Social Security: Tier 1 Benefits, Including and Equivalent Railroad Retirement Benefits


What are Social Security Benefits?

railroad social security benefitsSocial security benefits are benefits received from the U.S. government for those who have paid a certain amount of social security taxes on their work and earnings and are within a specific age or status. Taxable social security benefits include monthly:

  • Retirement benefits
  • Survivor benefits
  • Disability benefits (SSDI)

What Are Railroad Retirement Benefits?

Railroad retirement benefits include basic retirement, or Tier 1 benefits, and additional retirement, or Tier 2 benefits. Tier 1 benefits include social security equivalent benefits (SSEBs). These are benefits a railroad employee or beneficiary would have received under the Social Security system. The SSEB portion of Tier 1 benefits are treated the same way as social security benefits for tax purposes.

What Tax Forms Correspond with Social Security Benefits? The Answer: Tax Form SSA-1099 (or Tax Form RRB-1099 for SSEB)

If you receive these benefits during the year, you’ll get a Form SSA-1099 or Form RRB-1099. These forms show the total payments you received within a tax year.

Box 5 of each form includes the net benefit amount that allows you to figure the taxable portion.

Taxable and Nontaxable Benefits for Social Security or SSEB Tier 1

You might only have social security or the SSEB portion of Tier 1 railroad retirement benefits as your income for 2020. If this is true, then:

  • Your benefits usually aren’t taxable.
  • You probably don’t have to file a return.

If you have other income besides your benefits, up to 85% of your social security or SSEB payments can be taxed. You might have to file a return even if none of your benefits are taxable. To figure out if any of your benefits can be taxed, compare the base amount for your filing status with the total of:

  • Half of your benefits
  • All your other income, including tax-exempt interest

These are the base amounts for each filing status.

  • Up to 50% of your benefits will usually be taxable. However, up to 85% of your benefits can be taxable if either of these situations applies to you:
  • The total of half of your benefits and all your other income is more than $34,000 — or $44,000 if married filing jointly.
  • You’re married filing separately and lived with your spouse at any time during the tax year.

More Help with Social Security and SSEB Income

Navigating your social security and railroad retirement income tax forms can be a challenge. For more tax help, find an H&R Block tax office.

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