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Changing Withholding of Federal Income Tax
(Posted April 26, 2004)
Question 438: I took the 60/30 retirement in 2002; my entire Railroad Retirement benefit was taxed as a pension. Now that I am 62, will the Railroad Retirement Board automatically adjust the withholding of federal income tax to reflect that my Tier 1 benefit now is taxable as a Social Security benefit?
Answer: You need to contact the RRB in order to revise the amount being withheld from your Railroad Retirement payments for federal income tax.
You are correct that at age 62 a portion of your benefit will be taxed under the same rules that apply to Social Security benefits. It will not be your entire Tier 1 benefit-- just the portion that corresponds to the amount you would receive as a reduced Social Security payment at 62. The remainer will continue to be taxed as a private pension.
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