What is rrta tax?

RRTA tax stands for Railroad Retirement Tax Act tax, which is a payroll tax imposed on both employers and employees in the railroad industry to fund the Railroad Retirement Board (RRB). The tax is similar to the Social Security tax that funds the Social Security Administration.

The RRTA tax rate is 6.2% for employees and 12.4% for employers, which is split equally between the employer and the employee. The tax is levied on a portion of an employee's wages, similar to the Social Security tax, with a cap on the maximum amount of earnings subject to the tax.

The funds collected from the RRTA tax are used to provide retirement, disability, survivor, and unemployment benefits to railroad workers and their families through the Railroad Retirement Program.

Railroad workers do not participate in the regular Social Security system but instead contribute to the RRTA tax, which provides them with similar benefits. The Railroad Retirement Program is administered by the Railroad Retirement Board, which is a government agency separate from the Social Security Administration.