Some taxpayers have to pay federal income tax on their Social Security benefits. This usually happens when the taxpayer has other substantial income such as wage, self-employment, interest, dividend, or any other taxable income in addition to their Social Security benefits.
Taxpayers will receive a Form SSA-1099 showing the amount of benefits they received for the previous year. The Social Security Benefits worksheet is used to determine the amount of social security income that is taxable.
To enter Social Security Benefits in Keystone Tax Solutions Pro, from the Main Menu of the Tax Return (Form 1040) select:
- Income Menu
- Social Security Benefits (1099-SSA, RRB-1099)
- Select either Taxpayer’s Net SS Benefits from 1099-SSA & RRB-1099 or Spouse’s Net SS Benefits from 1099-SSA & RRB-1099, as appropriate
- Net SS Benefits from 1099-SSA & RRB-1099 – enter the amount in Box 5
- Deductible Medicare A, B & D Premiums – enter the amount in SSA-1099 Box 3
- Federal Tax Withheld – enter the amount in SSA-1099 Box 7 or RRB-1099 Box 10
Additional menu lines that may need to be completed:
- Taxpayer’s / Spouse’s Exempt SS Benefits – If any of the benefits reported above are exempt by treaty, enter the exempt amount as a positive number.
- Total of any Exclusions/Adjustments – This field is already prepopulated with amounts from Form 8839, Form 2555, and Form 4563, if any. An additional adjustment line is provided if needed.
- SSA Lump-Sum Payment Worksheet
- Net SS Benefits from SSA-1042S – if the taxpayer received Form SSA-1042S, enter the required amounts here.
- Net SS Benefits from RRB-1042S – if the taxpayer received Form RRB-1042S, enter the required amounts here.
- Attach Green Card PDFs
Attach Signed Declaration PDFs – Green card holders, i.e., lawful permanent residents, are not subject to 30% withholding tax. Withholding tax withheld in error can be refunded by the Social Security Administration in the same calendar year or in a subsequent year by the IRS by filing Form 1040. The tax return will need to include a copy of the form SSA-1042S, a copy of the taxpayer’s green card, and a signed declaration stating why tax should not have been withheld. The exact wording of the declaration can be found in Publication 915. Use these two menu lines to attach PDF copies of the latter two documents.
Note: A return containing SSA-1042S or RRB-1042S benefits must have the above two PDFs attached or it will reject.
To view the Social Security Benefits Worksheet at the Social Security Menu, click the “View” icon (or prior to 2019, the black magnifying glass icon) in the toolbar at the top of the window.
NOTE: This is a guide on entering Form SSA-1099 and RRB-1099 into Keystone Tax Solutions Pro. This is not intended as tax advice.
Additional Information:
IRS – Are Your Social Security Benefits Taxable?
Publication 915, Social Security and Equivalent Railroad Retirement Benefits