# Qlac annuity: US Annuity Rules and Rates

> The US Annuity Rules and Rates carries 6 published figures read from 2 sources' own pages; the 5 published figures given by rule run from 5 to 30 percent, read 17 October 2026.

Corp Tax Calculator · https://corptaxcalculator.co.uk/datasets/us-annuity-rules-and-rates/ · computed 2026-10-19

**Range by rule:** 5 to 30 % (range 5 to 30 %; 6 published figures; 5 of 18 sources read publish one).

5 of the 18 named sources read in full publish a figure; 13 publish none, read 17 October 2026.

## By rule and limit

| Breakdown | Median | Range | Sources |
|---|---|---|---|
| rule 5% additional tax on certain early distributions from a deferred annuity | 5 % | 5 to 5 % | 1 |
| rule 30% withholding on railroad retirement SSEB tier 1 benefits | 30 % | 30 to 30 % | 1 |
| rule default withholding on a nonperiodic distribution | 10 % | 10 to 10 % | 1 |
| rule estimated tax adjusted gross income threshold | 150,000 USD | 150,000 to 150,000 USD | 1 |
| rule free-look cancellation period | 10 day | 10 to 10 day | 1 |
| rule typical starting surrender charge on an annuity withdrawal | 7 % | 7 to 7 % | 1 |
| rule 10% federal tax penalty on early annuity withdrawals | 10 % | 10 to 10 % | 1 |
| rule variable annuity surrender period (eight years or more) | 8 year | 8 to 8 year | 1 |
| limit upper bound of starting surrender charge, declining to zero over about seven or eight years | 20 % | 20 to 20 % | 1 |
| limit upper end of typical indexed-annuity surrender period (six to ten years or longer) | 10 year | 10 to 10 year | 1 |
| limit upper end of usual free-look cancellation period (10 to 30 days) | 30 day | 30 to 30 day | 1 |

## Every figure, with its source

One row per source: the figure the source's own page publishes, the page, and the day it was read.

| Source | Figure | Breakdown | Read |
|---|---|---|---|
| [IRS Publication 575 - Pension and Annuity Income](https://www.irs.gov/publications/p575) | 150,000 USD | estimated tax adjusted gross income threshold | 2026-10-17 |
| [IRS Publication 575 - Pension and Annuity Income](https://www.irs.gov/publications/p575) | 30 % | 30% withholding on railroad retirement SSEB tier 1 benefits | 2026-10-17 |
| [SEC Investor.gov - updated investor bulletin: variable annuities](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-5) | 30 day | upper end of usual free-look cancellation period (10 to 30 days) | 2026-10-17 |
| [US Department of Labor / EBSA - innovations and trends in annuities (QLACs)](https://www.dol.gov/sites/dolgov/files/ebsa/pdf_files/innovations-and-trends-in-annuities.pdf) | 20 % | upper bound of starting surrender charge, declining to zero over about seven or eight years | 2026-10-17 |
| [IRS Publication 575 - Pension and Annuity Income](https://www.irs.gov/publications/p575) | 10 % | default withholding on a nonperiodic distribution | 2026-10-17 |
| [SEC Investor.gov - updated investor bulletin: variable annuities](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-5) | 10 day | free-look cancellation period | 2026-10-17 |
| [US Department of Labor / EBSA - innovations and trends in annuities (QLACs)](https://www.dol.gov/sites/dolgov/files/ebsa/pdf_files/innovations-and-trends-in-annuities.pdf) | 10 % | 10% federal tax penalty on early annuity withdrawals | 2026-10-17 |
| [SEC Investor.gov - updated investor bulletin: indexed annuities](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-investor-bulletin-indexed-annuities) | 10 year | upper end of typical indexed-annuity surrender period (six to ten years or longer) | 2026-10-17 |
| [FINRA - annuities (investor information)](https://www.finra.org/investors/investing/investment-products/annuities) | 8 year | variable annuity surrender period (eight years or more) | 2026-10-17 |
| [US Department of Labor / EBSA - innovations and trends in annuities (QLACs)](https://www.dol.gov/sites/dolgov/files/ebsa/pdf_files/innovations-and-trends-in-annuities.pdf) | 7 % | typical starting surrender charge on an annuity withdrawal | 2026-10-17 |
| [IRS Publication 575 - Pension and Annuity Income](https://www.irs.gov/publications/p575) | 5 % | 5% additional tax on certain early distributions from a deferred annuity | 2026-10-17 |

## The sentence each figure was read from (11)

- [IRS Publication 575 - Pension and Annuity Income](https://www.irs.gov/publications/p575), read 2026-10-17: "If your adjusted gross income for 2025 was more than $150,000 ($75,000 if your filing status for 2026 is married filing separately), substitute 110% for 100% in (2) above."
- [IRS Publication 575 - Pension and Annuity Income](https://www.irs.gov/publications/p575), read 2026-10-17: "tax on your SSEB portion of tier 1 benefits at a 30% rate, unless exempt or subject to a lower treaty rate."
- [SEC Investor.gov - updated investor bulletin: variable annuities](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-5), read 2026-10-17: "You may cancel your contract within a short period (usually 10 to 30 days) of receiving it without a penalty fee called a surrender charge."
- [US Department of Labor / EBSA - innovations and trends in annuities (QLACs)](https://www.dol.gov/sites/dolgov/files/ebsa/pdf_files/innovations-and-trends-in-annuities.pdf), read 2026-10-17: "20%) and declines yearly until it reaches zero, typically around seven or eight years"
- [IRS Publication 575 - Pension and Annuity Income](https://www.irs.gov/publications/p575), read 2026-10-17: "Unless you choose no withholding, the withholding rate for a nonperiodic distribution (a payment other than a periodic payment) that isn’t an eligible rollover distribution is 10% of the distribution."
- [SEC Investor.gov - updated investor bulletin: variable annuities](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-5), read 2026-10-17: "You may cancel your contract within a short period (usually lasting at least 10 days) of receiving it without a surrender charge."
- [US Department of Labor / EBSA - innovations and trends in annuities (QLACs)](https://www.dol.gov/sites/dolgov/files/ebsa/pdf_files/innovations-and-trends-in-annuities.pdf), read 2026-10-17: "capital gains rate. Furthermore, withdrawals are subject to a 10% federal tax penalty"
- [SEC Investor.gov - updated investor bulletin: indexed annuities](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-investor-bulletin-indexed-annuities), read 2026-10-17: "The surrender period is a set period of time that typically lasts six to ten years, or even longer, after you purchase the annuity."
- [FINRA - annuities (investor information)](https://www.finra.org/investors/investing/investment-products/annuities), read 2026-10-17: "Variable annuities can feature surrender periods of eight years or more."
- [US Department of Labor / EBSA - innovations and trends in annuities (QLACs)](https://www.dol.gov/sites/dolgov/files/ebsa/pdf_files/innovations-and-trends-in-annuities.pdf), read 2026-10-17: "This “surrender charge” or “withdrawal charge” usually starts at around 7% of the value of the withdrawal (but can reach as high as"
- [IRS Publication 575 - Pension and Annuity Income](https://www.irs.gov/publications/p575), read 2026-10-17: "5% rate on certain early distributions from deferred annuity contracts."

## Read in full, publishes no figure

- [IRS - about Publication 575](https://www.irs.gov/forms-pubs/about-publication-575), read 2026-10-17: read in full and no accepted figure on the page
- [IRS Publication 939 - General Rule for Pensions and Annuities](https://www.irs.gov/publications/p939), read 2026-09-12: every candidate on the page was refused
- [IRS - about Publication 939](https://www.irs.gov/forms-pubs/about-publication-939), read 2026-09-12: read in full and no accepted figure on the page
- [IRS - Topic no. 411, pensions: the General Rule and the Simplified Method](https://www.irs.gov/taxtopics/tc411), read 2026-09-26: read in full and no accepted figure on the page
- [IRS - required minimum distributions (retirement topics)](https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds), read 2026-09-12: every candidate on the page was refused
- [IRS - additional resources for plan participants](https://www.irs.gov/retirement-plans/plan-participant-employee/additional-resources), read 2026-09-12: read in full and no accepted figure on the page
- [FINRA - 2025 annual regulatory oversight report, annuities](https://www.finra.org/rules-guidance/guidance/reports/2025-finra-annual-regulatory-oversight-report/annuities), read 2026-10-10: every candidate on the page was refused
- [NAIC - annuity suitability and best interest standard](https://content.naic.org/insurance-topics/annuity-suitability-and-best-interest-standard), read 2026-10-17: every candidate on the page was refused
- [NAIC CIPR - annuity suitability and best interest standard](https://content.naic.org/cipr-topics/annuity-suitability-best-interest-standard), read 2026-10-10: read in full and no accepted figure on the page
- [NOLHGA - product coverage FAQs (the guaranty-association limits)](https://nolhga.com/policyholders/faqs-product-coverage/), read 2026-09-12: read in full and no accepted figure on the page
- [Medicaid Planning Assistance - eligibility by annuity](https://www.medicaidplanningassistance.org/eligibility-by-annuity/), read 2026-09-12: every candidate on the page was refused
- [IRS Publication 939 (PDF)](https://www.irs.gov/pub/irs-pdf/p939.pdf), read 2026-09-20: every candidate on the page was refused
- [FINRA - the complicated risks and rewards of indexed annuities](https://www.finra.org/investors/insights/complicated-risks-and-rewards-indexed-annuities), read 2026-10-10: every candidate on the page was refused

## Methodology

Every row is a verbatim sentence read from the named source's own page through our fetch service on the date shown, hash-pinned to the stored read (the sha of the page's visible text; the raw page is mirrored to R2). 5 of the 18 named sources that could be read published a usable figure; 13 published none and are recorded as not published, never filled in; 0 could not be read (blocked, dead or unreachable) and count nowhere. The headline figures (median, minimum, maximum, quartiles) are over ONE figure per source for each breakdown it prices, in % (a source's median where its page yielded several accepted sentences for one breakdown), so a page that gives figures for several breakdowns gives one for each and N counts 6 figures, never sentences; 108 candidate sentence(s) were refused by a reviewer with the reason recorded. The fuller derivation this dataset is chartered to grow into (not yet what the figures above are; they are each source's own published figure as read): one row per US product per rule and limit, quoted verbatim from the federal authority with its effective year - the QLAC premium limit and the age-85 latest starting date under the RMD regulations, the General Rule and Simplified Method for taxing annuity income, the 5% additional tax on certain early distributions from deferred contracts, the participation rate / cap rate / surrender-charge mechanics of an indexed contract, the free-look period, the best-interest standard a recommendation must meet, the guaranty-association present-value limit per contract, and the Deficit Reduction Act conditions a Medicaid-compliant annuity must satisfy. The DERIVATION is the comparison nobody publishes: for one pot, what each product's stated mechanics actually produce - a cap rate of 5% against an index return of 10% credits 5%, a participation rate of 75% against 10% credits 7.5% - beside the guaranteed alternative, with the state limit that would apply if the carrier failed.

## Sources

- [IRS Publication 575 - Pension and Annuity Income](https://www.irs.gov/publications/p575) (the publisher's own terms; quoted for reporting and comment)
- [IRS - about Publication 575](https://www.irs.gov/forms-pubs/about-publication-575) (the publisher's own terms; quoted for reporting and comment)
- [IRS Publication 939 - General Rule for Pensions and Annuities](https://www.irs.gov/publications/p939) (the publisher's own terms; quoted for reporting and comment)
- [IRS - about Publication 939](https://www.irs.gov/forms-pubs/about-publication-939) (the publisher's own terms; quoted for reporting and comment)
- [IRS - Topic no. 411, pensions: the General Rule and the Simplified Method](https://www.irs.gov/taxtopics/tc411) (the publisher's own terms; quoted for reporting and comment)
- [IRS - required minimum distributions (retirement topics)](https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds) (the publisher's own terms; quoted for reporting and comment)
- [IRS - additional resources for plan participants](https://www.irs.gov/retirement-plans/plan-participant-employee/additional-resources) (the publisher's own terms; quoted for reporting and comment)
- [SEC Investor.gov - updated investor bulletin: indexed annuities](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-investor-bulletin-indexed-annuities) (the publisher's own terms; quoted for reporting and comment)
- [SEC Investor.gov - updated investor bulletin: variable annuities](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-5) (the publisher's own terms; quoted for reporting and comment)
- [FINRA - annuities (investor information)](https://www.finra.org/investors/investing/investment-products/annuities) (the publisher's own terms; quoted for reporting and comment)
- [FINRA - 2025 annual regulatory oversight report, annuities](https://www.finra.org/rules-guidance/guidance/reports/2025-finra-annual-regulatory-oversight-report/annuities) (the publisher's own terms; quoted for reporting and comment)
- [NAIC - annuity suitability and best interest standard](https://content.naic.org/insurance-topics/annuity-suitability-and-best-interest-standard) (the publisher's own terms; quoted for reporting and comment)
- [NAIC CIPR - annuity suitability and best interest standard](https://content.naic.org/cipr-topics/annuity-suitability-best-interest-standard) (the publisher's own terms; quoted for reporting and comment)
- [NOLHGA - product coverage FAQs (the guaranty-association limits)](https://nolhga.com/policyholders/faqs-product-coverage/) (the publisher's own terms; quoted for reporting and comment)
- [Medicaid Planning Assistance - eligibility by annuity](https://www.medicaidplanningassistance.org/eligibility-by-annuity/) (the publisher's own terms; quoted for reporting and comment)
- [IRS Publication 939 (PDF)](https://www.irs.gov/pub/irs-pdf/p939.pdf) (the publisher's own terms; quoted for reporting and comment)
- [US Department of Labor / EBSA - innovations and trends in annuities (QLACs)](https://www.dol.gov/sites/dolgov/files/ebsa/pdf_files/innovations-and-trends-in-annuities.pdf) (the publisher's own terms; quoted for reporting and comment)
- [FINRA - the complicated risks and rewards of indexed annuities](https://www.finra.org/investors/insights/complicated-risks-and-rewards-indexed-annuities) (the publisher's own terms; quoted for reporting and comment)

## Cite or embed

- The US Annuity Rules and Rates carries 6 published figures read from 2 sources' own pages; the 5 published figures given by rule run from 5 to 30 percent, read 17 October 2026.
- 5 of the 18 named sources read in full publish a figure; 13 publish none, read 17 October 2026.
- US Annuity Rules and Rates, rule 5% additional tax on certain early distributions from a deferred annuity: median 5 percent across 1 source, read 17 October 2026.
- US Annuity Rules and Rates, rule 30% withholding on railroad retirement SSEB tier 1 benefits: median 30 percent across 1 source, read 17 October 2026.
- US Annuity Rules and Rates, rule default withholding on a nonperiodic distribution: median 10 percent across 1 source, read 17 October 2026.
- US Annuity Rules and Rates, rule estimated tax adjusted gross income threshold: median 150,000 USD across 1 source, read 17 October 2026.
- US Annuity Rules and Rates, rule free-look cancellation period: median 10 day across 1 source, read 17 October 2026.
- US Annuity Rules and Rates, rule typical starting surrender charge on an annuity withdrawal: median 7 percent across 1 source, read 17 October 2026.
- US Annuity Rules and Rates, rule 10% federal tax penalty on early annuity withdrawals: median 10 percent across 1 source, read 17 October 2026.
- US Annuity Rules and Rates, rule variable annuity surrender period (eight years or more): median 8 year across 1 source, read 17 October 2026.
- US Annuity Rules and Rates, limit upper bound of starting surrender charge, declining to zero over about seven or eight years: median 20 percent across 1 source, read 17 October 2026.
- US Annuity Rules and Rates, limit upper end of typical indexed-annuity surrender period (six to ten years or longer): median 10 year across 1 source, read 17 October 2026.
- US Annuity Rules and Rates, limit upper end of usual free-look cancellation period (10 to 30 days): median 30 day across 1 source, read 17 October 2026.

Cite as: "Corp Tax Calculator US Annuity Rules and Rates", updated 2026-10-19, https://corptaxcalculator.co.uk/datasets/us-annuity-rules-and-rates/.

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