[Code of Federal Regulations]
[Title 20, Volume 1]
[Revised as of April 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 20CFR243.4]

[Page 502]
 
                      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.