[Code of Federal Regulations]

[Title 20, Volume 1]

[Revised as of April 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 20CFR243.4]



[Page 500]

 

                      TITLE 20--EMPLOYEES' BENEFITS

 

                  CHAPTER II--RAILROAD RETIREMENT BOARD

 

PART 243_TRANSFER, ASSIGNMENT, OR WAIVER OF PAYMENTS--Table of Contents

 

Sec.  243.4  Taxation of benefits.



    (a) Annuities paid by the Board are subject to Federal income tax in 

accord with the Internal Revenue Code. The annuity portion equivalent to 

the amount of the benefit that the person would have actually received 

under the Social Security Act if railroad service had been creditable 

under that Act is treated for Federal income tax purposes the same way 

as a social security benefit. Annuity payments computed under the social 

security overall minimum provision contained in section 3(f)(3) of the 

Railroad Retirement Act (see Sec.  243.5 of this part) are also treated 

as social security benefits for Federal income tax purposes. Railroad 

retirement annuity amounts exceeding social security equivalent 

payments, vested dual benefits, and supplemental annuities are taxed in 

the same manner as benefits provided under an employer plan which meets 

the requirements of section 401(a) of the Internal Revenue Code.

    (b) Pursuant to section 14 of the Railroad Retirement Act, no 

annuity or supplemental annuity, in whole or in part, is subject to any 

tax by any state or any political subdivision thereof.