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Publication 17
taxmap/pub17/p17-057.htm#en_us_publink1000171893

Chapter 11
Social Security and Equivalent Railroad Retirement Benefits(p81)

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This chapter explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits. It explains the following topics.
Social security benefits include monthly retirement, survivor, and disability benefits. They do not include supplemental security income (SSI) payments, which are not taxable.
Equivalent tier 1 railroad retirement benefits are the part of tier 1 benefits that a railroad employee or beneficiary would have been entitled to receive under the social security system. They are commonly called the social security equivalent benefit (SSEB) portion of tier 1 benefits.
If you received these benefits during 2010, you should have received a Form SSA-1099, Social Security Benefit Statement, or Form RRB-1099, Payments by the Railroad Retirement Board (Form SSA-1042S, Social Security Benefit Statement, or Form RRB-1042S, Statement for Nonresident Alien Recipients of: Payments by the Railroad Retirement Board, if you are a nonresident alien). These forms show the amounts received and repaid, and taxes withheld for the year. You may receive more than one of these forms for the same year. You should add the amounts shown on all forms you receive for the year to determine the total amounts received and repaid, and taxes withheld for that year. See the Appendix at the end of Publication 915 for more information.
Note.When the term "benefits" is used in this chapter, it applies to both social security benefits and the SSEB portion of tier 1 railroad retirement benefits.
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What is not covered in this chapter.(p81)

rule
This chapter does not cover the tax rules for the following railroad retirement benefits. For information on these benefits, see Publication 575, Pension and Annuity Income.
This chapter also does not cover the tax rules for foreign social security benefits. These benefits are taxable as annuities, unless they are exempt from U.S. tax or treated as a U.S. social security benefit under a tax treaty.

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Useful items

You may want to see:


Publication
 575 Pension and Annuity Income
 590 Individual Retirement Arrangements (IRAs)
 915 Social Security and Equivalent Railroad Retirement Benefits
Forms (and Instructions)
 1040-ES: Estimated Tax for Individuals
 W-4V: Voluntary Withholding Request
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Are Any of Your Benefits Taxable?(p81)

rule
To find out whether any of your benefits may be taxable, compare the base amount for your filing status with the total of:
  1. One-half of your benefits, plus
  2. All your other income, including tax-exempt interest.
When making this comparison, do not reduce your other income by any exclusions for:
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Children's benefits.(p81)

rule
The rules in this chapter apply to benefits received by children. See Who is taxed, later.
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Figuring total income.(p81)

rule
To figure the total of one-half of your benefits plus your other income, use Worksheet 11-1 later in this discussion. If the total is more than your base amount, part of your benefits may be taxable.
If you are married and file a joint return for 2010, you and your spouse must combine your incomes and your benefits to figure whether any of your combined benefits are taxable. Even if your spouse did not receive any benefits, you must add your spouse's income to yours to figure whether any of your benefits are taxable.
Deposit
If the only income you received during 2010 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits generally are not taxable and you probably do not have to file a return. If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable.
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Base amount.(p81)

rule
Your base amount is:
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Worksheet 11-1.(p81)

rule
You can use Worksheet 11-1 to figure the amount of income to compare with your base amount. This is a quick way to check whether some of your benefits may be taxable.
Worksheet 11-1. A Quick Way To Check if Your Benefits May be Taxable
A.Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Include the full amount of any lump-sum benefit payments received in 2010, for 2010 and earlier years. (If you received more than one form, combine the amounts from box 5 and enter the total.) A.
Note. If the amount on line A is zero or less, stop here; none of your benefits are taxable this year.
B.Enter one-half of the amount on line AB.
C.Enter your taxable pensions, wages, interest, dividends, and other taxable incomeC.
    
D.Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income ( listed earlier) D.
E.Add lines B, C, and DE.
Note. Compare the amount on line E to your base amount for your filing status. If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. If the amount on line E is more than your base amount, some of your benefits may be taxable. You need to complete Worksheet 1 in Publication 915 (or the Social Security Benefits Worksheet in your tax form instructions). If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable, later, under How To Report Your Benefits.
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Example.(p82)

You and your spouse (both over 65) are filing a joint return for 2010 and you both received social security benefits during the year. In January 2011, you received a Form SSA-1099 showing net benefits of $7,500 in box 5. Your spouse received a Form SSA-1099 showing net benefits of $3,500 in box 5. You also received a taxable pension of $22,000 and interest income of $500. You did not have any tax-exempt interest income. Your benefits are not taxable for 2010 because your income, as figured in Worksheet 11-1 on this page, is not more than your base amount ($32,000) for married filing jointly.
Even though none of your benefits are taxable, you must file a return for 2010 because your taxable gross income ($22,500) exceeds the minimum filing requirement amount for your filing status.
Filled-in Worksheet 11-1. A Quick Way To Check if Your Benefits May be Taxable
A.Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Include the full amount of any lump-sum benefit payments received in 2010, for 2010 and earlier years. (If you received more than one form, combine the amounts from box 5 and enter the total.) A.$ 11,000
Note. If the amount on line A is zero or less, stop here; none of your benefits are taxable this year.
B.Enter one-half of the amount on line AB.5,500
C.Enter your taxable pensions, wages, interest, dividends, and other taxable incomeC. 22,500
D.Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income ( listed earlier) D.-0-
    
E.Add lines B, C, and DE.$28,000
Note. Compare the amount on line E to your base amount for your filing status. If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. If the amount on line E is more than your base amount, some of your benefits may be taxable. You then need to complete Worksheet 1 in Publication 915 (or the Social Security Benefits Worksheet in your tax form instructions). If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable, later, under How To Report Your Benefits.
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Who is taxed.(p82)

rule
Benefits are included in the taxable income (to the extent they are taxable) of the person who has the legal right to receive the benefits. For example, if you and your child receive benefits, but the check for your child is made out in your name, you must use only your part of the benefits to see whether any benefits are taxable to you. One-half of the part that belongs to your child must be added to your child's other income to see whether any of those benefits are taxable to your child.
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Repayment of benefits.(p82)

rule
Any repayment of benefits you made during 2010 must be subtracted from the gross benefits you received in 2010. It does not matter whether the repayment was for a benefit you received in 2010 or in an earlier year. If you repaid more than the gross benefits you received in 2010, see Repayments More Than Gross Benefits, later.
Your gross benefits are shown in box 3 of Form SSA-1099 or RRB-1099. Your repayments are shown in box 4. The amount in box 5 shows your net benefits for 2010 (box 3 minus box 4). Use the amount in box 5 to figure whether any of your benefits are taxable.
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Tax withholding and estimated tax.(p82)

rule
You can choose to have federal income tax withheld from your social security benefits and/or the SSEB portion of your tier 1 railroad retirement benefits. If you choose to do this, you must complete a Form W-4V.
If you do not choose to have income tax withheld, you may have to request additional withholding from other income or pay estimated tax during the year. For details, see Publication 505, Tax Withholding and Estimated Tax, or the instructions for Form 1040-ES.