Form 4972 – Tax on Lump‑Sum Distributions

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Use the IRS Form 4972: Tax on Lump‑Sum Distributions (2024) Tax Form Calculator IRS Form 4972: Tax on Lump‑Sum Distributions (2024) as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 4972 state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.

IRS Form 4972 is used to calculate the special tax on a qualified lump-sum distribution from a pension, retirement, or profit-sharing plan. The form allows eligible taxpayers—typically born before January 2, 1936—to elect more favorable tax treatment using the 20% capital gain method or the 10-year tax option.

Eligibility for Form 4972

You may be eligible to use this form if:

You received a lump-sum distribution from a qualified plan reported on Form 1099-R
You were born before January 2, 1936 or are a beneficiary of someone who was
You meet the “five-year participation” rule for the retirement plan
You did not previously receive a lump-sum distribution from the same plan for which you used Form 4972

Tax on Lump-Sum Distributions
Name of recipient of distribution				Identifying number
Part I. Complete this part to see if you can use Form 4972
1	Was this a distribution of a plan participant’s entire balance (excluding deductible voluntary employee contributions and certain forfeited amounts) from all of an employer’s qualified plans of one kind (for example, pension, profit-sharing, or stock bonus)? If “No,” don't use this form					Yes	No
					1
2	Did you roll over any part of the distribution? If “Yes,” don't use this form				2
3	Was this distribution paid to you as a beneficiary of a plan participant who was born before January 2, 1936?				3
4	Were you (a) a plan participant who received this distribution, (b) born before January 2, 1936, and (c) a participant in the plan for at least 5 years before the year of the distribution? If you answered “No” to both questions 3 and 4, don't use this form.				4
5a	Did you use Form 4972 after 1986 for a previous distribution from your own plan? If “Yes,” don't use this form for a 2016 distribution from your own plan				5a
b	If you are receiving this distribution as a beneficiary of a plan participant who died, did you use Form 4972 for a previous distribution received as a beneficiary of that participant after 1986? If “Yes,” don't use this form for this distribution				5b
Part II. Complete this part to choose the 20% capital gain election (see instructions)
6	Capital gain part from Form 1099-R, box 3			6
7	Multiply line 6 by 0% ()			7
	If you also choose to use Part III, go to line 8. Otherwise, include the amount from line 7 in the total on Form 1040, line 44; Form 1040NR, line 42; or Form 1041, Schedule G, line 1b.
Part III. Complete this part to choose the 10-year tax option (see instructions)
8	If you completed Part II, enter the amount from Form 1099-R, box 2a minus box 3. If you didn't complete Part II, enter the amount from box 2a. Multiple recipients (and recipients who elect to include net unrealized appreciation (NUA) in taxable income) see instructions			8
9	Death benefit exclusion for a beneficiary of a plan participant who died before August 21, 1996			9
10	Total taxable amount. Subtract line 9 from line 8			10
11	Current actuarial value of annuity from Form 1099-R, box 8. If none, enter -0-			11
12	Adjusted total taxable amount. Add lines 10 and 11. If this amount is $ or more, skip lines 13 through 16, enter this amount on line 17, and go to line 18			12
13	Multiply line 12 by 50% (0.50), but don't enter more than $10,000		13
14	Subtract $20,000 from line 12. If line 12 is $20,000 or less, enter -0-	14
15	Multiply line 14 by 20% (0.20)		15
16	Minimum distribution allowance. Subtract line 15 from line 13			16
17	Subtract line 16 from line 12			17
18	Federal estate tax attributable to lump-sum distribution			18
19	Subtract line 18 from line 17. If line 11 is zero, skip lines 20 through 22 and go to line 23			19
20	Divide line 11 by line 12 and enter the result as a decimal (rounded to at least three places)		20
21	Multiply line 16 by the decimal on line 20		21
22	Subtract line 21 from line 11		22
23	Multiply line 19 by 10% (0.10)			23
24	Tax on amount on line 23. Use the Tax Rate Schedule in the instructions			24
25	Multiply line 24 by 10.0. If line 11 is zero, skip lines 26 through 28, enter this amount on line 29, and go to line 30			25
26	Multiply line 22 by 10% (0.10)		26
27	Tax on amount on line 26. Use the Tax Rate Schedule in the instructions		27
28	Multiply line 27 by 10.0			28
29	Subtract line 28 from line 25. Multiple recipients see instructions			29
30	Tax on lump-sum distribution. Add lines 7 and 29. Also include this amount in the total on Form 1040, line 44; Form 1040NR, line 42; or Form 1041, Schedule G, line 1b			30

Tax Options Available on Form 4972

20% Capital Gain Election: Apply a flat 20% rate to the capital gain portion of the distribution
10-Year Tax Option: Spread the tax over 10 years, using special IRS tables to simulate income averaging
You may elect both methods on the same return if different parts of the distribution qualify

Last reviewed: : If you believe this form requires an update, please contact us.

How to File Form 4972

Form 4972 must be filed with your federal tax return (Form 1040 or 1040-SR) in the year the lump-sum distribution is received. You'll need to transfer amounts from Form 1099-R, identify eligible capital gains, and apply the appropriate tax calculations using the worksheets provided.

It’s important to retain a copy of the Form 4972 for your records, especially if you are a beneficiary or using a carryover basis from previous elections. Improper elections can disqualify you from using the favorable tax treatment permanently.

For full instructions and eligibility rules, see the official IRS form at: IRS Form 4972 (PDF).

Frequently Asked Questions

Can I estimate the General Business Credit?

Start with Form 3800 and then reflect the credit here.

How much would a 401(k) contribution change my net?

Model it with the 401(k) Calculator then rerun this page with your pre-tax amount.

Considering an IRS Offer in Compromise?

Read through Form 656-B to understand eligibility and steps.

What does FICA include?

FICA includes Social Security and Medicare payroll taxes withheld from employee wages.

Is there a quick pay-frequency comparison?

Yes—switch frequency on this page; for employer filings see 941 vs 944.

Important Notes

All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.