What is an exclusion amount?
If you began contributing to the South Carolina Retirement Systems on a non-deferred (after tax) basis prior to 1982, or remitted any personal check payments for service purchases, there may be a small portion (comparatively) of non-deferred funds in your account. These non-deferred dollars, which are distributed throughout your lifetime in your monthly retirement checks, are known as an exclusion amount. When you begin to draw your retirement checks in retirement and file taxes each year, the exclusion amount is reported in box 5 on the Form 1099-R to ensure that you will not be subject to taxes on that portion again. If you are participating in the Teacher and Employee Retention Incentive (TERI) program, your TERI account balance may have accrued these non-deferred funds from your exclusion amount. This amount would not be eligible for rollover unless the rollover account, such as an Individual Retirement Account (IRA), accepts after-tax funds.
