Is Income From Annuities Taxable? 
There are two answers : One covering qualified plans and the other non-qualified plans . Incomes from qualified annuities are completely taxable at ordinary income tax rates . Income from non-qualified annuities tax only the gain and if the income is generated by lifetime annuitization the basis will be distributed tax free and amortized from the date of distribution to life expectancy , i.e. via the exclusion ratio . 