions

Involuntary Plan Distribution Limit Increased

403(b) Hardship Distribution Rules Eased

Required Minimum Distributions

Lifetime Distribution Requirements for Designated Roth Accounts Eliminated

Plan Distributions of Non-Cash Assets


Distributions Ineligible for Rollover

Direct and Indirect Rollovers

Qualified Disaster Distribution Repayments

Plan Loans

Specific Repayment Term Required

Substantially-Level Amortization Required

Maximum Loan Amount Limited

Loan Agreement Required

The SECURE Act 2.0 Plan Loan Changes

Death Benefits

Roth Account Distributions

Qualified Roth Distributions Tax-Free

Nonqualified Roth Account Distributions


Chapter Review

Chapter 3 - Annuities

Chapter Learning Objectives


Deferred Annuity

Immediate Annuity

Qualified Annuity

Nonqualified Annuity

Death Benefits

Annuitization Methods

Temporary Annuity

Life Annuity

Nonqualified Annuity Income Tax Treatment


Cash Values

Ownership by Non-natural Persons Generally

Ownership by Natural Persons and Certain Trusts

Surrenders and Withdrawals

Charges Against Cash Value for LTC Premiums not Currently Taxable

Annuity Loans

Premature Distributions

Annuity Payments During Lifetime

Fixed Annuities

Variable Annuities

Annuitants Death After Annuity Starting Date

Contract Owners Death Before Annuity Starting Date

Estate Taxation of Annuities


Chapter Review


Tax CPE Courses: https://www.cpethink.com/tax-cpa-courses
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