Publication 915 - Social Security And Equivalent Railroad Retirement Benefits - Internal Revenue Service - 2001 Page 4
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Example. In 2000, you received $3,000 in social secur-
Italy.
ity benefits, and in 2001 you received $2,700. In March
•
Japan.
2001, SSA notified you that you should have received only
•
Romania.
$2,500 in benefits in 2000. During 2001, you repaid $500
to SSA. The Form SSA –1099 you received for 2001
•
The United Kingdom.
shows $2,700 in box 3 (gross amount) and $500 in box 4
(repayment). The amount in box 5 shows your net benefits
Under a treaty with India, benefits paid to individuals
of $2,200 ($2,700 minus $500).
who are both residents and nationals of India are exempt
from U.S. tax if the benefits are for services performed for
Tax withholding and estimated tax. You can choose to
the United States, its subdivisions, or local government
have federal income tax withheld from your social security
authorities.
benefits and/or the SSEB portion of your tier 1 railroad
retirement benefits. If you choose to do this, you must
If you are a resident of Switzerland, 85% of your bene-
complete a Form W – 4V. You can choose withholding at
fits are taxed at a 15% rate.
7%, 10%, 15%, or 27% of your total benefit payment.
For more information, get Publication 519, U.S. Tax
If you do not choose to have income tax withheld, you
Guide for Aliens.
may have to request additional withholding from other
Exemption from withholding. If your social security
income or pay estimated tax during the year. For details,
benefits are exempt from tax because you are a resident of
get Publication 505 or the instructions for Form 1040–ES.
one of the treaty countries listed, the SSA will not withhold
U.S. citizens residing abroad. U.S. citizens who reside
U.S. tax from your benefits.
in the following countries are exempt from U.S. tax on their
If your railroad retirement benefits are exempt from tax
benefits.
because you are a resident of one of the treaty countries
•
listed, you can claim an exemption from withholding by
Canada.
filing Form RRB–1001, Nonresident Questionnaire, with
•
Egypt.
the RRB. Contact the RRB to get this form.
•
Germany.
•
Ireland.
How To Report Your Benefits
•
Israel.
•
If part of your benefits are taxable, you must use Form
Italy. (You must also be a citizen of Italy for the
1040 or Form 1040A. You cannot use Form 1040EZ.
exemption to apply.)
•
Reporting on Form 1040. Report your net benefits (the
Romania.
amount in box 5 of your Form SSA – 1099 or Form
RRB–1099) on line 20a and the taxable part on line 20b. If
The SSA will not withhold U.S. tax from your benefits if
you are married filing separately and you lived apart from
you are a U.S. citizen.
your spouse for all of 2001, also enter “D” to the left of line
The RRB will withhold U.S. tax from your benefits un-
20a.
less you claim an exemption from withholding. For informa-
tion on how to claim an exemption from withholding, see
Reporting on Form 1040A. Report your net benefits (the
Exemption from withholding under Nonresident aliens,
amount in box 5 of your Form SSA – 1099 or Form
next.
RRB–1099) on line 14a and the taxable part on line 14b. If
Nonresident aliens. A nonresident alien is an individual
you are married filing separately and you lived apart from
who is not a citizen or resident of the United States. If you
your spouse for all of 2001, also enter “D” to the right of the
are a nonresident alien, the rules discussed in this publica-
word “benefits” on line 14a.
tion do not apply to you. Instead, 85% of your benefits are
taxed at a 30% rate, unless exempt (or subject to a lower
Benefits not taxable. If none of your benefits are taxable,
rate) by treaty. You will receive a Form SSA– 1042S or
do not report any of them on your tax return. But if you are
Form RRB– 1042S showing the amount of your benefits.
married filing separately and you lived apart from your
These forms will also show the tax rate and the amount of
spouse for all of 2001, make the following entries. On Form
tax withheld from your benefits.
1040, enter “D” to the left of line 20a and “ –0 –” on line 20b.
Under tax treaties with the following countries, residents
On Form 1040A, enter “D” to the right of the word “benefits”
of these countries are exempt from U.S. tax on their bene-
on line 14a and “ –0–” on line 14b.
fits.
•
Canada.
How Much Is Taxable?
•
Egypt.
•
Germany.
If part of your benefits are taxable, how much is taxable
depends on the total amount of your benefits and other
•
Ireland.
income. Generally, the higher that total amount, the
•
Israel.
greater the taxable part of your benefits.
Page 4
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