Updated October 19, 2026. Quick answer: On Form RRB-1099-R, box 3 shows the railroad employee’s contributions, the cost that Publication 575 says you use to figure the tax-free part of the pension, and box 4 shows the contributory amount paid. If box 3 is blank, Publication 575 says the box 4 amount is fully taxable. The publication tells readers with a cost to recover to the section on partly taxable payments.
The two kinds of railroad benefits behind this form
Publication 575 sorts railroad retirement benefits into two categories. The second is the one this form covers: “The second category contains the rest of the tier 1 railroad retirement benefits called the non-social security equivalent benefit (NSSEB).” It adds that this category “also contains any tier 2 benefit, vested dual benefit (VDB), and supplemental annuity benefit.”
The publication then says how to treat them: “Treat this category of benefits, shown on Form RRB-1099-R, as an amount received from a qualified employee plan.” Background on the tiers is in how railroad retirement works and tier 1 and tier 2 railroad retirement taxation, and the other boxes on this form are in the Form RRB-1099-R boxes guide.
What box 3 and box 4 report
Both boxes are described in the publication’s box-by-box discussion, which starts with the sentence “The following discussion explains the items shown on Form RRB-1099-R.”
| Item | What Publication 575 says |
|---|---|
| Box 3, what it is | “This is the amount of taxes withheld from the railroad employee’s earnings that exceeds the amount of taxes that would have been withheld had the earnings been covered under the social security system.” |
| Box 3, what it is used for | “This amount is the employee’s cost that you use to figure the tax-free part of the NSSEB and tier 2 benefit you received” |
| Box 3, when blank | “If this box is blank, it means that the amount of your NSSEB and tier 2 payments shown in box 4 is fully taxable.” |
| Box 4, what it is | “This is the gross amount of the NSSEB and tier 2 benefit you received in 2025, less any 2025 benefits you repaid in 2025.” |
| Box 4, how much is taxable | “It may be partly taxable and partly tax free or fully taxable.” |
Box 3 is the cost side and box 4 is the payment side. The cost recovery idea is why the publication treats the pension like one received from a qualified employee plan: it says this treatment “allows for the tax-free (nontaxable) recovery of employee contributions from the tier 2 benefits and the NSSEB part of the tier 1 benefits.”
How box 3 changes from year to year
The publication warns that the number can move: “The amount shown is the total employee contribution amount, not reduced by any amounts that the RRB calculated as previously recovered.” It continues: “It is the latest amount reported for 2025 and may have increased or decreased from a previous Form RRB-1099-R.” For a change, it says “the change is retroactive.” If you have a copy of an earlier form with a different box 3, the later figure is the one the publication treats as current.
What box 4 combines
The publication explains that the two benefit types appear as one number: “The NSSEB and tier 2 benefits, less certain repayments, are combined into one amount called the Contributory Amount Paid on Form RRB-1099-R.” Repayments from earlier years are not netted in this box. The publication says repayments made in 2025 for an earlier year or an unknown year “are shown in box 8.” That box is explained in Form RRB-1099-R boxes 7 to 12.
Using box 3 as the cost
The publication points the reader to a different section for the arithmetic. For box 3 it says, “For information on how to figure the tax-free part, see Partly Taxable Payments under Taxation of Periodic Payments, later.” For box 4 it says: “If you determine you are eligible to compute a tax-free part, as explained later in Partly Taxable Payments under Taxation of Periodic Payments, use the latest reported employee contribution amount shown in box 3 as the cost.” This page does not walk through that method; the publication’s own section does. Where the pension amount is reported on the return is covered in Form 1040 lines 5a and 5b.
Edition and box numbers
This page reads the IRS’s description of Form RRB-1099-R in Publication 575 for 2025 returns (the box numbers and labels printed there). The form itself is issued by the Railroad Retirement Board, not the IRS, so the year and layout on the form you received govern; check the year printed on it.
Common mistakes
- Treating a blank box 3 as an error. The publication says “If this box is blank, it means that the amount of your NSSEB and tier 2 payments shown in box 4 is fully taxable.”
- Using an older year’s box 3 as the cost. The publication says the figure “is the latest amount reported for 2025 and may have increased or decreased from a previous Form RRB-1099-R.”
- Looking for the VDB or supplemental annuity inside box 4. The publication says that category “also contains any tier 2 benefit, vested dual benefit (VDB), and supplemental annuity benefit.” but box 4 combines only “The NSSEB and tier 2 benefits, less certain repayments”
Related: how railroad retirement works, tier 1 and tier 2 railroad retirement taxation, and Form 1040 lines 5a and 5b.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Get advisor help with railroad pension taxes
For U.S. investors with $250,000 or more in investable assets. WiserAdvisor is an independent service matching you with 2 to 3 vetted advisers. Its form asks for your ZIP code and answers to a few questions; a match is not guaranteed.
Free to request, with no obligation to hire. By submitting, you consent to calls, texts and emails from WiserAdvisor and up to three advisers. Advisers pay for introductions.
Clear Money Guide may earn a referral payment for a qualifying completed form. An introduction is not a Clear Money Guide recommendation.
Opens on WiserAdvisor’s site in a new tab.
Explore retirement income planning options for you
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment for a qualifying submitted form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- Publication 575, Pension and Annuity Income (2025 returns): https://www.irs.gov/pub/irs-pdf/p575.pdf
- IRS: About Publication 575: https://www.irs.gov/forms-pubs/about-publication-575
Read from the IRS documents linked above on October 19, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.