Chapter 12 - Social Security & Equivalent Railroad Retirement Benefits

Are Any of Your Benefits Taxable?

This is archived information that pertains only to the 2000 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

To find out whether any of your benefits are 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.

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.

The Railroad Retirement Board (RRB) issues Form RRB-1099 and Form RRB-1042S while the Social Security Administration (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 the Appendix at the end of Publication 915 for more information on these forms.

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 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.

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.

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.

Note. If the amount on line A is zero or less, stop here; none of your benefits are taxable this year.

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 in your tax form instruction booklet) to find out if they are.

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.
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 income (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.

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).

Note. If the amount on line A is zero or less, stop here; none of your benefits are taxable this year.

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 in your tax form instruction booklet) to find out if they are.

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
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

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. 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 the 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 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.

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, Tax Withholding and Estimated Tax, or the instructions for Form 1040-ES.

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