Table of Contents
This chapter explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits. It explains the following topics.
-
How to figure whether your benefits are taxable.
-
How to use the social security benefits worksheet (with examples).
-
How to report your taxable benefits.
-
How to treat repayments that are more than the benefits you received during the year.
Social security benefits include monthly retirement, 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 2008, 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, Statement for Nonresident Alien Recipients of: Payments by the Railroad Retirement Board, if you are a nonresident alien). These forms show the amounts received and repaid, and taxes withheld for the year. You may receive more than one of these forms for the same year. You should add the amounts shown on all forms you receive for the year to determine the “total” amounts received and repaid, and taxes withheld for that year. See the Appendix at the end of Publication 915 for more information.
Note.
When the term “benefits” is used in this chapter, it applies to both social security benefits and the SSEB portion of tier 1 railroad retirement benefits.
-
Non-social security equivalent benefit (NSSEB) portion of tier 1 benefits.
-
Tier 2 benefits.
-
Vested dual benefits.
-
Supplemental annuity benefits.
Publication
-
575 Pension and Annuity Income
-
590 Individual Retirement Arrangements (IRAs)
-
915 Social Security and Equivalent Railroad Retirement Benefits
Forms (and Instructions)
-
1040-ES Estimated Tax for Individuals
-
W-4V Voluntary Withholding Request
To find out whether any of your benefits may be taxable, compare the base amount for your filing status with the total of:
-
One-half of your benefits, plus
-
All your other income, including tax-exempt interest.
When making this comparison, do not reduce your other 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 by bona fide residents of American Samoa or Puerto Rico.
-
$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 2008,
-
$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 2008.
Worksheet 11-1. A Quick Way To Check if Your Benefits May be Taxable | |||
---|---|---|---|
A. | Enter 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 2008, for 2008 and earlier years. (If you received more than one form, combine the amounts from box 5 and enter 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. | Enter your taxable pensions, wages, interest, dividends, and other taxable income | C. | |
D. | Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) | D. | |
E. | Add lines B, C, and D | 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 need to complete Worksheet 1 in Publication 915 (or the Social Security Benefits Worksheet in your tax form instruction booklet). If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable, later, under How To Report Your Benefits. |
Example.
You and your spouse (both over 65) are filing a joint return for 2008 and you both received social security benefits during the year. In January 2009, you received a Form SSA-1099 showing net benefits of $7,500 in box 5. Your spouse received a Form SSA-1099 showing net benefits of $3,500 in box 5. You also received a taxable pension of $20,000 and interest income of $500. You did not have any tax-exempt interest income. Your benefits are not taxable for 2008 because your income, as figured in Worksheet 11-1 on the next page, is not more than your base amount ($32,000) for married filing jointly.
Even though none of your benefits are taxable, you must file a return for 2008 because your taxable gross income ($20,500) exceeds the minimum filing requirement amount for your filing status.
Filled-in Worksheet 11-1. A Quick Way To Check if Your Benefits May be Taxable | |||
---|---|---|---|
A. | Enter 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 2008, for 2008 and earlier years. (If you received more than one form, combine the amounts from box 5 and enter the total.) | A. | $ 11,000 |
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. | 5,500 |
C. | Enter your taxable pensions, wages, interest, dividends, and other taxable income | C. | 20,500 |
D. | Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) | D. | -0- |
E. | Add lines B, C, and D | E. | $26,000 |
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 in Publication 915 (or the Social Security Benefits Worksheet in your tax form instruction booklet). If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable, later, under How To Report Your Benefits. |
If part of your benefits are taxable, you must use Form 1040 or Form 1040A. You cannot use Form 1040EZ.
If part of your benefits are taxable, how much is taxable depends on the total amount of your benefits and other income. Generally, the higher that total amount, the greater the taxable part of your benefits.
-
The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly).
-
You are married filing separately and lived with your spouse at any time during 2008.
-
You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse is covered by a retirement plan at work. In this situation, you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable benefits.
-
Situation (1) does not apply and you take an exclusion for interest from qualified U.S. savings bonds (Form 8815), for adoption benefits (Form 8839), for foreign earned income or housing (Form 2555 or Form 2555-EZ), or for income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. In this situation, you must use Worksheet 1 in Publication 915 to figure your taxable benefits.
-
You received a lump-sum payment for an earlier year. In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in Publication 915. See Lump-sum election below.
The following are a few examples you can use as a guide to figure the taxable part of your benefits.
Example 1.
George White is single and files Form 1040 for 2008. He received the following income in 2008:
Fully taxable pension | $18,600 |
Wages from part-time job | 9,400 |
Taxable interest income | 990 |
Total | $28,990 |
George also received social security benefits during 2008. The Form SSA-1099 he received in January 2009 shows $5,980 in box 5. To figure his taxable benefits, George completes the worksheet shown here.
Worksheet 1. Figuring Your Taxable Benefits
1. | Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a | $5,980 |
2. | Enter one-half of line 1 | 2,990 |
3. | Enter the total of the amounts from: | |
Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. | ||
Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 | 28,990 | |
4. | Enter the amount, if any, from Form 1040 or 1040A, line 8b | -0- |
5. | Form 1040 filers: Enter the total of any exclusions/adjustments for: | |
• Qualified U.S. savings bond interest (Form 8815, line 14), |
||
• Adoption benefits (Form 8839, line 30), |
||
• Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and |
||
• Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico |
||
Form 1040A filers: Enter the total of any exclusions for qualified U.S. savings bond interest (Form 8815, line 14) or for adoption benefits (Form 8839, line 30). | -0- | |
6. | Add lines 2, 3, 4, and 5 | 31,980 |
7. | Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. | |
Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 | -0- | |
8. | Is the amount on line 7 less than the amount on line 6? | |
No.
![]() |
||
Yes.Subtract line 7 from line 6 | 31,980 | |
9. | If you are:
|
25,000 |
Note. If you are married filing separately and you lived with your spouse at any time in 2008, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then go to line 18. | ||
10. | Is the amount on line 9 less than the amount on line 8? | |
No.
![]() |
||
Yes.Subtract line 9 from line 8 | 6,980 | |
11. | Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2008 | 9,000 |
12. | Subtract line 11 from line 10. If zero or less, enter -0- | -0- |
13. | Enter the smaller of line 10 or line 11 | 6,980 |
14. | Enter one-half of line 13 | 3,490 |
15. | Enter the smaller of line 2 or line 14 | 2,990 |
16. | Multiply line 12 by 85% (.85). If line 12 is zero, enter -0- | -0- |
17. | Add lines 15 and 16 | 2,990 |
18. | Multiply line 1 by 85% (.85) | 5,083 |
19. | Taxable benefits. Enter the smaller of line 17 or line 18. Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b | $2,990 |
The amount on line 19 of George's worksheet shows that $2,990 of his social security benefits is taxable. On line 20a of his Form 1040, George enters his net benefits of $5,980. On line 20b, he enters his taxable benefits of $2,990.
Example 2.
Ray and Alice Hopkins file a joint return on Form 1040A for 2008. Ray is retired and received a fully taxable pension of $15,500. He also received social security benefits, and his Form SSA-1099 for 2008 shows net benefits of $5,600 in box 5. Alice worked during the year and had wages of $14,000. She made a deductible payment to her IRA account of $1,000. Ray and Alice have two savings accounts with a total of $250 in taxable interest income. They complete Worksheet 1 and find that none of Ray's social security benefits are taxable. On line 3 of the worksheet, they enter $29,750 ($15,500 + $14,000 + $250). On Form 1040A, they enter $5,600 on line 14a and -0- on line 14b.
Worksheet 1. Figuring Your Taxable Benefits
1. | Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a | $5,600 |
2. | Enter one-half of line 1 | 2,800 |
3. | Enter the total of the amounts from: | |
Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. | ||
Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 | 29,750 | |
4. | Enter the amount, if any, from Form 1040 or 1040A, line 8b | -0- |
5. | Form 1040 filers: Enter the total of any exclusions/adjustments for: | |
• Qualified U.S. savings bond interest (Form 8815, line 14), |
||
• Adoption benefits (Form 8839, line 30), |
||
• Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and |
||
• Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico |
||
Form 1040A filers: Enter the total of any exclusion for qualified U.S. savings bond interest (Form 8815, line 14) or for adoption benefits (Form 8839, line 30) | -0- | |
6. | Add lines 2, 3, 4, and 5 | 32,550 |
7. | Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. | |
Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 | 1,000 | |
8. | Is the amount on line 7 less than the amount on line 6? | |
No.
![]() |
||
Yes.Subtract line 7 from line 6 | 31,550 | |
9. | If you are:
|
32,000 |
Note. If you are married filing separately and you lived with your spouse at any time in 2008, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then go to line 18. | ||
10. | Is the amount on line 9 less than the amount on line 8? | |
No.
![]() |
||
Yes.Subtract line 9 from line 8 | ||
11. | Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2008 | |
12. | Subtract line 11 from line 10. If zero or less, enter -0- | |
13. | Enter the smaller of line 10 or line 11 | |
14. | Enter one-half of line 13 | |
15. | Enter the smaller of line 2 or line 14 | |
16. | Multiply line 12 by 85% (.85). If line 12 is zero, enter -0- | |
17. | Add lines 15 and 16 | |
18. | Multiply line 1 by 85% (.85) | |
19. | Taxable benefits. Enter the smaller of line 17 or line 18. Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b |
Example 3.
Joe and Betty Johnson file a joint return on Form 1040 for 2008. Joe is a retired railroad worker and in 2008 received the social security equivalent benefit (SSEB) portion of tier 1 railroad retirement benefits. Joe's Form RRB-1099 shows $10,000 in box 5. Betty is a retired government worker and receives a fully taxable pension of $38,000. They had $2,300 in taxable interest income plus interest of $200 on a qualified U.S. savings bond. The savings bond interest qualified for the exclusion. They figure their taxable benefits by completing Worksheet 1. On line 3 of the worksheet, they enter $40,300 ($38,000 + $2,300).
Worksheet 1. Figuring Your Taxable Benefits
1. | Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a | $10,000 |
2. | Enter one-half of line 1 | 5,000 |
3. | Enter the total of the amounts from: | |
Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. | ||
Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 | 40,300 | |
4. | Enter the amount, if any, from Form 1040 or 1040A, line 8b | -0- |
5. | Form 1040 filers: Enter the total of any exclusions/adjustments for: | |
• Qualified U.S. savings bond interest (Form 8815, line 14), |
||
• Adoption benefits (Form 8839, line 30), |
||
• Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and |
||
• Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico |
||
Form 1040A filers: Enter the total of any exclusions for qualified U.S. savings bond interest (Form 8815, line 14) or for adoption benefits (Form 8839, line 30) | 200 | |
6. | Add lines 2, 3, 4, and 5 | 45,500 |
7. | Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. | |
Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 | -0- | |
8. | Is the amount on line 7 less than the amount on line 6? | |
No.
![]() |
||
Yes.Subtract line 7 from line 6 | 45,500 | |
9. | If you are:
|
32,000 |
Note. If you are married filing separately and you lived with your spouse at any time in 2008, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then go to line 18. | ||
10. | Is the amount on line 9 less than the amount on line 8? | |
No.
![]() |
||
Yes.Subtract line 9 from line 8 | 13,500 | |
11. | Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2008 | 12,000 |
12. | Subtract line 11 from line 10. If zero or less, enter -0- | 1,500 |
13. | Enter the smaller of line 10 or line 11 | 12,000 |
14. | Enter one-half of line 13 | 6,000 |
15. | Enter the smaller of line 2 or line 14 | 5,000 |
16. | Multiply line 12 by 85% (.85). If line 12 is zero, enter -0- | 1,275 |
17. | Add lines 15 and 16 | 6,275 |
18. | Multiply line 1 by 85% (.85) | 8,500 |
19. | Taxable benefits. Enter the smaller of line 17 or line 18. Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b | $6,275 |
More than 50% of Joe's net benefits are taxable because the income on line 8 of the worksheet ($45,500) is more than $44,000. Joe and Betty enter $10,000 on Form 1040, line 20a, and $6,275 on Form 1040, line 20b.
You may be entitled to deduct certain amounts related to the benefits you receive.
In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than the gross benefits (box 3) you received. If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none of your benefits will be taxable. Do not use a worksheet in this case. If you receive more than one form, a negative figure in box 5 of one form is used to offset a positive figure in box 5 of another form for that same year.
If you have any questions about this negative figure, contact your local SSA office or your local RRB field office.
Example.
John and Mary file a joint return for 2008. John received Form SSA-1099 showing $3,000 in box 5. Mary also received Form SSA-1099 and the amount in box 5 was ($500). John and Mary will use $2,500 ($3,000 minus $500) as the amount of their net benefits when figuring if any of their combined benefits are taxable.
-
Figure your tax for 2008 with the itemized deduction included on Schedule A, line 28.
-
Figure your tax for 2008 in the following steps.
-
Figure the tax without the itemized deduction included on Schedule A, line 28.
-
For each year after 1983 for which part of the negative figure represents a repayment of benefits, refigure your taxable benefits as if your total benefits for the year were reduced by that part of the negative figure. Then refigure the tax for that year.
-
Subtract the total of the refigured tax amounts in (b) from the total of your actual tax amounts.
-
Subtract the result in (c) from the result in (a).
-
More Online Publications |