1. Social Security and Railroad Retirement Equivalent
Form 1040 – Line 22
Pub 4491 – Part 3 – Lesson 15
Pub 4012 – Page D – 25
NTTC Training – 2013

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 – TY2015
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3. NTTC Training Slides
Fabricated person
Make sure to use Form SSA-1099 and not the estimate for the next year. Sometimes taxpayers mistakenly bring in that form.
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4. Social Security Income in TaxWise
Select Wkt1 from Tree
Enter data for both Taxpayer and Spouse
Check for Federal withholding
Add Medicare payments and enter on Medicare line, it will carry automatically to Sch A
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5. Add SS Income NTTC Training Slides
Enter data as indicated for Taxpayer and Spouse.
Add Medicare Parts, if shown, together and enter on line Medicare To Schedule A if not self-employment health care deduction which is out of scope
Railroad Tier 1 benefits are SS equivalent – more later
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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.
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7. Lump-Sum Distribution
None
None
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.
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8. Start With 1040 Wkt1
In TaxWise, at the bottom of 1040 Wkt1 you’ll see “Lump Sum Payment…”
Enter amount(s) for 2015 then click here and link (F9) for worksheet
Taxpayer MUST have previous year(s) return(s) x x
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9. Complete one worksheet for each year
Lump-Sum Worksheet
2013
2015
2015
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, 2013, and 2012
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
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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]
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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 Railroad Tier 1 line on Wkt1 – do not use Social Security line
Enter Medicare B and D on Medicare line
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12. RRB-1099
2015
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 Worksheet 1.
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
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13. 1040 Wkt1 – Railroad Retirement
2015
Click 1 – Net Social Security Equivalent Portion of tier 1 received this year from line 5 of RRB – 1099 Form. Be sure to enter the amount on Railroad tier 1 line, not Social security line . This will trigger an adjustment on the state return if any portion of your tier 1 is taxable. The Railroad Retirement Act specifically exempts benefits paid by the Railroad Retirement Board from all state and local taxes.
Click 2 – Total Medicare payments from line 11 of RRB-1099 Form
Click 3 – Federal tax withheld from line 10 of RRB-1099 form.
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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 – TY2015

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
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16. If Taxpayer does not have SSA-1099
Use SSA-4926 for 2016 (statement of benefits to be paid). Since there was no cost of living adjustment for 2016, the 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.
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17. Quality Review
Check that all information transferred from Form(s) SSA-1099 to Wkt1 (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 Wkt1
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18. Questions/Comments?
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