Federal Tax Guide for Seniors

Tax Guide for Seniors
2022 Publication 554
Department of the Treasury
Internal Revenue Service

Publication 554

Contents
What's New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Reminders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Cat. No. 15102R

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Tax Guide
for Seniors

Chapter 1. 2022 Filing Requirements . . . . . . . . . . 5
General Requirements . . . . . . . . . . . . . . . . . . . . 5

For use in preparing

2022 Returns

Chapter 2. Taxable and Nontaxable Income
Compensation for Services . . . . . . . . . . . .
Retirement Plan Distributions . . . . . . . . . . .
Social Security and Equivalent Railroad
Retirement Benefits . . . . . . . . . . . . . . .
Sickness and Injury Benefits . . . . . . . . . . .
Life Insurance Proceeds . . . . . . . . . . . . . .
Sale of Home . . . . . . . . . . . . . . . . . . . . . .
Reverse Mortgages . . . . . . . . . . . . . . . . .
Other Items . . . . . . . . . . . . . . . . . . . . . . .

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Chapter 3. Adjustments to Income . . . . . . . . . . . 20
Individual Retirement Arrangement (IRA)
Contributions and Deductions . . . . . . . . . . . . 20
Chapter 4. Deductions . . . . . . . . . . . . . . . . . . . . 21
Standard Deduction . . . . . . . . . . . . . . . . . . . . . 21
Itemized Deductions . . . . . . . . . . . . . . . . . . . . . 22
Chapter 5. Credits . . . . . . . . . . . . . .
Credit for the Elderly or the Disabled
Child and Dependent Care Credit .
Earned Income Credit (EIC) . . . . . .

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Chapter 6. Estimated Tax . . . . . . . . . . . . . . . . . . 31
Who Must Make Estimated Tax Payments . . . . . 31
Chapter 7. How To Get Tax Help . . . . . . . . . . . . . 31
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Future Developments
For the latest information about developments related to
Pub. 554, such as legislation enacted after it was
published, go to IRS.gov/Pub554.

What's New
Standard deduction amount increased. For 2022, the
standard deduction amount has been increased for all filers. The amounts are:

• Single or Married filing separately—$12,950.
• Married filing jointly or Qualifying surviving
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spouse—$25,900.

• Head of household—$19,400.
Alternative minimum tax exemption increased. The
AMT exemption amount has increased to $75,900

($118,100 if married filing jointly or qualifying surviving
spouse; $59,050 if married filing separately).
Earned income credit. The maximum amount of income
you can earn and still get the credit has changed. You
may be able to take the credit if you earn less than:

• $16,480 ($22,610 if married filing jointly), don't have a
qualifying child, and are at least 25 years old and under age 65;

• $43,492 ($49,622 if married filing jointly), and you
have one qualifying child;

• $49,399 ($55,529 if married filing jointly), and you
have two qualifying children; or

• $53,057 ($59,187 if married filing jointly), and you

processing of your return. It also allows your designee to
perform certain actions. See your income tax return instructions for details.
Employment tax withholding. Your wages are subject
to withholding for income tax, social security tax, and
Medicare tax even if you are receiving social security benefits.
Social security benefits information. Social security
beneficiaries may quickly and easily obtain various information from the Social Security Administration’s (SSA’s)
website with a my Social Security account, including getting a replacement SSA‐1099 or SSA‐1042S. For more information, go to SSA.gov/myaccount. See Obtaining social security information, later.

Standard mileage rate. For 2022, the standard mileage
rate allowed for operating expenses for a car when you
use it for medical reasons increased to 18 cents a mile for
January 1 through June 30, 2022, and 22 cents a mile
from July 1 through December 31, 2022.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for
Missing & Exploited Children® (NCMEC). Photographs of
missing children selected by the Center may appear in
this publication on pages that would otherwise be blank.
You can help bring these children home by looking at the
photographs and calling 800-THE-LOST (800-843-5678)
if you recognize a child.

Reminders

Introduction

Qualified disaster tax relief. Special rules provide for
tax-favored withdrawals and repayments from certain retirement plans for taxpayers who suffered economic loss
as a result of a qualified disaster. See Form 8915-F,
Qualified Disaster Retirement Plan Distributions and Repayments, for more information.

The purpose of this publication is to provide a general
overview of selected topics that are of interest to older taxpayers. This publication will help you determine if you
need to file a return and, if so, what items to report on your
return. Each topic is discussed only briefly, so you will find
references to other free IRS publications that provide
more detail on these topics if you need it.
Table I has a list of questions you may have about filing
your federal tax return. To the right of each question is the
location of the answer in this publication. Also, at the back
of this publication, there is an index to help you search for
the topic you need.
While most federal income tax laws apply equally to all
taxpayers, regardless of age, there are some provisions
that give special treatment to older taxpayers. The following are some examples.

have three or more qualifying children.

For more information, see Earned Income Credit, later.

Maximum age for traditional IRA contributions. The
age restriction for contributions to a traditional IRA has
been eliminated.
Increase in age for mandatory distributions. Individuals who reach age 701/2 on January 1, 2022, or later may
delay distributions until April 1 of the year following the
year in which they turn age 72.
Form 1040-SR. Form 1040-SR, U.S. Tax Return for Seniors, was introduced in 2019. You can use this form if you
are age 65 or older at the end of 2022. The form generally
mirrors Form 1040. However, the Form 1040-SR has
larger text and some helpful tips for older taxpayers. See
the Instructions for Form 1040 for more information.
Tax return preparers. Choose your preparer carefully. If
you pay someone to prepare your return, the preparer is
required, under the law, to sign the return and fill in the
other blanks in the Paid Preparer Use Only area of your
return. Remember, however, that you are still responsible
for the accuracy of every item entered on your return. If
there is any underpayment, you are responsible for paying
it, plus any interest and penalty that may be due.
Third party designee. You can check the “Yes” box in
the Third Party Designee area of your return to authorize
the IRS to discuss your return with your preparer, a friend,
a family member, or any other person you choose. This allows the IRS to call the person you identified as your designee to answer any questions that may arise during the
Page 2

• Higher gross income threshold for filing. You

must be age 65 or older at the end of the year to get
this benefit. You are considered age 65 on the day before your 65th birthday. Therefore, you are considered
age 65 at the end of the year if your 65th birthday is on
or before January 1 of the following year.

• Higher standard deduction. If you don't itemize de-

ductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year.
You are considered age 65 at the end of the year if
your 65th birthday is on or before January 1 of the following year.

• Credit for the elderly or the disabled. If you qualify,
you may benefit from the credit for the elderly or the
disabled. To determine if you qualify and how to figure
this credit, see Credit for the Elderly or the Disabled,
later.

Publication 554 (2022)

Return preparation assistance. The IRS wants to make
it easier for you to file your federal tax return. You may find
it helpful to visit a Volunteer Income Tax Assistance
(VITA), Tax Counseling for the Elderly (TCE), or American
Association of Retired Persons (AARP) Tax-Aide site near
you.

Although we can’t respond individually to each comment received, we do appreciate your feedback and will
consider your comments and suggestions as we revise
our tax forms, instructions, and publications. Don’t send
tax questions, tax returns, or payments to the above address.

Volunteer Income Tax Assistance and Tax Counseling for the Elderly. These programs provide free
help for low-income taxpayers and taxpayers age 60 or
older to prepare and file their returns. For the VITA/TCE
site nearest you, contact your local IRS office. For more
information, see Preparing and filing your tax return under
How To Get Tax Help.

Getting answers to your tax questions. If you have
a tax question not answered by this publication or the How
To Get Tax Help section at the end of this publication, go
to the IRS Interactive Tax Assistant page at IRS.gov/
Help/ITA where you can find topics by using the search
feature or viewing the categories listed.

AARP Tax-Aide. AARP Foundation Tax-Aide offers
free tax preparation and has more than 5,000 locations in
neighborhood libraries, malls, banks, community centers,
and senior centers annually during the filing season. Visit
AARP.org/TaxAide
or
call
888-OUR-AARP
(888-687-2277) for more information.
Comments and suggestions. We welcome your comments about this publication and suggestions for future
editions.
You can send us comments through IRS.gov/
FormComments. Or, you can write to the Internal Revenue Service, Tax Forms and Publications, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224.

Publication 554 (2022)

Getting tax forms, instructions, and publications.
Go to IRS.gov/Forms to download current and prior-year
forms, instructions, and publications.
Ordering tax forms, instructions, and publications.
Go to IRS.gov/OrderForms to order current forms, instructions, and publications; call 800-829-3676 to order
prior-year forms and instructions. The IRS will process
your order for forms and publications as soon as possible.
Don’t resubmit requests you’ve already sent us. You can
get forms and publications faster online.

Page 3

Table I. What You Should Know About Federal Taxes
Note. The following is a list of questions you may have about filling out your federal income tax return.
To the right of each question is the location of the answer in this publication.
What I Should Know

Where To Find the Answer

Do I need to file a return?

See chapter 1.

Is my income taxable or nontaxable?
If it is nontaxable, must I still report it?
How do I report benefits I received from the Social
Security Administration or the Railroad Retirement Board?
Are these benefits taxable?
Must I report the sale of my home?
If I had a gain, is any part of it taxable?

See chapter 2.

See Social Security and Equivalent Railroad Retirement
Benefits in chapter 2.

See Sale of Home in chapter 2.

What are some of the items that I can deduct to reduce my
income?

See chapters 3 and 4.

How do I report the amounts I set aside for my IRA?

See Individual Retirement Arrangement Contributions
and Deductions in chapter 3.

Would it be better for me to claim the standard deduction
or itemize my deductions?

See chapter 4.

What are some of the credits I can claim to reduce my tax?

See chapter 5 for discussions on the credit for the elderly
or the disabled, the child and dependent care credit, and
the earned income credit.

Must I make estimated tax payments?

See chapter 6.

How do I contact the IRS or get more information?

See chapter 7.

Page 4

Publication 554 (2022)

1.
2022 Filing Requirements
If income tax was withheld from your pay, or if you qualify
for a refundable credit (such as the earned income credit,
the additional child tax credit, or the American opportunity
credit), you should file a return to get a refund even if you
aren't otherwise required to file a return.
Don't file a federal income tax return if you don't

TIP meet the filing requirements and aren't due a re-

fund. If you need assistance to determine if you
need to file a federal income tax return for 2022, go to
IRS.gov/ITA and use the Interactive Tax Assistant (ITA).

General Requirements
If you are a U.S. citizen or resident alien, you must file a
return if your gross income for the year was at least the

amount shown on the appropriate line in Table 1-1. For
other filing requirements, see your tax return instructions
or Pub. 501, Dependents, Standard Deduction, and Filing
Information. If you were a nonresident alien at any time
during the year, the filing requirements that apply to you
may be different from those that apply to U.S. citizens.
See Pub. 519, U.S. Tax Guide for Aliens.
Gross income. Gross income is all income you receive
in the form of money, goods, property, and services that
isn't exempt from tax. If you are married and live with your
spouse in a community property state, half of any income
defined by state law as community income may be considered yours. States with community property laws include Arizona, California, Idaho, Louisiana, Nevada, New
Mexico, Texas, Washington, and Wisconsin. A registered
domestic partner in Nevada, Washington, or California
must generally report half the combined community income of the individual and his or her domestic partner. For
more information about community property, see Pub.
555, Community Property.
For more information on what to include in gross income, see chapter 2.

Table 1-1. 2022 Filing Requirements Chart for Most Taxpayers
Note. You must file a return if your gross income was at least the amount shown in the last column.
AND at the end of 2022
you were . . .*

THEN file a return if your
gross income** was at least. . .

Single

under 65

$12,950

65 or older

$14,700

under 65

$19,400

65 or older

$21,150

under 65 (both spouses)

$25,900

65 or older (one spouse)

$27,300

65 or older (both spouses)

$28,700

.

IF your filing status is. . .

Head of household
Married filing jointly***

Married filing separately

any age

Qualifying surviving spouse

under 65

$25,900

65 or older

$27,300

*

**

***

$ 5

If you were born before January 2, 1958, you are considered to be age 65 or older at the end of 2022. (If your spouse
died in 2022 or if you are preparing a return for someone who died in 2022, see Pub. 501.)
Gross income means all income you receive in the form of money, goods, property, and services that isn't exempt from
tax, including any income from sources outside the United States or from the sale of your main home (even if you can
exclude part or all of it). It also includes gains, but not losses, reported on Form 8949 or Schedule D. Gross income from
a business means, for example, the amount on Schedule C, line 7, or Schedule F, line 9. But, in figuring gross income,
don't reduce your income by any losses, including any loss on Schedule C, line 7, or Schedule F, line 9. Don't include
any social security benefits unless (a) you are married filing separately and you lived with your spouse at any time in
2022, or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more
than $25,000 ($32,000* if married filing jointly). If (a) or (b) applies, see the Instructions for Form 1040 or Pub. 915, Social
Security and Equivalent Railroad Retirement Benefits, to figure the taxable part of social security benefits you must
include in gross income.
If you didn't live with your spouse at the end of 2022 (or on the date your spouse died) and your gross income was at
least $5, you must file a return regardless of your age.

Chapter 1

2022 Filing Requirements

Page 5

Self-employed persons. If you are self-employed in a
business that provides services (where the production,
purchase, or sale of merchandise isn't an income-producing factor), gross income from that business is the gross
receipts. If you are self-employed in a business involving
manufacturing, merchandising, or mining, gross income
from that business is the total sales minus the cost of
goods sold. In either case, you must add any income from
investments and from incidental or outside operations or
sources. See Pub. 334, Tax Guide for Small Business, for
more information.
Dependents. If you could be claimed as a dependent by
another taxpayer (that is, you meet the dependency tests
in Pub. 501), special filing requirements apply. See Pub.
501.

Decedents
A personal representative of a decedent's estate can be
an executor, administrator, or anyone who is in charge of
the decedent's property.
If you are acting as the personal representative of a
person who died during the year, you may have to file a
final return for that decedent. You also have other duties,
such as notifying the IRS that you are acting as the personal representative. Form 56, Notice Concerning Fiduciary Relationship, is available for this purpose.
When you file a return for the decedent, either as the
personal representative or as the surviving spouse, you
should enter “DECEASED,” the decedent's name, and the
date of death across the top of the tax return.
If no personal representative has been appointed by
the due date for filing the return, the surviving spouse (on
a joint return) should sign the return and enter in the signature area “Filing as surviving spouse.”
For more information, see Pub. 559, Survivors, Executors, and Administrators.
Surviving spouse. If you are the surviving spouse, the
year your spouse died is the last year for which you can
file a joint return with that spouse. After that, if you don't
remarry, you must file as a qualifying surviving spouse,
head of household, or single. For more information about
each of these filing statuses, see Pub. 501.
If you remarry before the end of the year in which your
spouse died, a final joint return with the deceased spouse
can't be filed. You can, however, file a joint return with
your new spouse. In that case, the filing status of your deceased spouse for his or her final return is married filing
separately.
The level of income that requires you to file an income tax return changes when your filing status
CAUTION changes (see Table 1-1). Even if you and your deceased spouse weren't required to file a return for several
years, you may have to file a return for tax years after the
year of death. For example, if your filing status changes
from filing jointly in 2021 to single in 2022 because of the
death of your spouse, and your gross income is $17,500

!

Page 6

Chapter 2

Taxable and Nontaxable Income

for both years, you must file a return for 2022 even though
you didn't have to file a return for 2021.

2.
Taxable and Nontaxable
Income
Generally, income is taxable unless it is specifically exempt (not taxed) by law. Your taxable income may include
compensation for services, interest, dividends, rents, royalties, income from partnerships, estate or trust income,
gain from sales or exchanges of property, and business
income of all kinds.
Under special provisions of the law, certain items are partially or fully exempt from tax. Provisions that are of special interest to older taxpayers are discussed in this chapter.

Compensation for Services
Generally, you must include in gross income everything
you receive in payment for personal services. In addition
to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options.
You don’t need to receive the compensation in cash for
it to be taxable. Payments you receive in the form of
goods or services must generally be included in gross income at their fair market value.
Volunteer work. Don't include in your gross income
amounts you receive for supportive services or reimbursements for out-of-pocket expenses under any of the following volunteer programs.

•
•
•
•

Retired Senior Volunteer Program (RSVP).
Foster Grandparent Program.
Senior Companion Program.
Service Corps of Retired Executives (SCORE).

Unemployment compensation. You must include in income all unemployment compensation you or your
spouse (if married filing jointly) received.
More information. See Pub. 525, Taxable and Nontaxable Income, for more detailed information on specific
types of income.

Retirement Plan Distributions
This section summarizes the tax treatment of amounts
you receive from traditional individual retirement arrangements (IRAs), employee pensions or annuities, and disability pensions or annuities. A traditional IRA is any IRA
that isn't a Roth or SIMPLE IRA. A Roth IRA is an individual retirement plan that can be either an account or an annuity and features nondeductible contributions and
tax-free distributions. A SIMPLE IRA is a tax-favored retirement plan that certain small employers (including
self-employed individuals) can set up for the benefit of
their employees. More detailed information can be found
in Pub. 590-A, Contributions to Individual Retirement Arrangements; Pub. 590-B, Distributions from Individual Retirement Arrangements; and Pub. 575, Pension and Annuity Income.

Individual Retirement Arrangements
(IRAs)
In general, distributions from a traditional IRA are taxable
in the year you receive them. Exceptions to the general
rule are rollovers, tax-free withdrawals of contributions,
and the return of nondeductible contributions. These are
discussed in Pub. 590-B.
If you made nondeductible contributions to a tra-

TIP ditional IRA, you must file Form 8606, Nondeduc-

tible IRAs. If you don't file Form 8606 with your return, you may have to pay a $50 penalty. Also, when you
receive distributions from your traditional IRA, the
amounts will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were
made.
Early distributions. Generally, early distributions are
amounts distributed from your traditional IRA account or
annuity before you are age 591/2, or amounts you receive
when you cash in retirement bonds before you are age
591/2. You must include early distributions of taxable
amounts in your gross income. These taxable amounts
are also subject to an additional 10% tax unless the distribution qualifies for an exception. For purposes of the additional 10% tax, an IRA is a qualified retirement plan. For
more information about this tax, see Tax on Early Distributions under Pensions and Annuities, later.
Tax benefits of a coronavirus-related distribution. If
a distribution meets the requirements to be a “coronavirus-related distribution” (defined below), you can elect to
include the taxable amounts as income ratably over 3
years and recontribute the amount of the distribution to an
eligible retirement plan within 3 years. Such distributions
are also not subject to the 10% additional tax on distributions that generally applies before age 591/2. For more information concerning the reporting of the distribution and
the ability to recontribute the distribution, see Form
8915-F and its instructions.

Coronavirus-related distribution. A coronavirus-related distribution is any distribution from an eligible retirement plan that meets the following requirements.
1. The distribution was made after December 31, 2019,
and before December 31, 2020.
2. The distribution was made to an individual that was
diagnosed with either SARS-CoV-2 or coronavirus
disease 2019 (COVID-19) by the Centers for Disease
Control and Prevention (CDCP), or whose spouse or
dependent was diagnosed with SARS-CoV-2 or
COVID-19 by the CDCP.
3. The individual, the individual’s spouse, or a member
of the individual’s household (as defined below) experienced adverse financial consequences as a result of
being quarantined, furloughed, laid off, or had work
hours reduced or a reduction in pay (or self-employment income) due to coronavirus, was unable to work
due to lack of childcare resulting from coronavirus,
closed or reduced hours of a business owned or operated by the individual, or had a job offer rescinded or
start date delayed (including for a spouse or member
of the household) due to coronavirus.
For purposes of applying the factors in (3) above, a
member of the individual’s household is someone who
shares the individual’s principal residence. See Pub. 575
and Form 8915-F and its instructions for more information.
IRA distributions as income. If the distribution meets
the “coronavirus-related distribution” definition, you can
elect to include the taxable amounts as income ratably
over 3 years and recontribute the amount of the distribution to an eligible retirement plan within 3 years.
After age 591/2. After you reach age 591/2, you can receive distributions from your traditional IRA without having
to pay the 10% additional tax.

Required Distributions
General required minimum distribution rule. If you
are the owner of a traditional IRA, you must generally receive the entire balance in your IRA or start receiving periodic distributions from your IRA by April 1 of the year following the year in which you reach age 72 (701/2 for those
individuals who reach age 701/2 before January 1, 2021).
See When Must You Withdraw Assets? (Required Minimum Distributions) in Pub. 590-B. If distributions from
your traditional IRA(s) are less than the required minimum
distribution for the year, you may have to pay a 50% excise tax for that year on the amount not distributed as required. For purposes of the 50% excise tax, an IRA is a
qualified retirement plan. For more information about this
tax, see Tax on Excess Accumulation under Pensions and
Annuities, later. See also Excess Accumulations (Insufficient Distributions) in Pub. 590-B.

Chapter 2

Taxable and Nontaxable Income

Page 7

Pensions and Annuities
Generally, if you didn't pay any part of the cost of your employee pension or annuity, and your employer didn't withhold part of the cost of the contract from your pay while
you worked, the amounts you receive each year are fully
taxable. However, see Insurance Premiums for Retired
Public Safety Officers, later.
If you paid part of the cost of your pension or annuity
plan (see Cost, later), you can exclude part of each annuity payment from income as a recovery of your cost (investment in the contract). This tax-free part of the payment is figured when your annuity starts and remains the
same each year, even if the amount of the payment
changes. The rest of each payment is taxable. However,
see Insurance Premiums for Retired Public Safety Officers, later.
You figure the tax-free part of the payment using one of
the following methods.

• Simplified Method. You must generally use this

method if your annuity is paid under a qualified plan (a
qualified employee plan, a qualified employee annuity,
or a tax-sheltered annuity plan or contract). You can't
use this method if your annuity is paid under a nonqualified plan.

• General Rule. You must use this method if your an-

nuity is paid under a nonqualified plan. You generally
can't use this method if your annuity is paid under a
qualified plan.

TIP

Contact your employer or plan administrator to
find out if your pension or annuity is paid under a
qualified or nonqualified plan.

You determine which method to use when you first begin receiving your annuity, and you continue using it each
year that you recover part of your cost.
Exclusion limit. If your annuity starting date is after
1986, the total amount of annuity income you can exclude
over the years as a recovery of the cost can't exceed your
net cost (figured without any reduction for a refund feature). Any unrecovered cost at your (or the last annuitant's) death is allowed as an “other itemized deduction”
on the final return of the decedent.
If you contributed to your pension or annuity and your
annuity starting date is before 1987, you can continue to
take your monthly exclusion for as long as you receive
your annuity. If you chose a joint and survivor annuity,
your survivor can continue to take the survivor's exclusion
figured as of the annuity starting date. The total exclusion
may be more than your cost.
Cost. Before you can figure how much, if any, of your
pension or annuity benefits are taxable, you must determine your cost in the plan (your investment in the contract). Your total cost in the plan includes everything that
you paid. It also includes amounts your employer contributed that were taxable to you when paid. However, see
Foreign employment contributions, later.
Page 8

Chapter 2

Taxable and Nontaxable Income

From this total cost, subtract any refunded premiums,
rebates, dividends, unrepaid loans, or other tax-free
amounts you received by the later of the annuity starting
date or the date on which you received your first payment.
Annuity starting date. The annuity starting date is the
later of the first day of the first period for which you received a payment from the plan or the date on which the
plan's obligations became fixed.
The amount of your contributions to the plan may

TIP be shown in box 9b of any Form 1099-R, Distribu-

tions From Pensions, Annuities, Retirement or
Profit-Sharing Plans, IRAs, Insurance Contracts, etc., that
you receive.
Foreign employment contributions. If you worked
abroad, certain amounts your employer paid into your retirement plan that weren't includible in your gross income
may be considered part of your cost. For details, see Foreign employment contributions in Pub. 575.
Withholding. The payer of your pension, profit-sharing,
stock bonus, annuity, or deferred compensation plan will
withhold income tax on the taxable part of amounts paid to
you. However, you can choose not to have tax withheld on
the payments you receive, unless they are eligible rollover
distributions. (These are distributions that are eligible for
rollover treatment but aren't paid directly to another qualified retirement plan or to a traditional IRA.) See Withholding Tax and Estimated Tax and Rollovers in Pub. 575 for
more information.
For payments other than eligible rollover distributions,
you can tell the payer how much to withhold by filing a
Form W-4P, Withholding Certificate for Periodic Pension
or Annuity Payments.
Simplified Method. Under the Simplified Method, you
figure the tax-free part of each annuity payment by dividing your cost by the total number of anticipated monthly
payments. For an annuity that is payable over the lives of
the annuitants, this number is based on the annuitants'
ages on the annuity starting date and is determined from a
table. For any other annuity, this number is the number of
monthly annuity payments under the contract.
Who must use the Simplified Method. You must
use the Simplified Method if your annuity starting date is
after November 18, 1996, and you meet both of the following conditions.
1. You receive your pension or annuity payments from a
qualified plan.
2. On your annuity starting date, at least one of the following conditions applies to you.
a. You are under age 75.
b. You are entitled to less than 5 years of guaranteed
payments.
If your annuity starting date is after July 1, 1986, and
before November 19, 1996, and you previously chose to
use the Simplified Method, you must continue to use it
each year that you recover part of your cost. You could

have chosen to use the Simplified Method if your annuity
is payable for your life (or the lives of you and your survivor annuitant) and you met both of the conditions listed
above.

temporary annuity payable to the annuitant's child under
age 25.

Guaranteed payments. Your annuity contract provides guaranteed payments if a minimum number of payments or a minimum amount (for example, the amount of
your investment) is payable even if you and any survivor
annuitant don't live to receive the minimum. If the minimum amount is less than the total amount of the payments you are to receive, barring death, during the first 5
years after payments begin (figured by ignoring any payment increases), you are entitled to less than 5 years of
guaranteed payments.

ceived annuity payments last year and used last
year's worksheet to figure your taxable annuity. Instead,
enter the amount from line 4 of last year's worksheet on
line 4 of this year's worksheet.

Who can't use the Simplified Method. You can't use
the Simplified Method and must use the General Rule if
you receive pension or annuity payments from:

• A nonqualified plan, such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan; or

• A qualified plan if you are age 75 or older on your annuity starting date and you are entitled to at least 5
years of guaranteed payments (defined above).

In addition, you had to use the General Rule for either
circumstance described above if your annuity starting
date is after July 1, 1986, and before November 19, 1996.
You also had to use it for any fixed-period annuity. If you
didn't have to use the General Rule, you could have
chosen to use it. You also had to use the General Rule for
payments from a qualified plan if your annuity starting
date is before July 2, 1986, and you didn't qualify to use
the Three-Year Rule.
If you had to use the General Rule (or chose to use it),
you must continue to use it each year that you recover
your cost.
Unless your annuity starting date was before 1987,
once you have recovered all of your nontaxable investment, all of each remaining payment you receive is fully
taxable. Once your remaining payments are fully taxable,
there is no longer a concern with the General Rule or Simplified Method.
Complete information on the General Rule, including
the actuarial tables you need, is contained in Pub. 939,
General Rule for Pensions and Annuities.
How to use the Simplified Method. Complete the
Simplified Method Worksheet in the Instructions for Form
1040 or Instructions for Form 1040-NR, or in Pub. 575 to
figure your taxable annuity for 2022. Be sure to keep the
completed worksheet; it will help you figure your taxable
annuity next year.
To complete line 3 of the worksheet, you must determine the total number of expected monthly payments for
your annuity. How you do this depends on whether the annuity is for a single life, multiple lives, or a fixed period. For
this purpose, treat an annuity that is payable over the life
of an annuitant as payable for that annuitant's life even if
the annuity has a fixed-period feature or also provides a

You don't need to complete line 3 of the work-

TIP sheet or make the computation on line 4 if you re-

Single-life annuity. If your annuity is payable for your
life alone, use Table 1 at the bottom of the worksheet to
determine the total number of expected monthly payments. Enter on line 3 the number shown for your age on
your annuity starting date. This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996.
Multiple-lives annuity. If your annuity is payable for
the lives of more than one annuitant, use Table 2 at the
bottom of the worksheet to determine the total number of
expected monthly payments. Enter on line 3 the number
shown for the annuitants' combined ages on the annuity
starting date. For an annuity payable to you as the primary
annuitant and to more than one survivor annuitant, combine your age and the age of the youngest survivor annuitant. For an annuity that has no primary annuitant and is
payable to you and others as survivor annuitants, combine
the ages of the oldest and youngest annuitants. Don't treat
as a survivor annuitant anyone whose entitlement to payments depends on an event other than the primary annuitant's death.
However, if your annuity starting date is before 1998,
don't use Table 2 and don't combine the annuitants' ages.
Instead, you must use Table 1 at the bottom of the worksheet and enter on line 3 the number shown for the primary annuitant's age on the annuity starting date. This
number will differ depending on whether your annuity
starting date is before November 19, 1996, or after November 18, 1996.
Fixed-period annuities. If your annuity doesn't depend in whole or in part on anyone's life expectancy, the
total number of expected monthly payments to enter on
line 3 of the worksheet is the number of monthly annuity
payments under the contract.
Line 6. The amount on line 6 should include all
amounts that could have been recovered in prior years. If
you didn't recover an amount in a prior year, you may be
able to amend your returns for the affected years.
Be sure to keep a copy of the completed work-

TIP sheet; it will help you figure your taxable annuity in
later years.

Example. Jean Smith, age 65, began receiving retirement benefits in 2022, under a joint and survivor annuity.
Jean's annuity starting date is January 1, 2022. The benefits are to be paid over the joint lives of Jean and their
spouse, Courtney, age 65. Jean had contributed $31,000
to a qualified plan and had received no distributions before the annuity starting date. Jean is to receive a
Chapter 2

Taxable and Nontaxable Income

Page 9

retirement benefit of $1,200 a month, and Courtney is to
receive a monthly survivor benefit of $600 upon Jean's
death.
Jean must use the Simplified Method to figure their taxable annuity because the payments are from a qualified
plan and they are under age 75. You can find a blank version of this worksheet in Pub. 575.
Survivors of retirees. Benefits paid to you as a survivor
under a joint and survivor annuity must be included in your
gross income in the same way the retiree would have included them in gross income.
If you receive a survivor annuity because of the death
of a retiree who had reported the annuity under the
Three-Year Rule, include the total received in your income. The retiree's cost has already been recovered tax
free.
If the retiree was reporting the annuity payments under
the General Rule, you must apply the same exclusion percentage the retiree used to your initial payment called for
in the contract. The resulting tax-free amount will then remain fixed. Any increases in the survivor annuity are fully
taxable.
If the retiree was reporting the annuity payments under
the Simplified Method, the part of each payment that is tax
free is the same as the tax-free amount figured by the retiree at the annuity starting date. See Simplified Method,
earlier.
How to report. If you file Form 1040, 1040-SR, or
1040-NR, report your total annuity on line 5a, and the taxable part on line 5b. If your pension or annuity is fully taxable, enter it on line 5b. Don't make an entry on line 5a.
Example. You are a Form 1040 or 1040-SR filer and
you received monthly payments totaling $1,200 (12
months x $100) during 2022 from a pension plan that was
completely financed by your employer. You had paid no
tax on the payments that your employer made to the plan,
and the payments weren't used to pay for accident,
health, or long-term care insurance premiums (as discussed later under Insurance Premiums for Retired Public
Safety Officers). The entire $1,200 is taxable. You include
$1,200 only on Form 1040 or 1040-SR, line 5b.
Joint return. If you file a joint return and you and your
spouse each receive one or more pensions or annuities,
report the total of the pensions and annuities on line 5a of
Form 1040, 1040-SR, or 1040-NR. Report the total of the
taxable parts on line 5b of Form 1040, 1040-SR, or
1040-NR.
Form 1099-R. You should receive a Form 1099-R for
your pension or annuity. Form 1099-R shows your pension or annuity for the year and any income tax withheld.
You should receive a Form W-2, Wage and Tax Statement, if you receive distributions from certain nonqualified
plans.
You must attach Forms 1099-R or Forms W-2 to
your 2022 tax return if federal income tax was
CAUTION withheld. Generally, you should be sent these
forms by January 31, 2023.

!

Page 10

Chapter 2

Taxable and Nontaxable Income

Nonperiodic Distributions
If you receive a nonperiodic distribution from your retirement plan, you may be able to exclude all or part of it from
your income as a recovery of your cost. Nonperiodic distributions include cash withdrawals, distributions of current
earnings (dividends) on your investment, and certain
loans. For information on how to figure the taxable amount
of a nonperiodic distribution, see Taxation of Nonperiodic
Payments in Pub. 575.

!

CAUTION

The taxable part of a nonperiodic distribution may
be subject to an additional 10% tax. See Tax on
Early Distributions, later.

Lump-sum distributions. If you receive a lump-sum distribution from a qualified employee plan or qualified employee annuity and the plan participant was born before
January 2, 1936, you may be able to elect optional methods of figuring the tax on the distribution. The part from
active participation in the plan before 1974 may qualify as
capital gain subject to a 20% tax rate. The part from participation after 1973 (and any part from participation before 1974 that you don't report as capital gain) is ordinary
income. You may be able to use the 10-year tax option
(explained in Pub. 575) to figure tax on the ordinary income part.
Form 1099-R. If you receive a total distribution from a
plan, you should receive a Form 1099-R. If the distribution
qualifies as a lump-sum distribution, box 3 shows the capital gain part of the distribution. The amount in box 2a,
Taxable amount, minus the amount in box 3, Capital gain,
is the ordinary income part.
More information. For more detailed information on
lump-sum distributions, see Pub. 575 or Form 4972, Tax
on Lump-Sum Distributions.

Tax on Early Distributions
Most distributions you receive from your qualified retirement plan and nonqualified annuity contracts before you
reach age 591/2 are subject to an additional tax of 10%.
The tax applies to the taxable part of the distribution.
For this purpose, a qualified retirement plan is:

• A qualified employee plan (including a qualified cash

or deferred arrangement (CODA) under Internal Revenue Code section 401(k)),

• A qualified employee annuity plan,
• A tax-sheltered annuity plan (section 403(b) plan),
• An eligible state or local government section 457 de-

ferred compensation plan (to the extent that any distribution is attributable to amounts the plan received in a
direct transfer or rollover from one of the other plans
listed here or an IRA), or

• An IRA.

You may have to pay a 25%, rather than a 10%,
additional tax if you receive distributions from a
CAUTION SIMPLE IRA before you are age 591/2. See Pub.
560, Retirement Plans for Small Business (SEP, SIMPLE,
and Qualified Plans).

!

General exceptions to tax. The early distribution tax
doesn't apply to any distributions that are:

• Made as part of a series of substantially equal periodic
payments (made at least annually) for your life (or life
expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a
qualified retirement plan, the payments must begin after separation from service);

• Made because you are totally and permanently disabled;

• Made on or after the death of the plan participant or
contract holder.

Reporting tax. If you owe the tax on early distributions,
you must generally attach Form 5329, Additional Taxes on
Qualified Plans (Including IRAs) and Other Tax-Favored
Accounts, to your 2022 income tax return. If you don’t
have to file a 2022 income tax return, you may file Form
5329 by itself. See the Instructions for Form 5329. In addition, you don’t have to attach Form 5329 to your income
tax return if distribution code 1 (early distribution, no
known exception) is correctly shown in box 7 of all your
Forms 1099-R, and you owe the additional tax on each
Form 1099-R. Instead, multiply the taxable part of the
early distribution by 10% (0.10) and enter the result on
Schedule 2 (Form 1040), line 8. See the instructions for
Schedule 2 (Form 1040), line 8, for more information
about reporting the early distribution tax.

Tax on Excess Accumulation
To make sure that most of your retirement benefits are
paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that you receive
from qualified retirement plans must begin no later than
your required beginning date. Unless the rule for 5% owners applies, this is generally April 1 of the year that follows
the later of:

• The calendar year in which you reach age 701/2, or
• The calendar year in which you retire from employment with the employer maintaining the plan.

However, your plan may require you to begin to receive
payments by April 1 of the year that follows the year in
which you reach age 701/2, even if you haven't retired.
For this purpose, a qualified retirement plan includes:

•
•
•
•

A qualified employee plan,
A qualified employee annuity plan,
An eligible section 457 deferred compensation plan,
A tax-sheltered annuity plan (section 403(b) plan) (for
benefits accruing after 1986), or

• An IRA.
An excess accumulation is the undistributed re-

TIP mainder of the required minimum distribution that
was left in your qualified retirement plan.

5% owners. If you are a 5% owner, see Pub. 575 for
more information on distribution dates.
Amount of tax. If you don't receive the required minimum distribution, you are subject to an additional tax. The
tax equals 50% of the difference between the amount that
must be distributed and the amount that was distributed
during the tax year. You can get this excise tax excused if
you establish that the shortfall in distributions was due to
reasonable error and that you are taking reasonable steps
to remedy the shortfall.
Form 5329. You must file a Form 5329 if you owe a tax
because you didn't receive a minimum required distribution from your qualified retirement plan.
Additional information. For more detailed information
on the tax on excess accumulation, see Pub. 575.

Insurance Premiums for Retired Public
Safety Officers
If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude
from income distributions made from your eligible retirement plan that are used to pay the premiums for accident
or health insurance or long-term care insurance. The premiums can be for coverage for you, your spouse, or dependent(s). The distribution must be made directly from
the plan to the insurance provider. You can exclude from
income the smaller of the amount of the insurance premiums or $3,000. You can only make this election for
amounts that would otherwise be included in your income.
The amount excluded from your income can't be used to
claim a medical expense deduction.
An eligible retirement plan is a governmental plan that
is a:

•
•
•
•

Qualified trust,
Section 403(a) plan,
Section 403(b) annuity, or
Section 457(b) plan.

If you make this election, reduce the otherwise taxable
amount of your pension or annuity by the amount excluded. The taxable amount shown in box 2a of any Form
1099-R that you receive doesn't reflect the exclusion. Report your total distributions on Form 1040, 1040-SR, or
1040-NR, line 5a. Report the taxable amount on Form
1040, 1040-SR, or 1040-NR, line 5b. Enter “PSO” next to
the appropriate line on which you report the taxable
amount.

Chapter 2

Taxable and Nontaxable Income

Page 11

Railroad Retirement Benefits
Benefits paid under the Railroad Retirement Act fall into
two categories. These categories are treated differently
for income tax purposes.
Social security equivalent benefits. The first category
is the amount of tier 1 railroad retirement benefits that
equals the social security benefit that a railroad employee
or beneficiary would have been entitled to receive under
the social security system. This part of the tier 1 benefit is
the social security equivalent benefit (SSEB) and is treated for tax purposes like social security benefits. (See Social Security and Equivalent Railroad Retirement Benefits,
later.)
Non-social security equivalent benefits. The second
category contains the rest of the tier 1 benefits, called the
non-social security equivalent benefit (NSSEB). It also
contains any tier 2 benefit, vested dual benefit (VDB), and
supplemental annuity benefit. This category of benefits is
treated as an amount received from a qualified employee
plan. This allows for the tax-free (nontaxable) recovery of
employee contributions from the tier 2 benefits and the
NSSEB part of the tier 1 benefits. VDBs and supplemental
annuity benefits are non-contributory pensions and are
fully taxable.
More information. For more information about railroad
retirement benefits, see Pub. 575.

Military Retirement Pay
Military retirement pay based on age or length of service
is taxable and must be included in income as a pension
on Form 1040, 1040-SR, or 1040-NR, lines 5a and 5b.
But, certain military and government disability pensions
that are based on a percentage of disability from active
service in the U.S. Armed Forces of any country generally
aren't taxable. For more information, including information
about veterans' benefits and insurance, see Pub. 525.

Social Security and Equivalent
Railroad Retirement Benefits
This discussion explains the federal income tax rules for
social security benefits and equivalent tier 1 railroad retirement benefits.
Social security benefits include monthly retirement, survivor, and disability benefits. They don't include supplemental security income (SSI) payments, which aren't taxable.
Equivalent tier 1 railroad retirement benefits are the
part of tier 1 benefits that a railroad employee or beneficiary would have been entitled to receive under the social
security system. They are commonly called the social security equivalent benefit (SSEB) portion of tier 1 benefits.
If you received these benefits during 2022, you should
have received a Form SSA-1099 or Form RRB-1099
Page 12

Chapter 2

Taxable and Nontaxable Income

(Form SSA-1042S or Form RRB-1042S if you are a nonresident alien) showing the amount of the benefits.

Social Security Information
Obtaining social security information. Social security
beneficiaries may quickly and easily obtain various information from the SSA's website with a my Social Security
account to:

• Keep track of your earnings and verify them every
year,

• Get an estimate of your future benefits if you are still
working,

• Get a letter with proof of your benefits if you currently
receive them,

•
•
•
•

Change your address,
Start or change your direct deposit,
Get a replacement Medicare card, and
Get a replacement SSA-1099 or SSA-1042S for the
tax season.

For more information and to set up an account, go to
SSA.gov/myaccount.

Are Any of Your Benefits Taxable?
Note. When the term “benefits” is used in this section,
it applies to both social security benefits and the SSEB
portion of tier 1 railroad retirement benefits.
To find out whether any of your benefits may be taxable, compare the base amount for your filing status (explained later) with the total of:

• One-half of your benefits; plus
• All your other income, including tax-exempt interest.
When making this comparison, don't reduce your other
income by any exclusions for:

•
•
•
•

Interest from qualified U.S. savings bonds,
Employer-provided adoption benefits,
Foreign earned income or foreign housing, or
Income earned in American Samoa or Puerto Rico by
bona fide residents.

Figuring total income. To figure the total of one-half of
your benefits plus your other income, use Worksheet 2-B.
If that total amount is more than your base amount, part of
your benefits may be taxable.
If you are married and file a joint return for 2022, you
and your spouse must combine your incomes and your
benefits to figure whether any of your combined benefits
are taxable. Even if your spouse didn't receive any benefits, you must add your spouse's income to yours to figure
whether any of your benefits are taxable.

Worksheet 2-B. A Quick Way To Check if Your Benefits May
Be Taxable
A.

Keep for Your Records

Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Include
the full amount of any lump-sum benefit payments received in 2022, for 2022 and
earlier years. (If you received more than one form, combine the amounts from box 5
and enter the total.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A.

Note. If the amount on line A is zero or less, stop here; none of your benefits are
taxable this year.
B.

Enter one-half of the amount on line A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B.

C.

Enter your taxable pensions, wages, interest, dividends, and other taxable income . . . . . . . .

C.

D.

Enter any tax-exempt interest income (such as interest on municipal bonds) plus any
exclusions from income for:
• Interest from qualified U.S. savings bonds,
• Employer-provided adoption benefits,
• Foreign earned income or foreign housing, or
• Income earned in American Samoa or Puerto Rico by bona fide residents . . . . . . . . . . . . . .

D.

E.

Add lines B, C, and D and enter the total

..........................................

E.

F.

If you are:
• Married filing jointly, enter $32,000;
• Single, head of household, qualifying surviving spouse, or married filing separately and
you
lived apart from your spouse for all of 2022, enter $25,000; or
• Married filing separately and you lived with your spouse at any time during 2022,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F.

G.

Is the amount on line F less than or equal to the amount on line E?
No. None of your benefits are taxable this year.
Yes. Some of your benefits may be taxable. To figure how much of your benefits
are taxable, see Which worksheet to use under How Much Is Taxable.

If the only income you received during 2022 was

TIP your social security or the SSEB portion of tier 1

railroad retirement benefits, your benefits generally aren't taxable and you probably don't have to file a return. If you have income in addition to your benefits, you
may have to file a return even if none of your benefits are
taxable.

Base Amount
Your base amount is:

• $25,000 if you are single, head of household, or qualifying surviving spouse;

• $25,000 if you are married filing separately and lived
apart from your spouse for all of 2022;

• $32,000 if you are married filing jointly; or
• $0 if you are married filing separately and lived with
your spouse at any time during 2022.

Repayment of Benefits
Any repayment of benefits you made during 2022 must be
subtracted from the gross benefits you received in 2022. It
doesn't matter whether the repayment was for a benefit
you received in 2022 or in an earlier year. If you repaid
more than the gross benefits you received in 2022, see
Repayments More Than Gross Benefits, later.

Your gross benefits are shown in box 3 of Form
SSA-1099 or Form RRB-1099. Your repayments are
shown in box 4. The amount in box 5 shows your net benefits for 2022 (box 3 minus box 4). Use the amount in
box 5 to figure whether any of your benefits are taxable.

Tax Withholding and Estimated Tax
You can choose to have federal income tax withheld from
your social security and/or the SSEB portion of your tier 1
railroad retirement benefits. If you choose to do this, you
must complete a Form W-4V, Voluntary Withholding Request.
If you don't choose to have income tax withheld, you
may have to request additional withholding from other income, or pay estimated tax during the year. For details,
see Pub. 505, Tax Withholding and Estimated Tax, or the
Instructions for Form 1040-ES, Estimated Tax for Individuals.

How Much Is Taxable?
If part of your benefits is taxable, how much is taxable depends on the total amount of your benefits and other income. Generally, the higher that total amount, the greater
the taxable part of your benefits.

Chapter 2

Taxable and Nontaxable Income

Page 13

Maximum taxable part. The taxable part of your benefits usually can't be more than 50%. However, up to 85%
of your benefits can be taxable if either of the following situations applies to you.

• The total of one-half of your benefits and all your other
income is more than $34,000 ($44,000 if you are married filing jointly).

• You are married filing separately and lived with your
spouse at any time during 2022.

If you are a nonresident alien, 85% of your benefits are
taxable. However, this income is exempt under some tax
treaties.
Which worksheet to use. A worksheet to figure your
taxable benefits is in the Instructions for Form 1040. However, you will need to use a different worksheet(s) if any of
the following situations applies to you.
1. You contributed to a traditional IRA and you or your
spouse were covered by a retirement plan at work. In
this situation, you must use the special worksheets in
Pub. 590-A to figure both your IRA deduction and
your taxable benefits.
2. Situation (1) doesn't apply and you take one or more
of the following exclusions.

• Interest from qualified U.S. savings bonds (Form

8815, Exclusion of Interests From Series EE and I
U.S. Savings Bonds Issued After 1989).

• Employer-provided adoption benefits (Form 8839,
Qualified Adoption Expenses).

• Foreign earned income or housing (Form 2555,
Foreign Earned Income).

• Income earned in American Samoa (Form 4563,

Exclusion of Income for Bona Fide Residents of
American Samoa) or Puerto Rico by bona fide
residents.
In these situations, you must use Worksheet 1 in
Pub. 915, Social Security and Equivalent Railroad Retirement Benefits, to figure your taxable benefits.
3. You received a lump-sum payment for an earlier year.
In this situation, also complete Worksheet 2 or 3 and
Worksheet 4 in Pub. 915. See Lump-Sum Election,
later.

How To Report Your Benefits
If part of your benefits is taxable, you must use Form
1040, 1040-SR, or 1040-NR.
Reporting on Form 1040 or 1040-SR. Report your net
benefits (the amount in box 5 of your Form SSA-1099 or
Form RRB-1099) on line 6a and the taxable part on
line 6b. If you are married filing separately and you lived
apart from your spouse for all of 2022, also enter “D” to
the right of the word “benefits” on line 6a.
Reporting on Form 1040-NR. Report 85% of the total
amount of your benefits (box 5 of your Form SSA-1042S
Page 14

Chapter 2

Taxable and Nontaxable Income

or Form RRB-1042S) in the appropriate column of Schedule NEC (Form 1040-NR), line 8.
Benefits not taxable. Report your net benefits (the
amount in box 5 of your Form SSA-1099 or Form
RRB-1099) on Form 1040 or 1040-SR, line 6a. Enter -0on Form 1040 or 1040-SR, line 6b. If you are married filing
separately and you lived apart from your spouse for all of
2022, also enter “D” to the right of the word “benefits” on
Form 1040 or 1040-SR, line 6a.

Lump-Sum Election
You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2022 in your 2022 income, even if the payment includes benefits for an earlier
year.
This type of lump-sum benefit payment shouldn't

TIP be confused with the lump-sum death benefit that

both the SSA and Railroad Retirement Board
(RRB) pay to many of their beneficiaries. No part of the
lump-sum death benefit is subject to tax. For more information about the lump-sum death benefit, visit the SSA
website at SSA.gov, and use keyword: “death benefit.”
Generally, you use your 2022 income to figure the taxable part of the total benefits received in 2022. However,
you may be able to figure the taxable part of a lump-sum
payment for an earlier year separately, using your income
for the earlier year. You can elect this method if it lowers
your taxable benefits. See Pub. 915 for more information.

Repayments More Than Gross
Benefits
In some situations, your Form SSA-1099 or Form
RRB-1099 will show that the total benefits you repaid
(box 4) are more than the gross benefits (box 3) you received. If this occurred, your net benefits in box 5 will be a
negative figure (a figure in parentheses) and none of your
benefits will be taxable. If you receive more than one form,
a negative figure in box 5 of one form is used to offset a
positive figure in box 5 of another form for that same year.
If you have any questions about this negative figure,
contact your local SSA office or your local U.S. RRB field
office.
Joint return. If you and your spouse file a joint return,
and your Form SSA-1099 or RRB-1099 has a negative
figure in box 5 but your spouse's doesn't, subtract the
box 5 amount on your form from the box 5 amount on your
spouse's form. You do this to get your net benefits when
figuring if your combined benefits are taxable.
Repayment of benefits received in an earlier year. If
the total amount shown in box 5 of all of your Forms
SSA-1099 and RRB-1099 is a negative figure, you may be
able to take an itemized deduction for the part of this negative figure that represents benefits you included in gross
income in an earlier year.

The deduction must be more than $3,000 and you have
to follow some special instructions. See Pub. 915 for
those instructions.

Sickness and Injury Benefits
Generally, you must report as income any amount you receive for personal injury or sickness through an accident
or health plan that is paid for by your employer. If both you
and your employer pay for the plan, only the amount you
receive that is due to your employer's payments is reported as income. However, certain payments may not be
taxable to you. Some of these payments are discussed
later in this section. Also, see Military and Government
Disability Pensions and Other Sickness and Injury Benefits in Pub. 525.
Cost paid by you. If you pay the entire cost of an accident or health plan, don't include any amounts you receive
from the plan for personal injury or sickness as income on
your tax return. If your plan reimbursed you for medical
expenses you deducted in an earlier year, you may have
to include some, or all, of the reimbursement in your income.

Disability Pensions
If you retired on disability, you must include in income any
disability pension you receive under a plan that is paid for
by your employer. You must report your taxable disability
payments as wages on Form 1040, 1040-SR, or
1040-NR, line 1a, until you reach minimum retirement
age. Minimum retirement age is generally the age at
which you can first receive a pension or annuity if you
aren't disabled.
If you were age 65 or older by the end of 2022 or

TIP you were retired on permanent and total disability

payments as a disability pension. The payments must be
reported as a pension or annuity.
Accrued leave payment. If you retire on disability, any
lump-sum payment you receive for accrued annual leave
is a salary payment. The payment isn't a disability payment. Include it in your income in the tax year you receive
it.

Long-Term Care Insurance Contracts
In most cases, long-term care insurance contracts are
treated as accident and health insurance contracts.
Amounts you receive from them (other than policyholder
dividends or premium refunds) are generally excludable
from income as amounts received for personal injury or
sickness. However, the amount you can exclude may be
limited. Long-term care insurance contracts are discussed
in more detail in Pub. 525.

Workers' Compensation
Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if
they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. The exemption also applies to your survivors. The exemption,
however, doesn't apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury.
If part of your workers' compensation reduces
your social security or equivalent railroad retireCAUTION ment benefits, that part is considered social security (or equivalent railroad retirement) benefits and may
be taxable. For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier.

!

and received taxable disability income, you may
be able to claim the credit for the elderly or the disabled.
See Credit for the Elderly or the Disabled, later. For more
information on this credit, see Pub. 524, Credit for the Elderly or the Disabled.

Return to work. If you return to work after qualifying for
workers' compensation, salary payments you receive for
performing light duties are taxable as wages.

Beginning on the day after you reach minimum retirement age, payments you receive are tax