The Tax Questions Blog

Archive for September, 2010

Question: Are RRB -1099-R Benefits taxable?

My Aunt recieves US Railroad Retirement benefits from my late uncle's 'pension'. She recieved her first RRB-1099 and RRB-1099-R forms for the 2007 tax year. She had been having Federal taxes taken out of every check, but it appears that that may not have been necessary.

The First copy, the RRB-1099, listed Tier 1 benefits of $9,976 with $0 Federal Witholding Tax.

The last three copies RRB-1099-R (attached to the first) listed no Tier 1 benfits, but had Employee Contributions, and a different Total Gross Paid, but DID have Federal Withholding Tax of $908.00 (the amounts whithheld from checks).

So, when we filed taxes, the program used the RRB-1099 and asked for the box with the $0 amount in it!! SO the question is, do we need to withhold any Federal taxes or was this just a HUGE donation to the Fed. Gov't for nothing??? Thanks you and I hope someone understood all this.

blizzard

Answer: You treat the RRB-1099 similar to a SSA-1099. This will show up in the social security benefits line.

You treat an RRB-1099-R similar to a 1099-R. this will show up in the pension line. If the software doesn't have an entry for it, treat it as if she got a 1099-R.

She has the gross amount received.
She has the amount withheld.
She had the employee contributions.

So you have to calculate how much of the benefits received are taxable. See publication 575.

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