Publication 915 |
2000 Tax Year |
Are Any of Your Benefits Taxable?
To find out whether any of your benefits are taxable, compare the
base amount (explained later) for your filing status with
the total of:
- One-half of your benefits, plus
- All your other income, including tax-exempt interest.
Exclusions.
When making this comparison, do not reduce your income by any
exclusions for:
- Interest from qualified U.S. savings bonds,
- Employer-provided adoption benefits,
- Foreign earned income or foreign housing, or
- Income earned in American Samoa or Puerto Rico by bona fide
residents.
RRB issues Form RRB-1099 and Form RRB-1042S while SSA
issues Form SSA-1099 and Form SSA-1042S. These forms (tax
statements) report the amounts paid and repaid, and taxes withheld for
a tax year. You may receive more than one Form RRB-1099, Form
RRB-1042S, Form SSA-1099, and/or Form SSA-1042S for
the same tax year. You should add the amounts shown on all forms you
receive from the SSA and/or RRB for the same tax year to determine the
"total" amounts paid and repaid, and taxes withheld for that tax
year. See Appendix, at the end of this publication for
more information.
Each original Form RRB-1099 is valid unless it has been
corrected. The RRB will issue a corrected Form RRB-1099 if there
is an error in the original. A corrected Form RRB-1099 is
indicated as "CORRECTED" and replaces the corresponding original
Form RRB-1099. You must use the latest corrected Form
RRB-1099 you received and any original Form RRB-1099 that
the RRB has not corrected when you determine what amounts to report on
your tax return.
Figuring total income.
To figure the total of one-half of your benefits plus your other
income, use the worksheet 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 2000, 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.
If the only income you received during 2000 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.
Base amount.
Your base amount is:
- $25,000 if you are single, head of household, or qualifying
widow(er),
- $25,000 if you are married filing separately and lived
apart from your spouse for all of 2000,
- $32,000 if you are married filing jointly, or
- $-0- if you are married filing separately and
lived with your spouse at any time during 2000.
Worksheet. You can use the following worksheet 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.
A. |
Write in 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 2000, for 2000 and
earlier years. (If you received more than one form, combine the
amounts from box 5 and write in 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 A |
B. |
|
C. |
Add your taxable pensions, wages, interest,
dividends, and other taxable income and write in the total |
C. |
|
D. |
Write in any tax-exempt interest (such as
interest on municipal bonds) plus any exclusions from income (shown in
the list under Exclusions, earlier). |
D. |
|
E. |
Add lines B, C, and D and write in the total
|
E. |
|
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, shown
later. |
Example.
You and your spouse are filing a joint return for 2000 and you both
received social security benefits during the year. In January 2001,
you received a Form SSA-1099 showing net benefits of $6,600 in
box 5. Your spouse received a Form SSA-1099 showing net benefits
of $2,400 in box 5. You also received a taxable pension of $10,000 and
interest income of $500. You did not have any tax-exempt interest
income. Your benefits are not taxable for 2000 because your income, as
figured in the following worksheet, is not more than your base amount
($32,000).
A. |
Write in 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 2000, for 2000 and
earlier years. (If you received more than one form, combine the
amounts from box 5 and write in the total.) |
A. |
$9,000 |
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 A |
B. |
4,500 |
C. |
Add your taxable pensions, wages, interest,
dividends, and other taxable income and write in the total |
C. |
10,500 |
D. |
Write in any tax-exempt interest income (such
as interest on municipal bonds) plus any exclusions from income (shown
in the list under Exclusions, earlier). |
D. |
-0- |
E. |
Add lines B, C, and D and write in the total
|
E. |
$15,000 |
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, shown
later. |
Who is taxed.
The person who has the legal right to receive the benefits must
determine whether the benefits are taxable. 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.
Repayment of benefits.
Any repayment of benefits you made during 2000 must be subtracted
from the gross benefits you received in 2000. It does not matter
whether the repayment was for a benefit you received in 2000 or in an
earlier year. If you repaid more than the gross benefits you received
in 2000, see Repayments More Than Gross Benefits, later.
Your gross benefits are shown in box 3 of Form SSA-1099 or
Form RRB-1099. Your repayments are shown in box 4. The amount in
box 5 shows your net benefits for 2000 (box 3 minus box 4). Use the
amount in box 5 to figure whether any of your benefits are taxable.
Example.
In 1999, you received $3,000 in social security benefits, and in
2000 you received $2,700. In March 2000, SSA notified you that you
should have received only $2,500 in benefits in 1999. During 2000, you
repaid $500 to SSA. The Form SSA-1099 you received for 2000
shows $2,700 in box 3 (gross amount) and $500 in box 4 (repayment).
The amount in box 5 shows your net benefits of $2,200 ($2,700 minus
$500).
Tax withholding and estimated tax.
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. You can choose withholding at 7%, 15%, 28%, or 31% of
your total benefit payment.
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, get Publication 505
or the instructions
for Form 1040-ES.
Nonresident aliens of the United States.
A nonresident alien is an individual who is neither a citizen or
resident of the United States. If you are a nonresident alien, the
rules discussed in this publication do not apply to you. Instead, 85%
of your benefits are taxed at a 30% rate, unless exempt (or subject to
a lower rate) by treaty. You will receive a Form SSA-1042S or
Form RRB-1042S showing the amount of your benefits. These forms
will also show the tax rate and the amount of tax withheld from your
benefits.
Under tax treaties with the following countries, residents of these
countries are exempt from U.S. tax on their benefits.
- Canada.
- Egypt.
- Germany.
- Ireland.
- Israel.
- Italy.
- Japan.
- Romania.
- The United Kingdom.
Under a treaty with India, benefits paid to individuals who are
both residents and nationals of India are exempt from U.S. tax if the
benefits are for services performed for the United States, its
subdivisions, or local authorities.
If you are a resident of Switzerland, 85% of your benefits are
taxed at a 15% rate.
For more information, get Publication 519,
U.S. Tax Guide for
Aliens.
Exemption from withholding.
If your social security benefits are exempt from tax because you
are a resident of one of the treaty countries listed, you can claim an
exemption from withholding by writing to the SSA.
If your railroad retirement benefits are exempt from tax because
you are a resident of one of the treaty countries listed, you can
claim an exemption from withholding by filing Form RRB-1001 with
the RRB. Contact the RRB to get this form.
Previous| First | Next
Publication Index | IRS-Forms Main | Home
|