A Social Security Lawyer Albuquerque on Railroad Retirement Benefits and Taxes
Railroad retirement benefits may be comprised of several different components, including:
- Tier I benefits considered Social Security Equivalent Benefits (SSEB)
- Tier I benefits considered Non-Social Security Equivalent Benefits (NSSEB)
- Tier II benefits
- Vested dual benefits
- Supplemental annuities
Treatment for Federal Tax Purposes
For most railroad retirement recipients, the SSEB portion of Tier I benefits are treated as Social Security benefits for tax purposes, and the NSSEB portion is treated as a private pension.
Determining Taxable Portion of SSEB Benefits
Whether any portion of SSEB benefits is taxable depends on a calculation that factors what is called a base amount in consideration of the recipient’s income and filing status. For purposes of determining any tax due, income includes:
- Taxable income
- Tax-exempt interest income
- One-half of SSEB amount
The base amount for a single, head of household or qualifying widow tax filer is $25,000; for a married individual filing jointly, it is $32,000; and for most people who are married filing separately, the base amount is $0, which means all SSEB income is taxable. Withholding If taxes will be due based on income exceeding the appropriate base amount, the benefits recipient can file a tax withholding form with the IRS. The Railroad Retirement Board will not withhold any portion of the benefit amount without the proper form on file.
Contact a Disability Albuquerque Lawyer for Legal Advice
To fully understand and maximize your retirement benefits, contact the Law Office of Michelle Baca and Associates, a Social Security Lawyer Albuquerque legal group, at www.albuquerquedisability.com.
