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Stop, Look & Listen: Railroad Retirement Benefits Q&A

Answers are provided by Robert S. Kaufman

IRA Contributions by Workers Covered by Railroad Retirement

(Posted October 10, 2002)

Question 197: May a railroad worker make a tax deductible contribution to a traditional Individual Retirement Account (IRA) regardless of the amount of compensation earned?

Answer: According to IRS, Social Security and Railroad Retirement are not considered to be an "employer retirement plan" for IRA purposes. Therefore most (but not all) railroad workers can deduct contributions to a traditional IRA. Those railroad workers who, in addition to Railroad Retirement, also are covered by a supplemental retirement plan sponsored by their railroad employer are subject to the same limitations on tax deductions as other workers covered by an employer-sponsored retirement plan.

For 2002, the maximum IRA contribution is $3,000 for workers under 50. For those 50 and older, the 2002 maximum is $3,500.

Important notice:

Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.

The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.

Copyright 1997-2017 Robert S. Kaufman
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