V. M. SPEAKMAN, JR. OFFICE OF LABOR MEMBER LABOR MEMBER
March 6, 2008 Release No: 04-2008
Subject: Railroad Retirement Annuitants Must File a 2007 Tax Return to Receive Stimulus Payments (Rebates)
TO CHIEF EXECUTIVES, RAILWAY LABOR ORGANIZATION:
Starting in May, the U.S. Treasury will begin sending economic stimulus payments, often referred to as rebates, to more than 130 million individuals.
Most taxpayers do not need to take any extra steps to receive these payments. However, some railroad retirement annuitants, social security beneficiaries, and recipients of certain veterans' benefits, who might not otherwise need to file a 2007 tax return, must do so to receive the stimulus payment. The return must show at least $3,000 in qualifying income.
Qualifying income includes social security benefits, the Social Security Equivalent Benefit (SSEB) portion of a railroad retirement tier I benefit, certain veterans' benefits and earned income, such as wages and net earnings from self-employment that are includable in income. For people filing joint tax returns, only a total of $3,000 of qualifying income from both spouses is required.
To figure their qualifying income, annuitants who would not otherwise file a 2007 tax return should add together the following amounts:
·The SSEB portion of tier I benefits or special guaranty amounts reported in Box 5 of the 2007 Form RRB-1099, which annuitants would have received in January 2008. (Do not include amounts reported on Form RRB-1099-R.)
·Social security benefits reported in Box 5 of the 2007 Form SSA-1099, which would have been received in January 2008.
·Veterans' benefits received in 2007, including veterans' disability compensation, disability pensions, or survivors' benefits received from the Department of Veterans Affairs.
·Wages reported on Form W-2.
·Net earnings from self-employment that are includable in income.
A Form 1040A illustration on the IRS Web site (www.irs.gov) shows the limited number of lines that need to be filled out by recipients of social security, railroad retirement and veterans' benefits who are not required to file an income tax return but are doing so to receive a stimulus payment. The key line for reporting 2007 benefits is Line 14a of Form 1040A. The IRS has advised that while this line only mentions social security, railroad retirement annuitants should use this line even if their only benefits were railroad retirement or veterans' benefits. In addition, taxpayers in these groups should write the words "Stimulus Payment" at the top of the Form 1040A.
The IRS is also reminding taxpayers with social security, railroad retirement or veterans' benefits who have already filed but did not report their qualifying benefits on either Line 14a of Form 1040A (or Line 20a of Form 1040) that they may need to file an amended return in some situations to receive a larger stimulus payment. Taxpayers who already have filed but did not report these benefits can file an amended return by using Form 1040X.
Extensive and detailed information on the stimulus payments is available on the IRS Web site and annuitants are strongly encouraged to visit the site.
Individuals who need to file a return this year to receive a stimulus payment may be able to take advantage of thousands of free tax preparation sites nationwide for low-income and elderly taxpayers.
The Volunteer Income Tax Assistance (VITA) program provides help to low and moderate income taxpayers. Call 1-800-906-9887 to locate the nearest VITA site.
The Tax Counseling for the Elderly (TCE) Program provides free tax help to people age 60 and older. As part of the IRS-sponsored TCE Program, AARP offers the Tax-Aide counseling program at more than 7,000 sites nationwide during the filing season. To find an AARP Tax-Aide site call 1-888-227-7669 or visit the AARP Web site at www.aarp.org.
Sincerely,
V. M. Speakman, Jr. Labor Member
cc: National Reporting Officers National Legislative Representative
Dependent Verification - Action Required
January 31, 2008
22,000 dependents of BNSF employees are about to lose their health and welfare benefit coverage, because the employees have not responded to the dependent verification materials that were sent out in September, and to the reminders that have been sent out since.
If you have dependents who haven't already been verified and you want them to keep medical and drug benefit coverage, get them verified NOW.
If you have lost the verification materials, please call 1-866-682-5619 NOW to request a new kit.
If you do not respond, or if you do not complete the process during the early part of February, your unverified dependents will lose ALL benefit coverage (medical, drug, mental health, dental and vision) on March 15th.
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Prepared by Public Affairs 312-751-4777
The standard Medicare Part B monthly premium will be $93.50 in January 2007, an increase of $5.00 from the 2006 premium of $88.50.
All beneficiaries currently pay the same basic premium amount for Medicare Part B, which is set annually at a level that covers 25 percent of the estimated Part B program costs for the year. The Government has subsidized the remaining 75 percent for all beneficiaries. This 75-percent subsidy will decrease for those making over $80,000 a year beginning in 2007.
As a result of a new Medicare law, the Part B monthly premiums for some beneficiaries will be greater beginning in 2007, depending on a beneficiary’s or married couple’s modified adjusted gross income. The income-related Part B premiums for 2007 will be $105.80, $124.40, $142.90, or $161.40, depending on the extent to which an individual beneficiary’s income exceeds $80,000 (or a married couple’s income exceeds $160,000), with the highest premium rates only paid by beneficiaries whose incomes are over $200,000 (or $400,000 for a married couple). The income thresholds will increase annually by indexing to the consumer price index (CPI). The Centers for Medicare & Medicaid Services estimates that about 4 percent of Medicare beneficiaries with Part B will pay higher Part B premiums based on their incomes.
The Social Security Administration (SSA) is responsible for all income-related monthly adjustment amount determinations. To make the determinations, SSA will use the most recent tax return information provided by the IRS. For 2007, in most cases that will be the beneficiary’s 2005 tax return information. If that information is not available, SSA will use information from the 2004 tax return.
Those railroad retirement and social security Medicare beneficiaries affected by the new 2007 Part B income-related premiums will receive a notice from SSA by December 2006. The notice will include an explanation of the circumstances where a beneficiary may request a new determination. Persons who have any questions or would like to request a new determination should contact SSA after receiving and reviewing their notice.
The provision for an income-related Part B premium was part of the Medicare Prescription Drug, Improvement and Modernization Act of 2003.
2007 PART B PREMIUMS
Beneficiaries who file an individual tax return with income:
Beneficiaries who file a joint tax return with income:
Income-related monthly adjustment amount:
Total monthly Part B premium amount:
Less than or equal to $80,000
Less than or equal to $160,000
$0.00
$93.50
Greater than $80,000 and less than or equal to $100,000
Greater than $160,000 and less than or equal to $200,000
$12.30
$105.80
Greater than $100,000 and less than or equal to $150,000
Greater than $200,000 and less than or equal to $300,000
$30.90
$124.40
Greater than $150,000 and less than or equal to $200,000
Greater than $300,000 and less than or equal to $400,000
$49.40
$142.90
Greater than $200,000
Greater than $400,000
$67.90
$161.40
The monthly premium rates paid by beneficiaries who are married, but file a separate return from their spouses and who lived with their spouses at some time during the taxable year, are different. Those rates are as follows:
Beneficiaries who are married, but file a separate tax return with income:
Income-related monthly adjustment amount:
Total monthly Part B premium amount:
Less than or equal to $80,000
$0.00
$93.50
Greater than $80,000 and less than or equal to $120,000
$49.40
$142.90
Greater than $120,000
$67.90
$161.40
Note: Income-related premiums are being phased in over a 3-year period. This means that the income-related monthly adjustment amounts shown in the above tables represent 1/3 of the total income-related monthly adjustment amount that higher income beneficiaries will eventually pay in 2009. In 2008, high income beneficiaries will pay 2/3 of the total income-related monthly adjustment amount. The income threshold amounts will increase annually through indexing.
To view and download PDF documents, you need the free Acrobat Reader. We recommend using the latest version.
Viewers with visual disabilities can go to Adobe's Access Website for tools and information that will help make PDF files accessible.
Prepared by Public Affairs 312-751-4777
The amounts of compensation subject to railroad retirement tier I and tier II payroll taxes will increase in 2007. However, the tier I tax rate on employees and employers remains unchanged. Under the Railroad Retirement and Survivors’ Improvement Act of 2001, tier II tax rates are determined annually by an average account benefits ratio. Based on this ratio, the tier II tax rates on employees and employers will decrease in 2007. Railroad unemployment insurance tax rates paid by employers will continue to include a 1.5 percent surcharge in 2007.
Tier I and Medicare Tax.--The railroad retirement tier I payroll tax rate on covered rail employees and employers for the year 2007 remains at 7.65 percent. The railroad retirement tier I tax rate is the same as the social security tax, and for withholding and reporting purposes is divided into 6.20 percent for retirement and 1.45 percent for Medicare hospital insurance. The maximum amount of an employee’s earnings subject to the 6.20 percent rate will increase to $97,500 in 2007 from $94,200 in 2006, but there is no maximum on earnings subject to the 1.45 percent Medicare rate. The increase in the amount of earnings subject to railroad retirement and social security taxes is based on indexing to increases in average national wages.
Tier II Tax.--The railroad retirement tier II tax rate on employees will decrease by 0.5 percent, from 4.4 percent to 3.9 percent in 2007, and the rate on employers will also decrease by 0.5 percent, from 12.6 percent to 12.1 percent. The maximum amount of earnings subject to railroad retirement tier II taxes, however, will increase to $72,600 in 2007 from $69,900 in 2006. Tier II tax rates under the 2001 Railroad Retirement and Survivors’ Improvement Act are based on an average account benefits ratio reflecting railroad retirement fund levels. Depending on this ratio, the tier II tax rate for employers can range between 8.2 percent and 22.1 percent, while the tier II rate for employees can be between 0 percent and 4.9 percent.
Unemployment Insurance Tax.--Employers, but not employees, also pay railroad unemployment insurance taxes, which are experience-rated by employer. The basic tax rates range from a minimum of 0.65 percent to a maximum of 12 percent on monthly earnings up to $1,230 in 2007, up from $1,195 in 2006. However, the Railroad Unemployment Insurance Act also provides for a surcharge in the event the Railroad Unemployment Insurance Account balance falls below an indexed threshold amount, and such a surcharge of 1.5 percent applied in 2004-2006. Since the accrual balance of the Railroad Unemployment Insurance Account was $114.8 million on June 30, 2006, which was less than the indexed threshold of $120.8 million, a surcharge of 1.5 percent will again be added to the basic tax rates in 2007, but will not increase the maximum 12 percent rate.
The unemployment insurance tax rates on railroad employers in 2007 therefore will range from 2.15 percent (the minimum basic rate of 0.65 percent plus the 1.5 percent surcharge) to a maximum of 12 percent on monthly compensation up to $1,230.
The 1.5 percent surcharge will not apply to new employers in 2007, and new employers will initially pay a tax rate of 3.75 percent, which represents the average rate paid by all employers in the period 2003-2005.
For 78 percent of covered employers, the unemployment insurance rate assessed will be 2.15 percent in 2007.
Please Note the Correct United Health Care Phone Number
2006-11-08
A United Health Care (for scheduled employees) phone number listed under "The ABCs of Retirement" article in the current issue of Railway is incorrect. The correct phone number is 1-800-842-9905.
BNSF Headquarters BNSF Railway Company 2650 Lou Menk Dr. 2nd Floor P.O. Box 961057 Fort Worth, TX 76161-0057 Phone: (817) 352-1000
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