The amount of an annuity payment that is not subject to income tax when received, since it is considered to be the return of the original principal.
Related information about exclusion ratio:
- Exclusion Ratio Definition | Investopedia
 The portion of the return on investments that is income tax exempt. It represents a   payback of initial investments rather than capital gains.
 
- What is exclusion ratio? definition and meaning
 Definition of exclusion ratio: The amount of an annuity payment that is not subject   to income tax when received, since it is considered to be the return of the ...
 
- Exclusion Ratio - Financial Dictionary - The Free Dictionary
 The percentage of an investor's return that is not subject to taxes. The exclusion   ratio is a percentage with a dollar amount equal to the payback on one's initial ...
 
- Frequently Asked Questions - Annuity Advisors
 How long does the exclusion ratio take effect? What are the ... The exclusion ratio   determines the taxable and nontaxable portions of each payment. The formula ...
 
- Fool.com: Annuity Taxation [Annuities]
 The amount of each payment that won't be taxed is computed by establishing an "  exclusion ratio" that's determined by dividing your investment in the contract by ...
 
- What Is an Exclusion Ratio?
 Annuity investors often have to pay taxes on their returns, but a portion of the   return that is not taxed is known as the exclusion ratio. The reason this exclusion ...
 
- Immediate Annuity Exclusion Ratio | Finance - Zacks
 An immediate annuity provides a guaranteed monthly income in exchange for a   lump sum of money. This type of annuity typically is used to provide a set ...
 
- Publication 939 (04/2003), General Rule for Pensions and Annuities
 Your exclusion ratio is 12% and you exclude $100 a month. Your exclusion ...   The exclusion ratio is 10.8%, and your monthly exclusion is $90. After 5 years (60 ...