U.S. Citizen and Resident Tax Withholding
The RRB allows citizens and legal residents of the United States to elect tax withholding on their railroad retirement annuity. A tax withholding election must be filed on Form RRB W-4P, "Withholding Certificate For Railroad Retirement Payments".
RRB annuitants can also file "IRS Form W-4V, Voluntary Withholding Request", to have taxes withheld from the SSEB portion of tier I, or from their Social Security Benefits. "Form W-4V" permits tax withholding at four set rates: 7%, 10%, 15% or 27%. "Form RRB W-4P" allows annuitants to have taxes deducted from the pension portions of the annuity: NSSEB, tier II, Vested Dual Benefits, and SUPP.
If you elect to have income taxes withheld, by using Form RRB W-4P, you may control the amount of taxes withheld from your regular monthly or accrued annuity payments by specifying your marital status and the number of withholding allowances. You may also request the RRB to withhold an additional amount or not to withhold any taxes from your annuity by using Form "RRB W-4P". If an election is made, it will remain in force until changed or revoked. If an election is not made, the RRB is required by law to withhold taxes as if you were married with three allowances. However, tax withholding would not automatically be initiated unless your taxable annuity components paid in a month exceed the minimum mandatory withholding amount. Refer to booklet TXB-25, "Tax Withholding and Railroad Retirement Payments", for the minimum mandatory withholding amount and further information on tax withholding.
NOTE: If a U.S. citizen moves or resides outside of the United States and has not filed Form RRB-1001, "Nonresident Questionnaire", claiming U.S. citizenship, taxes will be withheld at the mandatory nonresident alien tax withholding rate until Form RRB-1001 is received at the RRB. See the following section for further information.