Railroad employees who also worked for a social security covered employer in the same year may, under certain circumstances, receive a tax credit equivalent to any excess social security taxes withheld.
Employees who worked for two or more railroads in a year, or who had tier I taxes withheld from their RRB sickness insurance benefits in addition to their railroad earnings, may be eligible for a tax credit of any excess tier I or tier II railroad retirement taxes withheld. Employees who had tier I taxes withheld from their supplemental sickness benefits may also be eligible for a tax credit of any excess tier I tax. Such tax credits may be claimed on an employee's Federal income tax return.
Employees who worked for two or more railroads, or had both railroad retirement and social security taxes withheld from their earnings, should see Internal Revenue Service publication 505, Tax Withholding and Estimated Tax, for information on how to figure any excess railroad retirement or social security tax withheld.
Dual Railroad Retirement-Social Security Taxes Paid, 1951-74
An employee with 10 or more years of railroad service who is not entitled to a vested dual benefit payment may be entitled to a refund of excess social security taxes if his or her combined taxable earnings from the railroad retirement and social security systems in any year in the period 1951-1974 exceeded a maximum annual amount creditable under the Railroad Retirement Act. Eligible employees will receive their refunds from the RRB at retirement without applying for them. In the event an employee should die before receiving the refund, payment will be made to the employee's survivors.
Separation or Severance Allowances
A lump sum, approximating railroad retirement tier II payroll taxes deducted from separation (or severance) allowances, may be paid upon retirement to employees meeting minimum service requirements, or their survivors, to the extent the separation allowances did not yield additional railroad retirement service or earnings credits. The lump-sum provision applies to separation allowances made after 1984.