Regular railroad retirement annuities consisting of tier I, tier II, and vested dual benefit components, have been subject to United States Federal income tax since 1984. Supplemental annuities have been subject to Federal income tax since 1966.
Taxable as a Social Security Benefit
The portion of the tier I component of a railroad retirement annuity that is equivalent to what the Social Security Administration would pay if railroad service were covered under the Social Security Act is treated the same as a Social Security benefit for Federal income tax purposes. Special guaranty amounts paid to some railroad retirement beneficiaries are also treated like Social Security benefits for Federal income tax purposes. The portions of a railroad retirement annuity that are taxable the same as Social Security benefits are generally referred to as social security equivalent benefits (SSEB).
To find out whether any of your social security equivalent benefits are taxable, you must compare the base amount for your filing status with the total of:
- All your taxable income, including taxable pensions, wages, interest, and dividends,
- Your tax-exempt interest income, and
- One-half of your social security equivalent benefits.
Your base amount is:
- $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 at all times during the year,
- $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 the year.
If your taxable income and tax-exempt interest income, plus one-half of the amount of your social security equivalent benefits, is more than your base amount, some of your benefits may be taxable.
You can choose to have taxes withheld from the SSEB portion of your railroad retirement annuity by filing IRS Form W-4V. File the completed form at any Railroad Retirement Board (RRB) office. Forms W-4V are available at any IRS offices. The RRB will not withhold taxes from the SSEB portion of your annuity unless you file IRS Form W-4V.
Taxes on the Non-Social Security Equivalent Benefit Portion of tier I, tier II benefits, vested dual benefits, and supplemental annuity payments
The non-social security equivalent benefit (NSSEB) portion of tier 1 benefits, tier 2 benefits, vested dual benefits, and supplemental annuity payments are considered taxable income regardless of the amount of any other income you may have. These portions of your annuity are subject to Federal income tax withholding. If you file Form RRB W-4P to have taxes withheld based on your marital status and tax withholding allowances, we will withhold taxes from these portions of your annuity. We will not withhold taxes from the SSEB portion of your annuity unless you also file IRS Form W-4V.
Railroad retirement annuities are not taxable by states in accordance with section 14 of the Railroad Retirement Act (45 U.S.C. § 231m). The RRB will not withhold state income taxes from railroad retirement payments.
Purpose of Form RRB W- 4P
Form RRB W-4P is used by United States citizens or legal residents for U.S. tax purposes. Complete Form RRB W-4P to request:
- no Federal taxes be withheld from your railroad retirement payments,
- Federal taxes be withheld based on the marital status and the number of allowances you want to claim, or
- an additional amount be withheld from your railroad retirement payments.
If you live outside the 50 states or Washington D.C., Guam, and the Northern Mariana Islands, see the Note in the following section.
You are not required to file a Form RRB W- 4P. However, if you do not file and your combined taxable NSSEB, tier II, vested dual benefit, and supplemental annuity components of your monthly railroad retirement annuity exceed $2047.00 we will automatically withhold taxes as if you were married and claiming three allowances.
File Form RRB W- 4P no earlier than 6 months before the date your annuity is subject to tax withholding. We will adjust your withholding according to your RRB W- 4P request. Your request remains in effect until you change or cancel it with a new Form RRB W- 4P. You may file a new Form RRB W- 4P at any time. The adjustment to your payment will serve as notification that your request is in effect.
How to Complete Form RRB W- 4P
Complete items 1 through 6 and item 11. If you answer "Yes" to item 6, also complete items 7 through 10, as appropriate.
Item 1, RRB Claim Number, and Item 3, Your Social Security Number:
Be sure to provide your RRB Claim Number and your Social Security Number.
Item 6, Withholding or No Withholding Election:
Answer "Yes" if you want Federal income tax withheld from your railroad retirement payments.
Answer "NO" if you do not want Federal income tax withheld from your railroad retirement payments. If you answer "NO" to item 6, remember that having no tax withheld from your annuity payments does not reduce the amount of the taxes you may owe. There are penalties for not paying enough tax during the year, either by tax withholding or by estimated tax payments. Internal Revenue Service Publication 505, Tax Withholding and Estimated Tax, explains estimated tax payments and penalties in detail.
We may not accept a "No" tax withholding election on Form RRB W-4P if:
- The individuals' United States social security number is not provided on the form or
- The individual resides outside the 50 United States, Washington D.C., Guam, and the Commonwealth of the Northern Mariana Islands. If the "No" box is completed, the RRB will withhold taxes as if married and claiming three allowances.
Item 7. Marital Status:
Enter your marital status for tax withholding purposes.
Item 8. Withholding Allowance:
Enter the number of withholding allowances you claimed in item 8. Use the worksheets on pages 5 and 6 to figure the number of your allowances. Generally, the more allowances you claim, the less tax is withheld. If you have more than one pension or annuity or if your spouse also has a pension or annuity, you may claim all of your allowances on one Form RRB W-4P or you may claim some on each Form RRB W-4P, but you may NOT claim the same allowances more than once. Your withholding will usually be more accurate if you claim all allowances on the Form RRB W-4P for the largest payment and claim zero on all other Forms RRB W-4P.
The worksheets are only guides. They will give only approximate withholding allowance information.
Item 9. Additional Dollar Amount withheld from Annuity payments:
Answer "Yes" if you want an additional dollar amount withheld from your monthly benefits. This additional amount, which is computed on line 1 of the Multiple Pensions/More Than One Income Worksheet on page 6 will be added to any tax withholding amount computed based on the marital status and number of allowances you have entered in items 7 and 8 of Form RRB W- 4P.
If you do not want an additional dollar amount withheld from each payment, fill in the "NO" box and go to item 11.
Item 10. Additional Dollar Withholding Amount:
Enter the additional dollar amount you want withheld from each annuity payment. This includes all accrual payments regardless of the amount of the accrual. Use the amount from line 1 of the Multiple Pensions/More Than One Income Worksheet on page 6. Show whole dollars. Do not show cents. A maximum amount of $998 is allowed in this field.
Item 11 Signature and Date,
The form must be signed to be valid. It should be signed and dated by the person who is responsible for signing any U.S. income tax return filed on the social security number entered in item 3.
Each payment you receive will be taxed based on what you claim on your RRB W- 4P. This includes accrual payments. If what you claimed on your RRB W-4P along with item 10 (additional amount) is more than the accrual payment we will also withhold the entire accrual payment. Even, if the tax withholding amount calculated is more than the accrual payment, we cannot withhold any portion of your SSEB, unless IRS Form W- 4V is filed with the RRB.
Statement of Annuity Payments and Taxes Withheld
No later than January 31 following the tax year, you will receive a statement showing the total annuity payments made to you during the preceding calendar year. This statement also shows the total amount of any taxes withheld from your payments. Use this statement to complete any income tax return you must file with the Internal Revenue Service for the tax year.
You may request a refund of any excess taxes withheld by filing an income tax return with the Internal Revenue Service after the end of the tax year. If you decide that too much tax is being withheld from your railroad retirement benefits, you can request a change in your withholding by filing a new Form RRB W- 4P and/or Form W-4V.
For Further Information
Contact the nearest office of the Internal Revenue Service if you need more information about taxation, tax withholding, your personal tax obligations, or if you need help completing Form RRB W- 4P. Contact the nearest office of the RRB for any information you need about your railroad retirement payments. The RRB's nationwide toll-free telephone number is 1-877-772-5772.
Nondiscrimination on the Basis of Disability
Under Section 504 of the Rehabilitation Act of 1973 and RRB regulations, no qualified person may be discriminated against on the basis of disibility. RRB programs and activities must be accessible to all qualified applicants and beneficiaries including those who are vision or hearing-impaired. Disabled persons needing assistance should contact the nearest RRB office. Complaints of alleged discrimination by the RRB on the basis of disability must be filed within 90 days in writing with the
Director of Administration
Railroad Retirement Board
844 North Rush Street,
Chicago, Illinois 60611-1275
Questions about individual rights under this regulation may be directed to the RRB's Director of Equal Opportunity.
Paperwork Reduction and Privacy Act Notices
The information requested on Form RRB W-4P is required to carry out the Internal Revenue laws of the United States. The Internal Revenue Code requires this information under section 3405(e) and 6109 of their regulations. Failure to provide this information may result in inaccurate withholding on your payment(s). Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation, and to cities, states and the District of Columbia for use in administering their tax laws. You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103.
The time needed to complete this form will vary depending on individual circumstances. The estimated average time is:
|Learning about the Law or the form
|Preparing and sending the form
If you have suggestions for making Form RRB W-4P simpler, send them to the address shown below.
Associate Chief of Information Officer of Policy and Compliance
U.S. Railroad Retirement Board
844 North Rush Street
Chicago, IL 60611-1275