A nonresident alien is an individual who is neither a citizen nor a resident of the United States. As prescribed by the Internal Revenue Code, nonresident aliens are subject to a mandatory tax withholding rate of 30% on 85% of the SSEB amount and 30% of the NSSEB and Tier II amounts.
The United States has a number of tax treaties with foreign countries which may result in reduced tax withholding or, in some instances, no tax withholding for citizens or residents of those foreign countries. In order to take advantage of a tax treaty, you must claim an exemption based on a tax treaty in effect between the United States and your country of legal residence. Such a claim must be renewed every three years. Form RRB-1001, "Nonresident Questionnaire", is what a nonresident beneficiary should file in order to furnish citizenship, residence, and tax treaty claim exemption information to the RRB. If Form RRB-1001 is not filed or received, any nonresident beneficiary is assumed to be a nonresident alien and the mandatory tax withholding rate prescribed by the Internal Revenue Code is applied to the railroad retirement annuity.
Therefore, we encourage our beneficiaries to file proof of citizenship and/or a Form RRB-1001 before moving to a foreign country in order to avoid the mandatory nonresident alien tax withholding rate.
Contact an office of the RRB, an American Consulate, or an American Embassy if you need help completing Form RRB-1001, if you need to submit proof of your legal residence or citizenship.