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Form 4972: Tax on Lump-Sum Distributions
IRS Form 4972 is the Tax on Lump‑Sum Distributions used to compute a separate tax on a qualified lump‑sum payout received in 2025, applying either a 20% capital‑gain election, a 10‑year tax option, or both. Recipients of such distributions (individuals, nonresident aliens, estates or trusts) file it.
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IRS Form 4972 - Tax on Lump-Sum Distributions
IRS Form 4972 is the Tax on Lump‑Sum Distributions used to compute a separate tax on a qualified lump‑sum payout received in 2025, applying either a 20% capital‑gain election, a 10‑year tax option, or both. Recipients of such distributions (individuals, nonresident aliens, estates or trusts) file it.
Risk Radar
Scan points- 1Omitting line 30 tax or failing to check box 2 on Form 1040 causes underpayment.
- 2Leaving line 6 blank when the distribution includes a capital‑gain amount.
- 3Failing to multiply line 6 by 20% on line 7 for the capital‑gain election.
- 4Omitting the amount on line 8 when using the 10‑year tax option.
- 5Not adding lines 7 and 29 on line 30, resulting in an incorrect total tax.
Plain English
Form 4972 lets you figure a special tax on a large retirement payout you got in 2025. You can choose a 20% tax on the capital‑gain part, spread the tax over ten years, or use both methods. The calculated tax is added to the regular tax on your return.
Submission Date
- Filing date: 2025-11-12 09:10:06
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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Glossary Terms
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What this form is for
- Use this form when you received a qualified lump‑sum distribution in 2025 and meet the eligibility criteria (distribution of the participant’s entire balance, no rollover, participant or beneficiary born before January 2 1936, and you have not used Form 4972 for a prior distribution after 1986).
- Do not use it when the distribution is not the participant’s entire balance, any part was rolled over, the participant or beneficiary was born on or after January 2 1936, or you have already used Form 4972 for a previous distribution after 1986.
- Check Form 1040 instead when you must report the ordinary income portion of the distribution on your individual income tax return.
Form selector
Use this form or another form?
Distribution is a corrective excess deferral or other non‑qualified lump‑sum
Must be reported as ordinary income on the regular tax return
✓ Verify the distribution is non‑qualified before proceeding
Beneficiary of a participant born before Jan 2 1936 receiving qualified lump‑sum
Estate or trust return may be required for the distribution
✓ Confirm beneficiary status and participant birth date
Spouse receiving distribution as alternate payee under a QDRO
Individual return is used when not filing Form 4972
✓ Ensure QDRO status and eligibility for Form 4972
Deadline or filing window
Not stated in the official source.
Checklist
What you need before filling it out
Line 1 – Was this a distribution of the participant’s entire balance?
Yes/No answer · Form 4972 questionnaire
Line 22 – Amount subject to 20% capital gain election
Amount from Form 1099‑R box 3 · Form 1099‑R
Part II – 20% capital gain election selection
Election choice · Form 4972 Part II
Part III – 10‑year tax option calculation
Calculation of tax on lines 25‑30 · Form 4972 lines 25‑30
Signature line – Taxpayer signature
Signature · Form 4972 signature field
Before you submit
- 1Verify eligibility questions on lines 1‑5 are answered “Yes”.
- 2Confirm the distribution qualifies as a lump‑sum payout received in 2025.
- 3Ensure Form 1099‑R box 3 amount is entered on line 22.
- 4Choose either the 20% capital gain election or the 10‑year tax option in Part II or Part III.
- 5Calculate line 26 by multiplying line 22 by 0.10.
- 6Compute tax on line 27 using the Tax Rate Schedule.
- 7Multiply line 27 by 10.0 to obtain line 28.
- 8Subtract line 28 from line 25 to get line 29.
- 9Add lines 7 and 29 to determine line 30.
- 10Attach Form 4972 to the appropriate income tax return (Form 1040, 1040‑SR, 1040‑NR, or Form 1041).
- 11Sign Form 4972 before sending.
How to file this form
- 1Determine eligibility and answer Part I questions, then retain proof of eligibility.
- 2Complete the chosen calculation in Part II or Part III, then keep a copy of the calculations.
- 3Transfer the tax amount from line 30 to the appropriate line on your income tax return, then note the line reference.
- 4Attach Form 4972 to the tax return, then verify the attachment is included.
- 5Sign Form 4972, then ensure the signature is legible.
- 6Mail the tax return and attached Form 4972 to the IRS address for the return type, then obtain a mailing receipt.
- 7Retain a copy of the filed Form 4972 and supporting documents for your records, then store them securely.
Known limitations
- 1Form 4972 applies only to qualified lump‑sum distributions received in 2025.
- 2Form 4972 is limited to participants born before January 2, 1936.
- 3Form 4972 may be used only when the distribution was the participant’s entire balance from all qualified plans of one kind.
- 4If any part of the distribution was rolled over, Form 4972 cannot be used.
- 5The 20% capital‑gain election is allowed only for taxable amounts from pre‑1974 participation.
Field map
Compact field-by-field guide
General Info
2 items
Full legal name and taxpayer identification number (SSN or EIN).
Current mailing address.
Details
2 items
Complete all applicable sections of this form according to the official IRS instructions.
Enter the relevant dollar amount if this form involves tax calculation.
Certification
1 items
Read and acknowledge any certifications required by this form.
Signatures
1 items
Sign and date. Unsigned forms cannot be processed.
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Fillable formOpen in Editor->Form 4972 (2025) edition was created on 4/14/25. The form directs users to www.irs.gov/Form4972 for the latest information.
What changed or needs a fresh check
- Edition date — confirm the form shows Created 4/14/25
- Fee — Not stated in the official source
- Mailing address — Not stated in the official source
- Signature — Not stated in the official source
Quick Facts
Downloads
After you file
- 1Attach Form 4972 to the appropriate income tax return (Form 1040, 1040‑SR, 1040‑NR, or Form 1041).
- 2File Form 4972 with either an original or an amended return as needed.
- 3Retain copies of Form 4972 and all supporting records for as long as they may become material to tax administration.
- 4The separate tax calculated on Form 4972 is added to the regular tax on the filing return.
Sources
- SRCForm p.2 — purpose limited to qualified lump‑sum distributions received in 2025.
- SRCForm p.1 — title specifies participants born before January 2, 1936.
- SRCForm p.1 — Part I question 1 requires entire balance; if No, do not use this form.
- SRCForm p.1 — Part I question 2 about rollovers; if Yes, do not use this form.
- SRCForm p.3 — capital‑gain election only for taxable amounts from pre‑1974 participation.
- SRCForm p.3 — amended return must be filed within 3 years after original filing or 2 years after tax paid, whichever later.
- SRCForm p.1 — attach Form 4972 to Form 1040, 1040‑SR, 1040‑NR, or Form 1041.
- SRCForm p.4 — retain books or records as long as they may become material in tax administration.
Common confusion points
Can I use Form 4972 if I only withdrew part of my retirement account?
The form’s Part I question asks if the entire balance was distributed; a “No” answer disqualifies use.
→ Verify that the distribution represents the full balance of all qualified plans of one kind.
Do I need to file Form 4972 when I rolled over part of the distribution?
Part I question 2 states that any rollover means the form should not be used.
→ Confirm that no rollover occurred before proceeding.
Am I eligible for the 20% capital‑gain election on my distribution?
Capital‑gain treatment is limited to amounts from pre‑1974 participation.
→ Check that the distribution stems from pre‑1974 participation and that the capital‑gain amount appears in box 3 of Form 1099‑R.
Does the form apply to me if I was born after January 2, 1936?
The official title restricts use to participants born before that date.
→ Verify your birthdate; if after, the form is not applicable.
Can I use Form 4972 for a lump‑sum distribution received in 2024?
The purpose clause limits use to distributions received in 2025.
→ Ensure the distribution year is 2025 before filing.
What is the deadline to amend a return after filing Form 4972?
Amendments must be filed within 3 years of the original filing or 2 years after tax payment, whichever is later.
→ File Form 1040X within the applicable amendment window if correction is needed.
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⚠ If something goes wrong
- Consult the instructions at www.irs.gov/Form4972 for guidance or contact the IRS.
Questions about IRS Form 4972
What is IRS Form 4972 used for?
Form 4972 lets you figure a special tax on a large retirement payout you got in 2025. You can choose a 20% tax on the capital‑gain part, spread the tax over ten years, or use both methods. The calculated tax is added to the regular tax on your return.
Who must file IRS Form 4972?
The recipient of a qualified lump‑sum distribution – an individual, nonresident alien, estate, or trust – must file IRS Form 4972.
What information does IRS Form 4972 require?
Form 4972 gathers the capital‑gain amount from Form 1099‑R box 3 (line 6), calculates 20% of that amount (line 7), optionally computes the 10‑year tax option (line 8 onward), and totals the tax on line 30.
How do I complete IRS Form 4972?
Enter the amount from Form 1099‑R box 3 on line 6 if you are making the 20% capital‑gain election, then multiply that amount by 20% on line 7. If you also choose the 10‑year option, fill Part III starting with line 8 and continue through line 29. Add the results from line 7 and line 29 on line 30 and include that tax on your Form 1040, 1040‑SR, 1040‑NR (line 16, check box 2) or Form 1041 Schedule G. Attach Form 4972 to the appropriate tax return.
Can I use Form 4972 if I only withdrew part of my retirement account?
The form’s Part I question asks if the entire balance was distributed; a “No” answer disqualifies use. Verify that the distribution represents the full balance of all qualified plans of one kind.
Do I need to file Form 4972 when I rolled over part of the distribution?
Part I question 2 states that any rollover means the form should not be used. Confirm that no rollover occurred before proceeding.
Am I eligible for the 20% capital‑gain election on my distribution?
Capital‑gain treatment is limited to amounts from pre‑1974 participation. Check that the distribution stems from pre‑1974 participation and that the capital‑gain amount appears in box 3 of Form 1099‑R.
Does the form apply to me if I was born after January 2, 1936?
The official title restricts use to participants born before that date. Verify your birthdate; if after, the form is not applicable.
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