How is a pension treated if the taxpayer has not made any contributions?

If a taxpayer has not made any contributions to a pension, the pension benefits received are generally fully taxable as ordinary income when they are distributed. This treatment is based on the fact that the taxpayer has not invested any after-tax dollars into the pension plan, which means that all distributions from the pension represent taxable income.

In contrast, options suggesting that the pension could be entirely non-taxable or only taxable under specific conditions do not align with the standard tax treatment of pensions. While there are tax-advantaged accounts and certain distributions that may have unique tax implications, the lack of contributions to a pension typically results in the entire amount being taxable when received. Additionally, stating that the pension would not affect tax return filings overlooks the necessity of reporting taxable income on the tax return, which would include any amounts received from the pension.