Last updated: October 24, 2026
Quick Answer
Part of the payments you receive from an annuity will be considered as a return of the premium you’ve paid. You won’t have to pay taxes on that part.
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Questions & Answers
| Question | Answer |
|---|---|
| Must I pay taxes on the interest from my annuity? | You must pay taxes on the part that is considered interest when you withdraw the money. |
| Is part of my annuity payment considered interest I earned? | Another part of the payments is considered interest you’ve earned. |
| Do I pay ordinary income tax on all money from an annuity? | When you take a withdrawal or receive payments, you’ll pay ordinary income tax on all of the money you receive (not just the interest or the investment return). |
Related Questions
Large Print Version
Is all of my annuity payment taxable or just the earnings?
Part of the payments you receive from an annuity will be considered as a return of the premium you’ve paid. You won’t have to pay taxes on that part.
Must I pay taxes on the interest from my annuity?
You must pay taxes on the part that is considered interest when you withdraw the money.
Is part of my annuity payment considered interest I earned?
Another part of the payments is considered interest you’ve earned.
Do I pay ordinary income tax on all money from an annuity?
When you take a withdrawal or receive payments, you’ll pay ordinary income tax on all of the money you receive (not just the interest or the investment return).
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Educational content provided by Jeffrey Scott McLeod, LUTC, National Insurance Producer License #558629. This is for informational purposes only and is not a recommendation to buy or sell any annuity. Guarantees are subject to the claims-paying ability of the issuing insurance company. Always consult your own advisor and read the full NAIC Buyer’s Guide. For residents of your state.
Jeffrey Scott McLeod, LUTC — National Producer #558629.
Questions? Contact Jeff@AnnuitiesExplained.org.