I am a railroad employee and made payments for the year to railroad retirement and need to know how to claim it. Tier 1 and Tier 2 tax is how it shows up on my w2

Forum|Forum|7 years ago
June 7, 2019
3 replies
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Best answer by DianeW777

This is not a tax that is deductible. Rather Tier 1 it is the social security and medicare tax equivalent and the Tier 2 taxes imposed on railroad employees, employers, and employee representatives are a source of funding for benefits under the Railroad Retirement Act.

Enter the W2 exactly as it appears and TurboTax will calculate the correct taxable wages.

DianeW777Answer

Level 15

Enter the W2 exactly as it appears and TurboTax will calculate the correct taxable wages.

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timmyuser

Level 2

I understand tier 1 and tier 2, my question would be I've worked for the railroad for the entire year but I my put the numbers in and TurboTax says my employer overpaid, and I have to contact them is this possible? not only do I have the tier-1 and tier-2 but I also have the federal withholding In box number 2 is that normal could it be the problem?

I went out and check the percentages for the withholdings and they seem correct but TurboTax keeps saying I overpaid and I have to contact my employer

LindaB1993

Level 7

Please review the W-2 entries in box 3-7 . These boxes should be blank. A common error is to enter Medicare tax withheld in the Medicare tax block - an understandable error since Medicare taxes have been paid. Box 2 is correct for the federal taxes withheld.

A "Railroad W2" is a standard IRS Form W-2 issued to an employee covered by the Railroad Retirement Act (RRTA). You will see the following differences from the usual W-2:

Boxes 3 through 7 are blank.
Instead, box 14 Other, reports “RRTA compensation,” “Tier I tax,” “Tier II tax,” “Medicare tax,” and “Additional Medicare Tax.”

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timmyuser

Level 2

that is all still correct, TurboTax is still telling me contact my employer. none of the boxes 3-7 have anything in them.

ThomasM125

Level 15

It appears that that Tier one and/or Tier two tax withheld was more than it should have been, so you are due a refund from your employer. The Tier one percentage should have been 6.2% of your wages and Tier two should have been 4.9%.

If your employer withheld the wrong amount, you will have to get it refunded from them. This will not affect your income tax filing.

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