This publication explains the federal income tax rules for social
security benefits and equivalent tier 1 railroad retirement benefits.
It is prepared through the joint efforts of the Internal Revenue
Service, the Social Security Administration (SSA), and the U.S.
Railroad Retirement Board (RRB).
Social security benefits
include monthly 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 2001, 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, Payments by the
Railroad Retirement Board, if you are a nonresident alien)
showing the amount.
Note.
When the term "benefits" is used in this publication, it
applies to both social security benefits and equivalent tier 1
railroad retirement benefits.
Legislation in 2000 removed the "earnings test" for social
security recipients who work and are ages 65 through 70. This change
has no effect on the federal income tax rules for social security
benefits.
What is covered in this publication.
This publication covers the following topics:
- Whether any of your benefits are taxable,
- How much is taxable,
- How to report taxable benefits,
- How to treat lump-sum benefit payments, and
- Deductions related to your benefits, including a deduction
you can claim if your repayments are more than your gross
benefits.
The Appendix at the end of this publication
explains items shown on your Forms SSA-1099, SSA-1042S,
RRB-1099, or RRB-1042S.
What is not covered in this publication.
This publication does not cover the tax rules for the following
railroad retirement benefits:
- Non-social security equivalent benefit (NSSEB) portion of
tier 1 benefits,
- Tier 2 benefits,
- Vested dual benefits, and
- Supplemental annuity benefits.
For information on these taxable pension benefits, see
Publication 575,
Pension and Annuity Income.
This publication also does not cover the tax rules for foreign
social security or railroad retirement benefits. These benefits are
taxable as annuities, unless they are exempt from U.S. tax under a
treaty.
Comments and suggestions.
We welcome your comments about this publication and your
suggestions for future editions.
You can e-mail us while visiting our web site at
www.irs.gov.
You can write to us at the following address:
Internal Revenue Service
Technical Publications Branch
W:CAR:MP:FP:P
1111 Constitution Ave. NW
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would be
helpful if you would include your daytime phone number, including the
area code, in your correspondence.
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