When my Dad turns 65, and he cashes in his pensions, will that money count as regular income?
will that money, when cashed in, dramatically reduce my moms obamacare subsidies, and will she have to pay back a ton of money at the end of the year? Thank you!
- Beverly SLv 73 weeks ago
I believe all income is counted.
- Max HooplaLv 73 weeks ago
To the extent it was not funded by his after tax earnings it is taxable as ordinary income.
- Anonymous3 weeks ago
If the extra money causes income to go up, mom can file separately.
- 3 weeks ago
Yes, pension income is income. But your father can work until he is 70 and defer drawing his pensions until then. That will increase the monthly amount he eventually receives. That might be a better way for him to pay for your mother's health insurance.
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- Barkley HoundLv 73 weeks ago
Pensions are not normally cashed in. They are paid monthly for the rest of your life. If there is an offer to cash it in and get one large payment it will be taxed as regular income that year.
- Jeff DLv 73 weeks ago
In general, pensions aren't "cashed in". Instead, they pay the pensioner a fixed income every year. Some or all of those payments are taxable, depending on how the pension was set up.
- 3 weeks ago
At 65 it should not count as taxable income.