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Railroad Retirement Benefits Are Taxable
(Posted February 10, 2011)
Question 798: Are rail workers' pensions tax-free?
Answer: Pensions for rail workers are not tax-free.
Most of a Railroad Retirement Annuity is taxed by the Federal government as a Social Security benefit. The remainder is taxed as a "private contributory pension." Needless to say, retired rail workers pay their share of Federal income taxes.
In addition, many states also impose an income tax.
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