Do you pay taxes on Pension?

  1. blessed365 profile image78
    blessed365posted 5 years ago

    Do you pay taxes on Pension?

    Should extra money be taken out of a pension check every month to go toward taxes?

  2. LandmarkWealth profile image79
    LandmarkWealthposted 5 years ago

    Depends on the Tax.  State income tax is sometimes partially non taxable.  NY state exempts the first 10k in retirement benefits. The Federal Gov't will tax the benefits as ordinary income in most cases.  In cases related to an on the job injury like a police officer or fireman it is usually tax free. Assuming it is reportable and taxable income, you still may not need withholding if you have enough deductions to offset the tax liablity.   It's case by case.