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Tax Deposits by Railroads
(Posted April 8, 2004)
Question 427: When does the railroad deposit its portion of Railroad Retirement payroll taxes? I read somewhere that the railroad doesn't deposit taxes until the employee retires; is that right?
Answer: Railroads are required by the Internal Revenue Service to make frequent deposits of the amounts withheld from workers' earnings for Railroad Retirement and to make frequent deposits of the additional amounts that they, as employers, owe based on those earnings. Deposits are made at least monthly, but often more frequently by the larger railroads.
The funds go directly into the various Railroad Retirement Trust Funds used to finance the program. Funds not immediately needed to make payments are invested; the earnings are credited to Railroad Retirement.
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