June 12, 2019
In Wisconsin Central Ltd., et al v. United States, the U.S. Supreme Court ruled that non-qualified stock options granted to railroad employees are not considered compensation under the Railroad Retirement Tax Act of 1937, and are, therefore, not subject to taxation.
As a result, certain railroad employers and employees who previously paid railroad retirement taxes based on the exercise of such stock options may be eligible for tax refunds through the Internal Revenue Service. The RRB is currently unable to provide guidance as to how, or if, acceptance of a refund will impact an individual's annuity rate on a going forward basis, or whether the Board will seek to collect any overpayments which result from a change in that person's compensation records. Once the Board reaches a decision as to these matters, those persons affected will be notified, and this webpage will be updated to reflect those decisions.