Railroad RRB1099 Question

[photoman]

I have a client that brought me their 2011 info to prepare return. I also had him give me his 2010. My understanding of the rrb1099r is that both the pension side and the SocSecurity side can be taxed if other incomes ,etc force it to exceed untaxed limits. He has two other 1099R's that are taxed and a W-2. My drake software is taxing both sides. The firm that prepared his return last year somehow excluded the pension side of the railroad , but taxed the SocSecurity side and the other two 1099R's and the W-2. Since my drake is taxing the approx other 16000 on the pension side of railroad this has thrown me for a loop. Does anyone have any thoughts on this . The client thinks I;m crazy.

[gman]

Taxable

I would say it is normally all taxable if income exceedes social security limit-85% taxable on social security. Pension income would be taxable.

[Gary2]

The pension side may or may not be taxable. See Pub. 575, starting on page 6 for a detailed explanation.

[Gretel]

In addition, watch for the state. My state excludes 1099-R RR retirement income from taxes.

[Burke]

And so does OP's state, Indiana. Both SS and Tier 1 & II Railroad benefits on RRB-1099 are excluded, but on the state only. However, if you have a separate railroad pension on another regular-type form 1099R, that is generally taxable both to fed and state. Couldn't tell from your post if this was the case. Also, be sure to discount the pension part using Simplified General Rule based on employee contributions (Form RRB-1099.) The pension goes on 16a/b and the social security equivalent part (top part of RRB-1099) goes on the SS worksheet. If Drake has a form input and it says RRB-1099, its calculation is probably correct.

[photoman]

Thanks to all. This is exactly how I handled it. I get confused on the first one each year.

Ron

[thetaxman2200]

So I am reading this correctly - if the dollar amount is in box 3 on green form - not taxable unless they reach Soc. Sec. Earned limit. If not there is no monies listed in the non green color forms - then there would be not taxable consequence?