Railroad Retirement Benefits

Benefits paid under the Railroad Retirement Act fall into two categories. These categories are treated differently for income tax purposes.

The first category is the amount of tier 1 railroad retirement benefits that equals the social security benefit that a railroad employee or beneficiary would have been entitled to receive under the social security system. This part of

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the tier 1 benefit is the social security equivalent benefit (SSEB) and you treat it for tax purposes as social security benefits. If you received, repaid, or had tax withheld from the SSEB portion of tier 1 benefits during 2025, you will receive Form RRB-1099, Payments by the Railroad Retirement Board (or Form RRB-1042S, Statement for Nonresident Alien Recipients of Payments by the Railroad Retirement Board, if you are a nonresident alien), from the U.S. Railroad Retirement Board (RRB).

For more information about the tax treatment of the SSEB portion of tier 1 benefits and Forms RRB-1099 and RRB-1042S, see Pub. 915.

The second category contains the rest of the tier 1 railroad retirement benefits called the non-social security equivalent benefit (NSSEB). It also contains any tier 2 benefit, vested dual benefit (VDB), and supplemental annuity benefit. Treat this category of benefits, shown on Form RRB-1099-R, as an amount received from a qualified employee plan. This allows for the tax-free (nontaxable) recovery of employee contributions from the tier 2 benefits and the NSSEB part of the tier 1 benefits. (The NSSEB and tier 2 benefits, less certain repayments, are combined into one amount called the Contributory Amount Paid on Form RRB-1099-R.) VDBs and supplemental annuity benefits are non-contributory pensions and are fully taxable. See Taxation of Periodic Payments , later, for information on how to report your benefits and how to recover the employee contributions tax free. Form RRB-1099-R is used for U.S. citizens, resident aliens, and nonresident aliens.

Nonresident aliens. A nonresident alien is an individual who isn’t a citizen or a resident alien of the United States. If you are a nonresident alien, you are subject to U.S. tax on your SSEB portion of tier 1 benefits at a 30% rate, unless exempt or subject to a lower treaty rate. See Pub. 519, for more information. If your rate of tax changed or your country of legal residence changed during the tax year, you may receive more than one Form RRB-1042S or RRB-1099-R. To determine your total benefits paid or repaid and total tax withheld for the year, you should add the amounts shown on all forms you received for that year.

Tax withholding. To request or change your income tax withholding from SSEB payments, U.S. citizens should contact the IRS for Form W-4V, Voluntary Withholding Request, and file it with the RRB. To elect, revoke, or change your income tax withholding from NSSEB, tier 2, VDB, and supplemental annuity payments received, use Form RRB W-4P. If you are a nonresident alien or a U.S. citizen living abroad, you should provide Form RRB-1001, Nonresident Questionnaire, to the RRB to furnish citizenship and residency information and to claim any treaty exemption from U.S. tax withholding. Nonresident U.S. citizens can’t elect to be exempt from withholding on payments delivered outside the United States.

Help from the RRB. To request an RRB form or to get help with questions about an RRB benefit, you should contact your nearest RRB field office if you reside in the

United States (call 877-772-5772 for the nearest field office) or U.S. Consulate/Embassy if you reside outside the United States. You can visit the RRB on the Internet at RRB.gov .

Form RRB-1099-R. The following discussion explains the items shown on Form RRB-1099-R. The amounts shown on this form are before any deduction for:

• Federal income tax withholding;

• Medicare premiums;

• Legal process garnishment payments;

• Recovery of a prior-year overpayment of an NSSEB, tier 2 benefit, VDB, or supplemental annuity benefit; or

• Recovery of Railroad Unemployment Insurance Act benefits received while awaiting payment of your railroad retirement annuity.

The amounts shown on this form are after any offset for:

• Social security benefits;

• Age reduction;

• Public service pensions or public disability benefits;

• Dual railroad retirement entitlement under another RRB claim number;

• Work deductions;

• Legal process partition deductions;

• Actuarial adjustment;

• Annuity waiver; or

• Recovery of a current-year overpayment of NSSEB, tier 2 benefits, VDB, or supplemental annuity benefits.

The amounts shown on Form RRB-1099-R don’t reflect any special rules, such as capital gain treatment or the special 10-year tax option for lump-sum payments, or tax-free rollovers. To determine if any of these rules apply to your benefits, see the discussions about them later.

Generally, amounts shown on your Form RRB-1099-R are considered a normal distribution. Use distribution code “7” if you are asked for a distribution code. Distribution codes aren’t shown on Form RRB-1099-R.

There are three copies of this form. Copy B is to be included with your income tax return if federal income tax is withheld. Copy C is for your own records. Copy 2 is filed with your state, city, or local income tax return when required. See the illustrated Copy B (Form RRB-1099-R), later.

Each beneficiary will receive their own Form

TIP RRB-1099-R. If you receive benefits on more than

one railroad retirement record, you may get more than one Form RRB-1099-R. So that you get your form timely, make sure the RRB always has your current mailing address.

Box 1—Claim Number and Payee Code. Your claim number is a six- or nine-digit number preceded by an alphabetical prefix. This is the number under which the RRB

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2025
PAYER’S NAME, STREET ADDRESS, CITY, STATE, AND ZIP CODE ANNUITIES OR PENSIONS BY THE
UNITED STATES RAILROAD RETIREMENT BOARD RAILROAD RETIREMENT BOARD
844 N RUSH ST CHICAGO IL 60611-1275 3. Employee Contributions
PAYER’S FEDERAL IDENTIFYING NO. 36-3314600

FORM RRB-1099-R

paid your benefits. Your payee code follows your claim number and is the last number in this box. It is used by the RRB to identify you under your claim number. In all your correspondence with the RRB, be sure to use the claim number and payee code shown in this box.

Box 2—Recipient’s Identification Number. This is the recipient’s U.S. taxpayer identification number (TIN). It is the social security number (SSN), individual taxpayer identification number (ITIN), or employer identification number (EIN), if known, for the person or estate listed as the recipient.

If you are a resident or nonresident alien who

TIP must furnish a TIN to the IRS and aren’t eligible to

obtain an SSN, use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN. The Instructions for Form W-7 explain how and when to apply.

Box 3—Employee Contributions. This is the amount of taxes withheld from the railroad employee’s earnings that exceeds the amount of taxes that would have been withheld had the earnings been covered under the social security system. This amount is the employee’s cost that you use to figure the tax-free part of the NSSEB and tier 2 benefit you received (the amount shown in box 4). (For information on how to figure the tax-free part, see Partly Taxable Payments under Taxation of Periodic Payments , later.) The amount shown is the total employee contribu- tion amount, not reduced by any amounts that the RRB calculated as previously recovered. It is the latest amount reported for 2025 and may have increased or decreased from a previous Form RRB-1099-R. If this amount has changed, the change is retroactive. You may need to refigure the tax-free part of your NSSEB/tier 2 benefit for 2025 and prior tax years. If this box is blank, it means that the amount of your NSSEB and tier 2 payments shown in box 4 is fully taxable.

If you had a previous annuity entitlement that