Appendix

This appendix explains items shown on Form SSA-1099 and Form RRB-1099. Forms SSA-1042S and RRB-1042S, for nonresident aliens, contain the same items plus a few additional ones. These are also explained.

The illustrated versions of Forms SSA-1099, SSA-1042S, RRB-1099, and RRB-1042S in this appendix are proof copies of the forms as they appeared when this publication went to print. The information on the illustrated forms should be essentially the same as the information on the form you received from either the SSA or the RRB. You should, however, compare the form you received with the one shown in this publication to note any differences.

Form SSA-1099

Every person who received social security benefits will receive a Form SSA-1099. If you receive benefits on more than one social security record, you may get more than one Form SSA-1099. IRS Notice 703 will be enclosed with this form. It contains a worksheet to help you figure if any of your benefits are taxable. Do not mail Notice 703 to either the IRS or the SSA.

Box 1 - Name

The name shown in this box refers to the person for whom the social security benefits shown on the statement were paid. If you received benefits for yourself, your name will be shown.

Box 2 - Beneficiary's Social Security Number

This is the U.S. social security number, if known, of the person named in box 1.

In all your correspondence with the SSA, be sure to use the claim number shown in box 8.

Box 3 - Benefits Paid in 2002

The figure shown in this box is the total benefits paid in 2002 to you (the person named in box 1). This figure may not agree with the amounts you actually received because adjustments may have been made to your benefits before you received them. An asterisk (*) after the figure shown in this box means that it includes benefits received in 2002 for one or more earlier years.

Description of Amount in Box 3

This part of the form describes the items included in the amount shown in box 3. It lists the benefits paid and any adjustments made. Only the adjustments that apply to you will be shown. If no adjustments were made to the benefits paid, the word none will be shown.

Paid by check or direct deposit.   This is the amount you actually received or that was deposited directly into your account in a financial institution in 2002.

Additions.   The following adjustment items may have been deducted from your benefits in 2002. If amounts appear on your Form SSA-1099 next to these items, they will be added to the amount shown in Paid by check or direct deposit.

Do not reduce the amount of net social security benefits (box 5) by any of the items listed below. Use the amount in box 5 to figure taxable social security.

Medicare premiums deducted from your benefit.   If you have Medicare premiums deducted from your benefits, this is the amount withheld during 2002. The basic monthly premium in 2002 was $54, but it could be higher if you enrolled after you were first eligible or if you had a break in coverage.

Workers' compensation offset.   If you are disabled and receive workers' compensation or Part C Black Lung payments, your benefits are subject to a payment limit. An entry will be shown here if your benefits were reduced to stay within this limit. An entry will also be shown here if your benefits were reduced because the person on whose social security record you were paid is disabled and also received workers' compensation or Part C Black Lung payments.

Paid to another family member.   This entry shows total payments withheld from your benefits if you are required to pay child support or alimony.

Deductions for work or other adjustments.   Amounts withheld from your benefits because of work or to recover an overpayment of any type of benefit are benefits paid to you and will be shown here. They also may be treated as benefits repaid to SSA and included in the amount in box 4.

Attorney fees and/or SSI offset.   If you had an attorney handle your social security claim, the figure shown here is the fee withheld from your benefits and paid directly to your attorney.

Part of a person's supplemental security income (SSI) payments is withheld if that person also receives social security benefits. When a person applies for both social security benefits and SSI payments, the SSI payments may sometimes be made before a decision on the person's social security claim is made. After the person is found eligible for social security benefits, the amount that should have been withheld from the SSI payments is deducted from the social security benefits. This amount is considered part of your social security benefits. An entry here means that an amount was deducted from your social security benefits to recover part of your SSI payments.

Voluntary federal income tax withheld.   This shows the total amount of federal income tax withheld from your benefits. Include this amount on your income tax return as tax withheld.

Benefit payment offset - Treasury.   Part of your Title II Social Security benefit may be withheld on behalf of the Treasury Department to recover debts you owe to other federal agencies.

Total additions.   The figure shown here is the sum of the amounts paid by check or direct deposit plus all the additions described previously.

Subtractions.   The following adjustment items may have been included in the payments you received in 2002. If amounts appear on your Form SSA-1099 next to these items, they will be subtracted from the figure in Total Additions.

Payments for months before December 1983.   The figure shown here is the amount of benefits you received in 2002 that was for months before December 1983. These benefits are not taxable no matter when they are paid.

Lump-sum death payment.   The lump-sum death payment is not subject to tax. An entry here means you received this kind of payment in 2002.

Amounts refunded to you.   The amount shown here may include Medicare premiums you paid in excess of the amount actually due. It also may include amounts withheld in 2001 to pay your attorney in excess of the fee actually paid.

Nontaxable payments.   This entry shows nontaxable payments such as lump-sum death payments.

Amounts paid to you for other family members.   This entry shows benefit payments paid to you on behalf of a minor child or disabled adult.

Total subtractions.   The figure shown here is the sum of all the subtractions described previously.

Benefits for 2002.   The amount shown here is the result of subtracting the figure in Total subtractions from the figure in Total additions. This amount is the same as that shown in box 3.

*Box 3 includes $     paid in 2002 for 2001, 2000, and other tax years.   The figure shown here is the amount of any lump-sum benefit payment received in 2002 that is for an earlier year after 1983. See Lump-Sum Election, earlier, for a full discussion on how these payments are handled.

Box 4 - Benefits Repaid to SSA in 2002

The figure shown in this box is the total amount of benefits you repaid to SSA in 2002.

Description of Amount in Box 4

This part of the form describes the items included in the amount shown in box 4. It lists the amount of benefit checks you returned to SSA and any adjustments for other types of repayments. The amounts listed include all amounts repaid in 2002, no matter when the benefits were received. Only the repayments that apply to you will be shown. If you did not make any repayments, the word none will be shown.

Checks returned to SSA.   If any of your benefit checks were returned to SSA, the total is shown here.

Deductions for work or other adjustments.   If any amounts were withheld from your benefits because of work or to recover an overpayment of retirement, survivors, or disability benefits, the total will be shown here. This may also be shown as Deductions for work or other adjustments under Description of Amount in Box 3.

Other repayments.   This is the amount you repaid to SSA by direct remittance.

Benefits repaid to SSA in 2002.   The amount shown here is the sum of all your repayments. This total is the same as that shown in box 4.

Box 5 - Net Benefits for 2002 (Box 3 minus Box 4)

The figure in this box is the net benefits paid to you for the year. It is the result of subtracting the figure in box 4 from the figure in box 3. Enter this amount on line A of IRS Notice 703, or on line 1 of Worksheet 1, shown earlier, or on the worksheet in either the Form 1040 or 1040A instruction package.

If parentheses are around the figure in box 5, it means that the figure in box 4 is larger than the figure in box 3. This is a negative figure and means you repaid more money than you received in 2002. If you have any questions about this negative figure, contact your local SSA office. For more information, see Repayments More Than Gross Benefits, earlier.

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Box 6 - Voluntary Federal Income Tax Withheld

This shows the total amount of federal income tax withheld from your benefits. Include this amount on your income tax return as tax withheld.

Form SSA-1042S (Nonresident Aliens)

This form is for nonresident aliens. It contains the following four additional items that do not appear on Form SSA-1099.

Box 6 - Rate of Tax

This is the rate at which tax was withheld from 85% of your benefits. If tax was withheld at more than one rate during the year, the percentage shown will be the tax rate in December 2002. The tax rate for most nonresident aliens is 30%. If you are a resident of Switzerland, 85% of your benefits are taxed at a 15% rate. The figure 0 will appear in this box if you were not taxed in December or if you were exempt under a tax treaty. Benefits received by residents of Canada, Egypt, Germany, Ireland, Israel, Italy, Japan, Romania, and the United Kingdom are exempt from U.S. tax.

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 government authorities. See Publication 519 for more information on nonresident aliens.

Box 7 - Amount of Tax Withheld

This is the amount of tax taken out of your social security checks. Tax is withheld for any month in which you were a nonresident alien (unless you were exempt under a tax treaty).

Box 8 - Amount of Tax Refunded

An amount in this block shows any tax SSA refunded to you. When SSA withholds tax from your checks by mistake, they try to return it to you during the same calendar year. If SSA is unable to send the refund to you before the year ends, you must file a federal income tax return to get a refund of this tax.

Box 9 - Net Tax Withheld During 2002

The figure in this box is the result of subtracting the figure in box 8 from the figure in box 7. This is the net amount of tax withheld from your benefits.

Form RRB-1099

This section explains the items shown on Form RRB-1099. Form RRB-1099 is issued to citizens and residents of the United States. If you received, repaid, or had tax withheld from the social security equivalent benefit (SSEB) portion of tier 1 railroad retirement benefits or special guaranty benefits during 2002, you will receive Form RRB-1099.

If you received, repaid, or had tax withheld from any non-social security equivalent benefit (NSSEB) portion of tier 1, tier 2, vested dual benefits or supplemental annuity benefits during 2002, you will receive Form RRB-1099-R, Annuities or Pensions by the Railroad Retirement Board. For more information concerning Form RRB-1099-R, see Publication 575.

Each beneficiary will receive his or her own Form RRB-1099. If you receive benefits on more than one railroad retirement record, you may get more than one Form RRB-1099.

Box 1 - Claim Number and Payee Code

Your RRB claim number is a six- or nine-digit number preceded by an alphabetical prefix and is the number under which the SSEB portion of tier 1 benefits was paid. Your payee code is the number following your claim number and is used by the RRB to identify you under your claim number. In all your contacts with the RRB, be sure to use the claim number and payee code shown in this box.

Box 2 - Recipient's Identification Number

This is the U.S. social security number (SSN), individual taxpayer identification number (ITIN), or employer identification number (EIN), if known, for the person or estate listed as the recipient.

Box 3 - Gross Social Security Equivalent Benefit Portion of Tier 1 Paid in 2002

The figure shown in this box is the gross SSEB portion of tier 1 benefits or special guaranty benefits paid to you in 2002. It is the amount before any deductions were made for:

• Federal income tax withholding,
• Medicare premiums,
• Legal Process Garnishment payments,
• Legal Process Assignment payments,
• Recovery of an overpayment, including recovery of Railroad Unemployment Insurance Act benefits received while awaiting payment of your railroad retirement annuity, and
• Workers' compensation offset (explained in the description of box 6, later).

The figure in box 3 is the amount after any deductions were made for:

• Work deductions,
• Actuarial adjustment,
• Annuity waiver, and
• Legal Process Partition payments.

Social security benefits paid through the RRB are not reported on Form RRB-1099 or RRB-1042S. They are reported on Form SSA-1099 or Form SSA-1042S issued by the SSA.

Example 1.   For the period January through March 2002, you received $300 ($100 x 3 months) Railroad Unemployment Insurance. You were eligible for the SSEB portion of tier 1 benefits of $509 a month beginning January 1, 2002, but you did not receive your first payment until April 2002. The payment you received in April was for the first three months of 2002. However, because you received unemployment benefits during the same period, $300 was deducted from your initial benefit payment. Instead of receiving $1,527 ($509 x 3 months), you received $1,227 ($1,527- $300). For the months of April through November, you were paid your regular monthly SSEB portion of tier 1 benefits of $509. Box 3 of your Form RRB-1099 will show $5,599 ($509 × 11 months) as the gross SSEB portion of tier 1 benefits paid to you in 2002, even though you did not actually receive that amount. This is because box 3 shows the gross amount of your benefits before any reductions were made for the unemployment benefits paid to you.

Example 2.   You received tier 1 benefits of $600 a month for the months of December 2001 through May 2002. Your $600 monthly tier 1 benefits consist of an SSEB portion of $250 and a non-social security equivalent benefit (NSSEB) portion of $350. Beginning in June 2002, you became entitled to Medicare, and $54 a month was deducted from your benefit checks for Medicare premiums. Therefore, the tier 1 payments you received for the rest of the year were $546 ($600 - $54) a month. Box 3 of your Form RRB-1099 will show the gross SSEB portion of tier 1 benefits of $3,000 ($250 × 12 months), because it is the gross SSEB amount before deductions for your Medicare premiums. Box 11 of your Form RRB-1099 will show your Medicare premiums of $324 ($54 × 6 months) deducted from June through November 2002. The remainder of your tier 1 payments, the NSSEB portion of $4,200 ($350 × 12 months), will be shown on the Form RRB-1099-R that you will receive along with your Form RRB-1099. The $4,200 is the gross NSSEB amount before deductions for your Medicare premiums. (The Medicare Premium Total box shown on your Form RRB-1099-R will be blank since the Medicare total will be shown in box 11 of your Form RRB-1099.) For more information on Form RRB-1099-R, see Publication 575.

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Benefits paid for earlier years.   The figure in box 3 includes any lump-sum benefit payment you received in 2002 that is for an earlier year after 1983. If you received a payment for an earlier year, it will be shown in box 7, 8, or 9 (described later). See Lump-Sum Election, earlier, for information on how to treat the payment.

Box 4 - Social Security Equivalent Benefit Portion of Tier 1 Repaid to RRB in 2002

The figure shown in this box is the total SSEB portion of tier 1 benefits you repaid to the RRB in 2002. You may have repaid a benefit by returning a payment, making a cash refund, or having an amount withheld from your payments. In addition, an amount may have been withheld from your benefits to recover the SSEB overpayment incurred by someone else who is also receiving benefits under your claim number. Also, an amount may have been withheld from another benefit, such as a social security benefit, to recover an SSEB overpayment you received.

The amount in box 4 also includes any SSEB benefits you repaid in 2002 that were for 2002 or for one or more years before 2002. All tier 1 repayments for years before 1986 are treated entirely as SSEB benefits.

Example 1.   You returned to work for your last railroad employer for the months of June through August 2002. The SSEB portion of your tier 1 benefits was $450 for each of those months. Since you are not allowed to receive benefits for any month you returned to railroad service, you have to make a repayment to the RRB. You returned the benefit payment for June through August 2002. Box 4 of your Form RRB-1099 will show $1,350 ($450 x 3 months) as the SSEB portion of tier 1 benefits you repaid to the RRB.

Example 2.   From January through April 2002 you were overpaid $800 in the SSEB portion of tier 1 benefits. From May through August 2002, $200 a month was withheld from your benefit payment to fully recover the $800 overpayment. Box 4 of your Form RRB-1099 will show $800 ($200 x 4 months) as the SSEB portion of tier 1 benefits you repaid to the RRB.

Example 3.   As a retired railroad employee, you have been receiving a railroad retirement annuity, including an SSEB portion of tier 1 benefits, since 2001. You also became entitled to, and received from the SSA, a social security benefit of $300 a month beginning May 1, 2002. SSA later authorized the RRB to pay that benefit. In August 2002, the RRB began paying your social security benefit to you and reduced the SSEB portion of your monthly tier 1 benefit by $300. Social security benefits of $900 ($300 × 3 months) covering the period May through July 2002 were kept by the RRB to offset your $900 SSEB overpayment for that same period. Box 4 of your Form RRB-1099 will show $900 as the SSEB portion of tier 1 benefits you repaid to the RRB. (Note. SSA will send you Form SSA-1099, which will include the $900 in benefits paid by them for the months of May through July 2002.)

Box 5 - Net Social Security Equivalent Benefit Portion of Tier 1 Paid in 2002

The figure shown in this box is the net amount of the SSEB portion of tier 1 benefits paid to you in 2002. It is the result of subtracting the amount in box 4 from the amount in box 3. If you received more than one Form RRB-1099 for 2002, you should add the amounts in box 5 of all Forms RRB-1099 to determine your net amount of SSEB payments for 2002. Use this amount to determine if any of your benefits are taxable. See Are Any of Your Benefits Taxable, earlier.

If parentheses are around the figure in box 5, it means that the figure in box 4 is larger than the figure in box 3. This is a negative figure and means you repaid more money than you received in 2002. For more information, see Repayments More Than Gross Benefits, earlier.

Box 6 - Workers' Compensation Offset in 2002

The figure shown in this box is the amount you received in workers' compensation benefits during the year that was used to offset the full amount of your tier 1 payments. The SSEB portions of your tier 1 benefits shown in boxes 3 and 5 include amounts by which your SSEB payments were reduced for workers' compensation benefits. Your workers' compensation amount is shown in this box separately only for your information. If you did not receive workers' compensation benefits, box 6 is blank.

Example.   For 2002, your tier 1 benefit of $450 a month is reduced to $400 because of a $50-a-month workers' compensation offset. Boxes 3 and 5 of your Form RRB-1099 will show $5,400 ($450 × 12 months) as the SSEB portion of tier 1 benefits paid to you by the RRB. The $5,400 is the amount before any deductions were made for the workers' compensation offset. Box 4 will show zero because you did not make any repayments during the year. Box 6 of your form will show $600 ($50 workers' compensation × 12 months). In figuring if any of your benefits are taxable, you must use $5,400 (box 5) as the amount of the SSEB portion of tier 1 benefits paid to you.

Boxes 7 and 8 - Social Security Equivalent Benefit Portion of Tier 1 Paid for 2001 or 2000

The figure shown in each applicable box is the amount of SSEB benefits paid to you in 2002 that was for 2001 or 2000. This amount is included in the amount shown in box 3.

Box 9 - Social Security Equivalent Benefit Portion of Tier 1 Paid for Years Prior to 2000

The figure shown in this box is the amount of SSEB benefits paid to you in 2002 that was for 1999 and earlier years after 1983. This amount is included in the amount shown in box 3. Any tier 1 benefit paid for a period before 1986 is treated as SSEB.

Box 10 - Federal Income Tax Withheld

The figure shown in this box is the total amount of U.S. federal income tax withheld on your tier 1 SSEB payments. This total is based on the amount of SSEB tax withholding requested on IRS Form W-4V, Voluntary Withholding Request. Include this amount on your income tax return as tax withheld.

In some cases, a tax withholding amount may be shown in this box even though you did not request SSEB tax withholding. This may happen if you previously had taxes withheld from your pension payments (NSSEB, tier 2, and/or vested dual benefit), but the taxability of those payments has since changed. In these cases, the tax withholding amount is applied to the SSEB since that is your only taxable component.

Box 11 - Medicare Premium Total

This is for information purposes only. This is the total amount of Part B Medicare premiums deducted from your railroad retirement annuity payments shown on your Form RRB-1099 for 2002. Medicare premium refunds are not included in this total. The Medicare total is normally shown on Form RRB-1099. However, if Form RRB-1099 is not required for your 2002 taxes, then this total will be shown on Form RRB-1099-R. Medicare premiums deducted from your social security benefits, paid by a third party, or paid by direct billing will not be shown in this box.

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