![]() citizens and nonresident aliens), shows the NSSEB portion of Tier I, Tier II, vested dual benefit, and supplemental annuity paid to the annuitant during the tax year, and may show an employee contribution amount. The other statement, Form RRB-1099-R (for both U.S. Illustrations and explanations of items found on Form RRB-1099 and Form RRB-1042S can be found in IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits. ![]() ![]() The amount of any offset for workers’ compensation and the amount of federal income tax withheld from these payments are also shown. ![]() citizens or residents (or Form RRB-1042S for nonresident aliens), shows the SSEB portion of Tier I or special minimum guaranty payments made during the tax year, the amount of any such benefits that an annuitant may have repaid to the RRB during the tax year, and the net amount of these payments after subtracting the repaid amount. What information is shown on the railroad retirement tax statements sent to annuitants in January? This is because social security benefits based on age and service are not payable before age 62, social security disability benefit entitlement requires total disability, and the Social Security Administration does not pay some categories of beneficiaries paid by the RRB.Ĥ. In some cases, primarily those in which early retirement benefits are payable to retired employees and spouses between ages 60 and 62, some occupational disability benefits, and other categories of unique RRB entitlements, the entire annuity may be treated like a private pension. The NSSEB portion of Tier I, Tier II benefits, vested dual benefits, and supplemental annuities are all treated like private pensions for Federal income tax purposes. Which railroad retirement benefits are treated like private pensions for federal income tax purposes? $34,000 for an individual ($44,000 for a married couple filing jointly), or zero for a married individual who files separately but lived with his or her spouse any part of the year, up to 85 percent of these railroad retirement benefit payments may be taxable income.ģ.$25,000 but are less than $34,000 for an individual ($32,000 but are less than $44,000 for a married couple filing jointly), up to 50 percent of these benefits may be considered taxable income.If taxable pensions, wages, interest, dividends, and other taxable income, plus tax-exempt interest income, plus half of the amount of the social security equivalent benefit payments exceed: The amount of these benefits that may be subject to federal income tax, if any, depends on the beneficiary’s income. The SSEB portion of tier I (the part of a railroad retirement annuity equivalent to a social security benefit based on comparable earnings) is treated for federal income tax purposes the same way as a social security benefit. Which railroad retirement benefits are treated as social security benefits for federal income tax purposes? Consequently, most annuitants are sent two tax statements from the RRB each January, even though they receive only a single annuity payment each month.Ģ. In most cases, part of a railroad retirement annuity is treated like a social security benefit for Federal income tax purposes, while other parts of the annuity are treated like private pensions for tax purposes. How are the annuities paid under the Railroad Retirement Act treated under the federal income tax laws?Ī railroad retirement annuity is a single payment comprised of one or more of the following components, depending on the annuitant’s age, the type of annuity being paid, and eligibility requirements: a Social Security Equivalent Benefit (SSEB) portion of Tier I, a Non-Social Security Equivalent Benefit (NSSEB) portion of Tier I, a Tier II benefit, a vested dual benefit, and a supplemental annuity. For further federal income tax information, railroad retirement beneficiaries should contact the nearest office of the Internal Revenue Service (IRS).ġ. Railroad retirement beneficiaries needing information about these statements, or about tax withholding from their benefits, should contact an office of the RRB. The following questions and answers describe the tax statements issued by the Railroad Retirement Board (RRB) each January for federal income tax purposes.
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