Florida
Exempt
FRS benefits and accumulated contributions are exempt from any state, county or municipal tax of Florida.
F.S. 121.131Federal
Taxable
Federal income tax is withheld from monthly benefits according to your Form W-4P; retirees get Form 1099-R.
Seminar slides (Sept. 24, 2025), slide 36; Handbook (2026), p. 8, Online ResourcesDROP lump sum
20% withheld
Plus 10% if you leave DROP before the year you turn 55.
DROP Guide (2026), p. 11, How will my DROP benefits be taxed?The DROP payout
A lump-sum DROP payment is taxed as income in the year paid, with 20% withheld; you may owe more in a higher bracket, and an extra 10% unless you leave DROP in or after the year you reach 55. A direct rollover defers the tax. DROP Guide (2026), p. 11, How will my DROP benefits be taxed?
After-tax contributions in a DROP account (pre-1975 contributions or after-tax service purchases) are paid tax-free under the IRS Simplified Method. DROP Guide (2026), p. 10; p. 24
Contributions and limits
Employee contributions since July 1, 2011 are pre-tax. Handbook (2026), p. 23, Contributions
Federal Internal Revenue Code section 415(b) limits are offset by the FRS Preservation of Benefits Plan; section 401(a)(17) limits the salary used for contributions. Handbook (2026), p. 52, Limitation of Benefits
The facts
- Florida law exempts FRS benefits from state, county and city taxes.F.S. 121.131
- Federal income tax is withheld from your benefit according to your Form W-4P, and you get a 1099-R each year.Seminar slides (Sept. 24, 2025), slide 36; Handbook (2026), p. 8
- A $100,000 DROP lump sum is paid as $80,000 after 20% withholding. In a 28% bracket you would owe $8,000 more, plus $10,000 (10%) if you leave DROP before the year you turn 55.DROP Guide (2026), p. 11
- A direct rollover of DROP money defers the tax until you withdraw it.DROP Guide (2026), p. 11
- Through FRS Online, retirees can see their federal tax withholding and other deductions, download IRS Forms 1099-R for the previous seven years, and change their federal withholding.Handbook (2026), p. 8, Online Resources
- FRS benefits can't be assigned or seized by legal process, except for qualified domestic relations orders, certain income deduction orders and federal income tax levies.Handbook (2026), p. 62, Assignment, Execution, or Attachment; F.S. 121.131
- You can pay for Pension Plan service credit with a trustee-to-trustee transfer from a 401(a), 401(k), 403(b), IRA or 457(b) account, such as a school 403(b), using the Pretax Direct Rollover/Transfer Form (PRO-1).Handbook (2026), p. 33
General information, not tax advice. Ask a tax professional about your own situation.
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Questions
Is my FRS pension taxed in Florida?
FRS benefits and accumulated contributions are exempt from any state, county or municipal tax of Florida.
Is it federally taxable?
Federal income tax is withheld from monthly benefits according to your Form W-4P; retirees get Form 1099-R.
How is a DROP payout taxed?
A lump-sum DROP payment is taxed as income in the year paid, with 20% withheld; you may owe more in a higher bracket, and an extra 10% unless you leave DROP in or after the year you reach 55. A direct rollover defers the tax.
Source: FRS Pension Plan Member Handbook, 2026 Edition, pp. 8, 23, 33, 52, 62. Also: Seminar slides (Sept. 24, 2025), slide 36; DROP Guide (2026), pp. 10, 11, 24; F.S. 121.131. Last reviewed .