Policy and Systems

People Eligible To Receive a Railroad Tax Refund

The railroad tax refund is paid to an employee's survivors according to the following priorities:

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Separation Allowance Tax Refund

If the employee received a separation allowance or severance payment after 1984, it is possible the payment will not produce additional service credits. If additional service is not credited, the tier II payroll taxes that were withheld from the payment, may be refunded.

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Excess Tax Refund

If the employee had railroad employment and employment covered by the Social Security Act in the same year, both railroad retirement and social security taxes may have been deducted from the employee's earnings. Excess taxes that were deducted from the employee's earnings in the years between 1950 and 1974 can be refunded by the RRB. Excess taxes that were deducted for years after 1974 must be refunded by the Internal Revenue Service.

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Definition of a Railroad Tax Refund

If the railroad taxes the RRB receives are greater than the amount which will affect the annuity amount, the employee can receive a refund of the additional railroad taxes. Generally, the additional railroad taxes will be paid when the employee begins receiving a railroad retirement benefit. If the employee dies before receiving a refund, the additional railroad taxes are payable to the employee's survivors. An application for a railroad tax refund must be filed by the second anniversary of the employee's death.

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Railroad Tax Refund

If it appears you may be entitled to a railroad tax refund, please read this part of the booklet thoroughly. It will help you understand what a railroad tax refund is and when one can be paid.

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People Eligible To Receive A Survivor Annuity Unpaid At Death

An unpaid survivor annuity is paid only to the relatives of the employee according to the following priorities:

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People Eligible To Receive A Retirement Annuity Unpaid At Death

An unpaid retirement annuity is paid according to these priorities:

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Definition Of An Annuity Unpaid At Death

An annuity unpaid at death is any annuity payments which were due a railroad retirement annuitant and, for any reason, were not paid before the annuitant died. This includes any check which was returned to the RRB because the annuitant died before cashing it. An annuity unpaid at death is taxable for Federal income tax purposes. For further information concerning the taxability of an annuity unpaid at death, refer to the booklet TB-85 Information About the Taxation of Railroad Annuities.

There are two types of unpaid annuities.

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Annuities Unpaid At Death

If it appears you may be entitled to an annuity unpaid at death, please read this part of the booklet thoroughly. It will provide information which you will need to understand annuities unpaid at death.

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Person Eligible For Monthly Benefits May Receive A Residual Lump-Sum Instead of Monthly Benefits

If there are no survivor benefits currently being paid by either the RRB or the Social Security Administration and the only benefits which will become payable in the future are benefits for a widow(er) or parent, the widow(er) or parent, if under age 60, can waive the right to ever receive monthly benefits based on the employee's railroad work in order to allow the residual lump-sum to be paid.

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