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shall be charged to each succeeding this paragraph) for any taxable year if month in such year to the extent of such taxable year begins after 1956. In the annuity payable for such month determining whether an individual has until the total of such excess earn- rendered such substantial services in a ings has been so charged or until month, the particular facts in his case every month to which the excess earn- will be examined. The following factors, ings are chargeable has been charged among others, will be considered in makwith such excess earnings. The phrase ing the determination: "first month of the taxable year” means (i) The amount of time devoted to the earliest month in such year to which the trade or business; the charging of excess earnings is not (ii) The nature of the services renprohibited by the provisions of subpara- dered by the individual; graph (4) of this paragraph.
(iii) The relationship of the activity (4) Months to which excess earnings performed prior to the period of retirecannot be charged. Notwithstanding the ment with that performed subsequent to provisions of subparagraph (3) of this retirement; paragraph, excess earnings determined
(iv) The setting in which the serv. in accordance with subparagraph (1) of
ices were performed, including: this paragraph shall not be charged to
(a) The presence or absence of a paid any month:
manager, a partner, or a family member (i) In which the individual was not en
who manages the business; titled to an annuity;
(b) The type of business establishment (ii) In which the individual was 72 that is involved; years of age or over;
(c) The amount of capital invested in (iii) In which the individual was en
the trade or business; and titled to a child's insurance annuity un
(d) The seasonal nature of the trade der $ 237.409 based on a disability; or
or business. (iv) In which the individual did not
(6) Definition of earnings. When the engage in self-employment and did not
term "earnings" is used in this paragraph render services for wages, as defined in
and not as a part of the phrase "net subparagraph (6) (ii) of this paragraph,
earnings from self-employment" and of more than $100. (An individual shall
not as a part of the term "excess earnbe deemed to have engaged in self-em
ings," it shall mean an individual's earnployment in any month if in such month
ings with respect to a taxable year behe renders substantial services, as de
ginning after 1956 and includes the sum fined in subparagraph (5) of this para
of his wages, as defined in subdivision graph, in operating a trade or business
(ii) of this subparagraph, for services as owner or partner, even though there
rendered in such year and his net earnmay be no earnings or net earnings
ings from self-employment, as defined from self-employment attributable to
in subdivision (i) of this subparagraph, his services for such month; and he will
for such year minus any net loss from be presumed with respect to any month to have rendered services for wages, as
self-employment as defined in subdivi
sion (i) of this subparagraph, for such defined in subparagraph (6) (ii) of this
year. With respect to a taxable year paragraph, of more than $100 until it
beginning after 1958 an individual's is shown to the satisfaction of the Board
earnings from an activity performed that he did not render services in such
outside the United States shall be demonth for more than such amount.)
termined in the same manner as if such (5) Definition of "substantial seroices." For the purposes of subparagraph
activity were performed within the
United States. (4) of this paragraph, an individual en
(i) Net earnings from self-employgaged in self-employment is presumed
ment and net loss from self-employment. to have rendered substantial services in
An individual's net earnings from selfeach month in his taxable year. How
employment and his net loss from selfever, he may submit evidence to establish
employment for the purposes of this that in any month in such taxable year subparagraph and subparagraph (5), he did not render substantial services shall be determined under the provisions with respect to any trade or business the of section 211 of the Social Security Act net income or loss of which is includi- (but without regard to the provisions ble in computing his earnings (but with- in paragraphs (1), (4), and (5) of subout regard to subparagraph (6) (11) of sections (c) of such section); any excess
of income over deductions so resulting from such computation shall be his net earnings from self-employment and any excess of deductions over income so resulting shall be his net loss from selfemployment.
(ii) Wages. For purposes of this subparagraph and subparagraph (4) of this paragraph, an individual's wages shall be determined under section 209 of the Social Security Act (but without regard to the limitations as to amounts of remuneration specified in subsections (a), (g) (2), (g) (3), (h) (2), and (1) of such section); and in making such computation, services which do not constitute "employment" as that term is defined in section 21 of the Social Security Act performed within the United States by an individual as an employee or performed outside the United States in the active military or naval service of the United States, shall be deemed to be employment as so defined if the remuneration for such services is not includible in computing his net earnings from self-employment or net loss from selfemployment, as defined in subdivision (1) of this subparagraph.
(III) Presumptions concerning wages. For purposes of this subparagraph, wages, as determined under subdivision (i) of this subparagraph, which according to reports received by the Board are paid to an individual during a taxable year shall be presumed to have been paid to him for services rendered in such year until it is shown to the satisfaction of the Board that they were paid for services rendered in another taxable year. If such reports with respect to an individual show his wages for a calendar year, such individual's taxable year shall be presumed to be a calendar year for purposes of this section until it is shown to the satisfaction of the Board that his taxable year is not a calendar year.
(c) Failure of a widow to have a child in her care. (1) Deductions are to be made from any annuity or annuities payable to a widow under section 237.408 for any month in which such widow does not have in her care a child of her deceased husband entitled to a child's insurance annuity for such month. The amount to be deducted is equal to the amount of the widow's current insurance annuity to which she was entitled for the month in which she did not have such a child in her care.
(2) The fact that a child's insurance annuity for a particular month is with
held to effect a deduction under any of the other paragraphs of this section, or under § 237.703, or an adjustment under Part 255 of this chapter, does not affect the right of a widow, who has the child in her care, to a widow's current insurance annuity, since the child is nevertheless “entitled” to a child's insurance anpuity.
(d) Manner of making deductions. (1) Deductions as provided for in this section are made by withholding insurance annuities in whole or in part, depending upon the amount to be deducted. If the amount to be deducted is not withheld from the insurance annuity or annuities for the month in which the event occurred which occasioned the deduction (if, for example, the occurrence has not been brought to the attention of the Board), such amount will be withheld from the insurance annuity or annuties for one or more subsequent months. The total amount to be deducted may, therefore, at the time of withholding, be greater or less than any insurance annuity or annuities for a month from which such amount is to be withheld.
(2) When it is determined that a deduction is required under paragraph (a), (b), or (c) of this section, no insurance annuity to which the individual in question is entitled for any month will be paid until a total amount equal to the amount to be deducted has been withheld. I the amount of the required deduction is less than any such insurance annuity, or the total of such insurance annuities, for a month, the amount to be deducted will be withheld from such insurance an. nuity or annuities.
(e) Deductions where more than one deduction event in a month occurs. Section 5 (i) (2) of the act prevents duplication of deductions described in paragraphs (a), (b) and (c) of this section, by reason of the occurrence of more than one of the events enumerated in such paragraphs in a particular month. If more than one such event occurs in a month, the total amount of the deduction is the same as if only one such event had occurred. Section 5 (i) (2) of the act has no application to any other deductions or adjustments under the act (see paragraph (h) of this section).
(f) Total amount to be deducted. I, however, any of the events occasioning the deduction under paragraph (a), (b), or (c) of this section occurs in more than one month, the total amount to be deducted is equal to the sum of the
deductions for all months in which any such event occurred. With respect to earnings under paragraph (b) (1) of this section, & deduction event is deemed to have occurred in any month to which excess earnings are charged (see paragraph (b)(3) of this section).
(g) Relation to maximum and minimum insurance annuity totals. In effecting a deduction, no amount can be considered as having been withheld from an insurance annuity for a particular month which is in excess of the amount of such insurance annuity as reduced or increased (if required) under section 5 (h) of the act (see Subpart F of this part). Likewise, the amount of an insurance annuity by which a deduction is measured (i. e., an insurance annuity for the month in which the event occasioning the deduction occurred) is the amount of such insurance annuity as so reduced or increased.
(h) Relation to other provisions for deductions and adjustments. A deduction required under section 5 (1) (1) of the act is made prior to and in addition to any deductions under section 5 (1) (3) of the act (see § 237.703), and prior to and in addition to any adjustments under Part 255 of this chapter.
(i) Reports to the Board of certain events occasioning deductions. Section 5 (i) (2) of the act imposes upon an individual the obligation to report to the Board the occurrence of any of the events enumerated in paragraph (a), (b), or (c) of this section if such individual is in receipt of an insurance annuity or annuities (on his own behalf or on behalf of another) from which a deduction is to be made under such paragraphs. (Board Order 55-89, 20 F. R. 3720, May 27, 1955, as amended by Board Order 60–12, 25 F.R. 1675, Apr. 6, 1960; Board Order 63–149, 28 F.R. 9525, Aug. 30, 1963) § 237.703 Deductions because of death
benefit payments. Section 5(i) (3) of the act provides for certain deductions from any insurance annuities or lump-sum death payments under section 5 on the basis of the insured status of a deceased employee. The basis for and the amount of each of these deductions are set out in paragraphs (a) and (b) of this section.
(a) Death benefits under Retirement Acts. Prior to the amendments approved July 31, 1946, effective January 1, 1947, with regard to the matters here involved, section 5 of the Railroad Retirement Act
of 1935, and section 5 of the Railroad Re. tirement Act of 1937, provided for certain payments upon the death of an employee. Those provisions are superseded, effective January 1, 1947, by the provisions of section 5 of the Railroad Retirement Act as amended. The amendatory act provides that payments upon death as provided in section 5 of the 1935 and 1937 acts, other than survivor annuities pursuant to an election, shall be made only with respect to deaths occurring before January 1, 1947. The total amount paid under the unamended sections 3 with respect to the death of an employee, except survivor annuity payments made pursuant to an election, must be deducted from any insurance annuities under this part based on the insured status of that deceased employee.
(b) Lump-sum death payments under Social Security Act. The total amount of any lump sum paid under title II of the Social Security Act with respect to the death of an employee must be deducted from any insurance annuities under this part based on the insured status of that deceased employee.
(c) Manner of making deductions. (1) If more than one person is entitled to any insurance annuity or annuities under this part on the basis of the insured status of the same deceased employee, the deduction required under paragraph (a) or (b) of this section is made from the insurance annuity or annuities to which each such person is entitled in the proportion that his insurance annuity or annuities for a month bears to the total of such insurance annuities for a month.
(2) In any case in which a deduction under paragraph (a) or (b) of this section is to be made, the deduction of the amount designated in paragraph (a) or (b) of this section is made by actuarial recovery from any insurance annuity under this part to which such individual is or becomes entitled on the basis of the insured status of the employee referred to in such paragraph: Provided, however, That the deduction is not less than the amount of the insurance annuity for a month: Provided further, That the actuarial reduction does not exceed the amount of the insurance annuity for a month: And provided further, That such individual does not request the withholding of the entire monthly Insurance annuity until the total amount withheld equals the total amount to be
recovered. If the deduction is less than deduction is required, there will be withthe amount of the insurance annuity, or held from the insurance annuity the 11 the actuarial reduction exceeds the amount by which such insurance annuity amount of the insurance annuity for a exceeds the amount of the insurance month, or if the individual specifically benefit to which the individual had been 80 requests, the deduction is made by so entitled under the Social Security withholding until the accumulated Act; this withholding will be continued withholdings equal the total amount to until such time as the total of the be recovered.
amounts thus withheld from the insur(d) Relation to other provisions. (1) ance annuity equals the amount to be When deductions are to be made under deducted from such insurance annuity. this section from an inurance annuity (2) If the case is not within the puror insurance annuities, the amounts to view of subparagraph (1) of this parabe deducted are measired by and are graph, the deduction is made by withwithheld from the amount of the insur- holding, to the extent hereinafter indiance annuity, or the amounts of the in- cated, the amount designated in such surance annuities, as reduced or in- paragraph (a), (b), (c), or (d) of this creased under section 5(b) of the act section, from any such insurance annuity (see Subpart F of this part).
under this part to which such individual (2) A deduction required under this is or becomes entitled on the basis of the section is made in addition to any de- insured status of the employee referred ductions required under section 5(1) (1) to in such paragraph. Upon determinaof the act (see & 237.702), and in addition tion that such a deduction is required, to any adjustment under Part 255 of
no such insurance annuity for any month this chapter.
will be paid until a total amount equal (e) Manner of making deductions. If
to the amount to be deducted has been more than one person is entitled to any
withheld. If the amount to be deducted insurance annuity or annuities, or to
is less than the amount of any such inany lump-sum death payment, under surance annuity for a month, the amount this part, on the basis of the insured to be deducted will be withheld from the status of the same deceased employee, amount of such insurance annuity. the deduction required under paragraph In any case in which a deduction un(a), (b), (c), or (d) of this section is der paragraph (c) or (d) of this section made from the insurance annuity or is to be made from lump-sum death annuities, or from the share of the lump payments under this part, such deducsum, to which each such person is en- tion is made by withholding the amount titled, in the proportion that his insur- designated in such paragraph from any ance annuity or annuities for a month, such lump-sum death payments to which or his share of the lump sum, bears to any individual is or becomes entitled on the total of such insurance annuities the basis of the insured status of the for a month, or the total of such lump employee referred to in such paragraph. sum.
Upon determination that such a deducIn any case in which a deduction under tion is required, no such lump-sum death paragraph (a), (b), (c), or (d) of this payment will be paid until a total amount section is to be made from an insurance equal to the amount to be deducted has annuity under this part, such deduction
been withheld. If the amount to be deis made in the following manner:
ducted is less than the lump sum then (1) If the individual had been re
payable, the amount to be deducted will ceiving an insurance benefit under the be withheld from such lump sum. Social Security Act, and ceased to be (f) Relation to other provisions. entitled thereto because of the provi
When deductions are to be made under sions of section 5 (g) (1) of the Railroad this section from an insurance annuity Retirement Act, as amended, the deduc- or insurance annuities, the amounts to tion is made by withholding, to the ex
be deducted are measured by and are tent hereinafter indicated, the amount withheld from the amount of the insurdesignated in such paragraph (a), (b), ance annuity, or the amounts of the in(c), or (d) of this section, from any such surance annuities, as reduced or ininsurance annuity under this part to creased under section 5(h) of the act which such individual is or becomes en- (see Subpart F of this part). titled on the basis of the insured status A deduction required under this secof the employee referred to in such para- tion is made in addition to any deducgraph. Upon determination that such a tions required under section 5(1) (1) of
the act (see 237.702), and in addition 8 237.804 Signature on application to any adjustment under Part 255 of this form. chapter.
The application form shall be signed (12 F.R. 2025, Mar. 27, 1947, as amended by
personally by the applicant in his usual Board Order 60–12, 25 F.R. 1676, Feb. 26,
manner: Provided, however, That if the 1960; Board Order 63–149, 28 F.R. 9626, Aug.
applicant is unable to sign his name 30, 1963)
because of physical inability or illiterSubpart H—Application for Insurance acy, he shall then make his mark (X)
Annuities and Lump Sums for Sur- and a witness shall affix the applicant's vivors
name. In every case the signature or
mark shall either be executed and au237.801 Statutory provisions.
thenticated in such manner as the form (See section 5(j) of the act, quoted provided may indicate or shall be exein § 237.401, and the last sentence of
cuted before and authenticated by an section 5(f) (1) of the act, quoted in
employee of the Board duly designated $ 237.501.)
and authorized to perform such services.
In the event that the signature or any (Board Order 65–89, 20 F.R. 3722, May 27. 1965)
written portion of the application form
is, within the judgment of the Board, $ 237.802 Application to be filed.
substantially illegible or of doubtful auNo individual, irrespective of his qual- thenticity, or, if in the judgment of the ifications, shall receive an annuity or
Board there are substantial omissions in lump-sum payment under this part un- the application form, the Board may reless, on or before the date of his death, quire its reexecution or correction: Prohis duly executed application upon such vided further, That an application form form as the Board may from time to time that is reexecuted because the previous prescribe is filed with the Board.
form was either not signed or improperly (Board Order 62–33, 27 FR. 3323, Apr. 7,
signed shall be returned and shall be re1962]
ceived by the Board within 30 days after
notice to correct such deficiency is mailed $ 237.803 Filing date of application.
to the applicant; otherwise, the filing An application, filed in the manner date of the application shall be the date and form prescribed in § 237.802, for any on which such reexecuted application payment under this part shall be con- form is received by the Board. sidered filled with the Board on the date
(Board Order 62-33, 27 FR. 3323, Apr. 7, it is received at an office of the Board, 1962] or the date it is delivered to a field em
$ 237.805 Limitation on filing. ployee of the Board specifically authorized by a regional director to receive
No application for an insurance an
nuity under this part filed prior to 3 applications in the area where delivery
months before the first month for which is made, whichever date is earlier: Pro
the applicant becomes otherwise entitled vided, however, That if in the adjudi
to receive such annuity shall be accepted. cation of an application for a payment
(12 F.R. 2026, Mar. 27, 1947] under this part it is determined that the
$ 237.806 Filing of application. applicant died on a day observed by the Board as a non-work day and that his (a) With Social Security Administraapplication was received through the
tion. (1) The claim or application of mail at an ofice of the Board on the
an individual filed with the Social Secufirst business day following such non
rity Administration on or after October
1, 1946, for an insurance benefit or & work day, the application shall be deemed to have been filed with the Board on such
lump-sum death payment under subsec
tion (c), (d), (e), (f), or (g) of section non-work day if it is established to the
202 of title II of the Social Security Act, satisfaction of the Board that the ap
as amended August 10, 1946, based upon plication was mailed in sufficient time the death of an individual who has had to have been received by the Board in service covered under the Railroad Rethe ordinary course of the mail on such tirement Act, as amended July 31, 1946, non-work day had that day been a busi- shall be deemed to be an application for ness day.
the corresponding survivor benefit under (Board Order 62-88, 27 FR. 8828, Apr. 7,
subsection (a), (b), (c), (d), or (f) of 1962]
section 5 of the Railroad Retirement Act,