 So payments when you are disabled. So now we've got a once again, a kind of a more of a bit of an unusual situation here. Payments when you are disabled. So if you receive payments from a retirement or profit sharing plan that does not provide for disability retirement, do not treat those payments as disability payments. The payments must be reported as a pension or annuity. You must include in your income any amounts that you received that you would have received in retirement had you not become disabled as a result of a terrorist attack. Include in your income any payments you received from a 401K pension or other retirement plan to the extent that you would have received the amount at the same or later time regardless of whether you had become disabled. All right, let's look at an example of that. So taxpayer J, a contractor was disabled as a direct result of participating in efforts to clean up the World Trade Center. J is eligible for compensation by the September 11th Victim Compensation Fund. J began receiving a disability pension at age 55 when J could no longer continue working because of J's disability. Under J's pension plan at age 55, J is entitled to an early retirement benefit of $2,500 if J waits until age 62, normal retirement age under the plan, J would be entitled to a normal retirement benefit of $3,000 a month. The pension plan provides that a participant who retires early on account of disability is entitled to receive the participant's normal retirement benefit, which in J's case equals $3,000 per month. Until J turns 62, J can exclude $500 of the monthly retirement benefit from income, the difference between the early retirement benefit and the normal retirement benefit, that being 3,000 minus the 2,500, received on account of disability. J must report the remaining 2,500 of monthly pension benefits as taxable for each month after J turns age 62. J must report the full amount of the monthly pension benefit, that's the $3 a month as taxable. Okay, simplified method. You must use the simplified method if either of the following applies. Number one, your annuity starting date was after July 1st, 1986, and you used this method last year to figure the taxable part. Number two, your annuity starting date was after November 18th, 1996, and both of the following apply, A, the payments are from a qualified employee plan, a qualified employee annuity, or a tax shelter annuity, B, on your annuity starting date, either you were under age 75 or the number of years of guaranteed payments was fewer than five. C publication 575 for the definition of guaranteed payments. If you must use the simplified method, complete the simplified method worksheet in this instructions to figure the taxable portion of your pension or annuity. For more details on the simplified method, you can see publication 575 or publication 721 for US Civil Service Retirement Benefits. Caution, if you receive US Civil Service Retirement Benefits and you chose the alternative annuity option, you can see publication 721 to figure the taxable part of your annuity. Do not use the simplified method in these instructions. Thank you.