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Income Taxes

• Tier I benefits equivalent to social security benefits may be subject to Federal income tax
  • Depends on amount of certain other income
• Tier I benefits exceeding social security levels, as well as tier II benefits, vested dual benefits and supplemental annuities are subject to Federal income tax
  • Treated like private pensions

Notes:

• Beneficiaries can choose to have taxes withheld (or not).
• Additional information on the tax treatment of railroad retirement benefits can be found in IRS Publication 525, Taxable and Nontaxable Income, Publication 575, Pension and Annuity Income, Publication 915, Social Security and Equivalent Railroad Retirement Benefits, and Publication 939, General Rule for Pensions and Annuities.
• Railroad retirement benefits are not subject to State or local income tax.
• The Board issues tax statements each January and notifies the Internal Revenue Service and annuitant of amounts paid and withheld.