What you're taxed on is the monthly amount from your payment option. For Social Security on your North Dakota return, see Social Security and TFFR. Related: working after retirement.
Federal and state
Benefits are taxable as ordinary income under federal and state law. RIO reports on Form 1099-R and can withhold federal and North Dakota tax only. After-tax contributions are recovered tax-free under the IRS Simplified General Rule. Handbook p. 24, Taxation; Retirement Guide (2023) p. 8, Section F
North Dakota
The 2025 North Dakota income tax booklet lists subtractions for U.S. Railroad Retirement benefits, licensed peace officer retirement, military retirement and Social Security, and no subtraction for TFFR or other public pensions. ND 2025 income tax booklet pp. 12-13, Form ND-1 Lines 8, 9, 14, 15; p. 14, Line 16
The tax-free part of each payment
Previously taxed contributions / number of monthly payments = tax-free part of each monthly benefit. Single life and 10/20-year certain use the member's age; joint and survivor options use the member's and beneficiary's ages combined. Handbook pp. 24-25, Non-taxable Benefit (table)
| Your age (single life, term certain) | Payments | Combined ages (joint and survivor) | Payments |
|---|---|---|---|
| 55 or under | 360 | 110 or under | 410 |
| 56-60 | 310 | 111-120 | 360 |
| 61-65 | 260 | 121-130 | 310 |
| 66-70 | 210 | 131-140 | 260 |
| 71 or over | 160 | 141 or over | 210 |
Required minimum distributions
RMD rules apply to inactive members (vested or not). Members still in TFFR-covered work past RMD age are not yet subject; once they stop, they must start a benefit or take a refund by April 1 of the following year. Handbook pp. 25-26, Required Minimum Distribution; NDCC 15-39.1-10(4)
From the sources
- TFFR benefits are taxable as ordinary income for federal and state tax. RIO can withhold federal and North Dakota tax only. Contributions you paid after tax come back tax-free over a set number of payments (Simplified General Rule).Handbook pp. 24-25, Taxation
- North Dakota's 2025 income tax return has subtractions for Social Security, military retirement, licensed peace officer retirement and Railroad Retirement benefits, but none for TFFR or other public pensions.ND 2025 income tax booklet pp. 12-14, Form ND-1 Lines 8, 9, 14, 15, 16
Questions
Is my TFFR pension taxed?
Yes. TFFR benefits are taxable as ordinary income for federal and North Dakota income tax.
Does North Dakota exempt teacher pensions?
The 2025 North Dakota income tax booklet lists subtractions for Social Security, military retirement, licensed peace officer retirement and Railroad Retirement benefits, and none for TFFR or other public pensions.
Is any of my payment tax-free?
The part that returns contributions you already paid tax on. The IRS Simplified General Rule spreads them over a set number of payments based on your age.
Can RIO withhold tax for another state?
No. RIO can withhold federal and North Dakota tax only.
Source: Teachers' Fund for Retirement Member Handbook, 5/7/2026, pp. 24-25, 25-26. Also: Retirement Guide (2023); ND 2025 income tax booklet; NDCC 15-39.1-10. Last reviewed .