1. Social Security and Railroad Retirement Equivalent
Form 1040 – Line 22
Pub 4491 – Part 3 – Lesson 15
Pub 4012 – Page D – 25

2. Intake and Interview
Ask for Social Security statement SSA-1099 and/or Railroad Retirement RRB-1099 if line 13 is checked either Yes or Unsure.
If any lump-sum payments, does taxpayer have returns for those years?
NTTC Training – TY2016

3. Form SSA-1099 Fabricated person
Make sure to use Form SSA-1099 and not the estimate for the next year. Sometimes taxpayers mistakenly bring in that form.
NTTC Training – TY2016

4. Social Security Income in TaxSlayer
In Federal Section, select IRA/Pension Distributions (1099R-SSA-1099) from Income list. Then select SSA *
Enter data for both Taxpayer and Spouse
Check for Federal withholding
Add Medicare payments and enter on Medicare line, it will carry automatically to Schedule A
* Can go directly to SSA-1099 input screen by using Quick Files, Taxpayer Profiles, Enter Form or 1040 View .
NTTC Training – TY2016

5. Add SS Income To TaxSlayer
Enter data as indicated for Taxpayer and Spouse.
Add Medicare Parts, if shown, together and enter on line Taxpayer’s Medicare Premiums if not self-employment health care deduction which is out of scope
Railroad Tier 1 benefits are SS equivalent – more later
NTTC Training – TY2016

6. Lump-Sum Social Security
Benefits paid may include lump-sum payments for prior years
Prior year amounts will show in DESCRIPTION block of Form SSA-1099
All must be included in the current return
Compare whether refund/tax owed changes when all entered for current year versus allocating appropriate amounts to prior year(s)
Sometimes if a taxpayer files for disability, it takes a long time to work through the approval process. This can result in social security allocated to several years. An example is shown on the next chart.
For multiple year social security it may be possible that there isn’t any tax impact if all of the social security is entered as lump-sum for the current year. If there is an impact it may be better to use lump sum worksheets for each year; however, the AGI, taxable social security, total social security and tax exempt interest are needed for each year. If lump sum is used, taxpayer must have tax returns available for those years.
NTTC Training – TY2016 6

7. SSA -1099 Lump Sum Distribution
2016
Sample SSA-1099 Lump- Sum Distribution
If attorney fees are included in the Description of Amount in Box 3 section, those attorney fees can be included as an itemized deduction on line 23 of the Schedule A, but only to the extend that the income is taxable. For example, if one half of the Social Security benefit is taxable than only half of the attorney fees are deductible.
NTTC Training – TY2016

8. Start With SSA-1099 Input Screen
Enter entire amount on current year input screen. Then select Begin Worksheet.
Taxpayer MUST have previous year(s) return(s)
NTTC Training – TY2016

9. Complete one worksheet for each year.
Lump-Sum Worksheet
Complete one worksheet for each year.
Click 1 – Enter the previous year benefits were received. A separate worksheet will be required for each year. In this example worksheets would be required for 2014, and 2013
Click 2 – Enter filing status for the year indicated.
Click 3 – Enter the total amount of social security received for the earlier year and reported for that year
Click 4 – Enter the lump-sum payment for the earlier year received this year
Click 5 – Enter the adjusted gross income reported on the tax return for the earlier year.
Click 6 – Enter taxable social security, if any, reported on the tax return for the earlier year.
Note: You have to have all of this information (ideally prior year returns) for the years for which payments were received
NTTC Training – TY2016

10. Comments… Taxpayer must have copies of previous year tax return(s)
Be sure to enter any SS income received by taxpayer and spouse in previous year
Be sure to check previous return for any tax-exempt interest (Line 8b) [line 5 on worksheet]
If allocating amounts to previous years results in a lower taxable amount, TaxSlayer will automatically use that amount
Print package contains worksheets for all years
NTTC Training – TY2016

11. Railroad Retirement Benefits
Pub 4012 Pg D-25
Railroad Retirement Tier 1
Blue form
RRB-1099
Same Rules as Social Security
Enter data on Social Security line on SSA-1099 input screen.
Enter Medicare B and D on Medicare line
In TaxSlayer , there is no separate input line for Railroad Retirement Tier 1 benefits.
NTTC Training – TY2016

12. RRB-1099
2016
21,320
-0- A
21,320
JOHN CONDUCTOR
1 MAIN STREET
ALBUQUERQUE, NM 87110
Click 1 – Box 5 Net Social Security Equivalent Benefit to be entered on SSA-1099 input screen.
Click 2 – Box 11 – Medicare Premium total.
Click 3 – Box 10 – Federal Income Tax Withheld.
Click 2 – Box 10 Federal Income Tax Withheld to be entered on Worksheet 1.
Click 3 – Box 11 Medicare Premium Total to be entered on Worksheet 1.
1,258.80
3,192.00
NTTC Training – TY2016

13. SSA-1099 Input Screen – Railroad Retirement
Enter Railroad Retirement Tier 1 amount on Social Security Line
Click 1 – Net Social Security Equivalent Portion of tier 1 received this year from line 5 of RRB – 1099 form. Since in TaxSlayer there is no separate line for Tier 1 Railroad Retirement benefits received by the taxpayer, you will be required to make a manual adjustment when preparing your state return. Also, remember to add any taxable Tier 2 benefits for both taxpayer and spouse when applicable when making the adjustment on the state return. The Railroad Retirement Act specifically exempts benefits paid by the Railroad Retirement Board from all state and local taxes.
Click 2 – Federal Income Tax withheld from line 10 of RRB-1099 Form
Click 3 – Total Medicare premiums withheld from line 11 of RRB-1099 form.
NTTC Training – TY2016

14. Railroad Retirement Benefits
Railroad Retirement Tier 2
Green form
RRB-1099 – R
Taxed like pension
Taxation of Tier 2 Covered in Retirement income lesson
NTTC Training – TY2016

15. Foreign Old Age Payments
Canada Pension Plan, Quebec Pension Plan and Old Age Security from Canada and Germany
By treaty are added to/treated like U.S. Social Security (Pub 915)
Taxpayer must have converted amount into US dollars (bank statement shows)
Other countries and pensions from all countries (other than above) out-of-scope
NTTC Training – TY2016

16. If Taxpayer does not have SSA-1099
Use SSA-4926 for 2016 (statement of benefits to be paid)
No cost of living adjustment for 2016, the 2015 and 2016 benefits are the same
Taxpayer can set up account at to get information
Account at secure.ssa.gov is taxpayer responsibility. Requires taxpayer address. Not a task for counselors.
NTTC Training – TY2016

17. Quality Review
Check that all information transferred from Form(s) SSA-1099 to SSA-1099 input screen (particularly Federal Income Tax Withheld)
If benefits are shown for multiple years, determine if lump-sum worksheets are needed
For Form(s) RRB-1099 (Blue) make sure all information has been transferred to SSA input screen
NTTC Training – TY2016

18. Exit Interview
May need to discuss/explain why part of the SS benefits are taxable
NTTC Training – TY2016

19. Questions/Comments?
NTTC Training – TY2016