# 2025-21000: Railroad Workers Get Their Own Special Tax System Apparently

2025-21000, Publication of the Tier 2 Tax Rates, is a Federal Register notice from Treasury Department, Internal Revenue Service published 2025-11-25, effective 2026-01-01; PRIA reads it as touching household money (as of 2026-06-08).

- Canonical: https://policyrisk.com/federal-register/2025-21000
- As of: 2026-06-08
- Plain-text twin of the page above; the HTML and this file carry the same facts.

## Facts
- Document number: 2025-21000
- Title: Publication of the Tier 2 Tax Rates
- Type: Notice
- Agencies: Treasury Department; Internal Revenue Service
- Citation: 90 FR 53444
- Published: 2025-11-25
- Effective: 2026-01-01
- Comments close: not stated
- Significant: no
- Touches household money: yes
- Regulation identifier numbers: none
- Last updated: 2026-06-08

## In one line

Railroad Workers Get Their Own Special Tax System Apparently

## Summary

Starting in 2026, railroad workers, their employers, and employee reps will see new Tier 2 tax rates that help fund retirement benefits. Employees will pay 4.9% of their pay, while employers and reps will each pay 13.1%. These rates kick in for all 2026 earnings, so everyone involved should get ready for the change!

## Abstract

Publication of the tier 2 tax rates for calendar year 2026 as required by section 3241(d) of the Internal Revenue Code. Tier 2 taxes on railroad employees, employers, and employee representatives are one source of funding for benefits under the Railroad Retirement Act.

## Effects PRIA read

- Railroad Employee Tier 2 Tax Rise: cost, medium. If you are a railroad employee, you will pay a Tier 2 tax of 4.9% on compensation paid in calendar year 2026. This new rate applies to all 2026 earnings for railroad employees and helps fund Railroad Retirement Act benefits.
- Railroad Employer Tier 2 Tax Increase: cost, high. Railroad employers must pay a Tier 2 tax of 13.1% on compensation paid in calendar year 2026. This 13.1% employer tax applies to all 2026 payroll for railroad employers to help fund Railroad Retirement Act benefits.
- Employee Representative Tier 2 Tax Match: cost, medium. Employee representatives (e.g., union representatives) must pay a Tier 2 tax of 13.1% on compensation paid in calendar year 2026. The 13.1% rate for employee representatives applies to all 2026 compensation and helps fund Railroad Retirement Act benefits.

## Related documents

- [2026-20447](https://policyrisk.com/federal-register/2026-20447): Transparency in Coverage, 2026-10-06
- [2026-20277](https://policyrisk.com/federal-register/2026-20277): Federal Scholarship Tax Credit, 2026-10-02
- [2026-20026](https://policyrisk.com/federal-register/2026-20026): Trump Accounts, 2026-09-30
- [2026-20027](https://policyrisk.com/federal-register/2026-20027): Trump Accounts, 2026-09-30
- [2026-18219](https://policyrisk.com/federal-register/2026-18219): Car Loan Interest Deduction, 2026-09-08
- [2026-17622](https://policyrisk.com/federal-register/2026-17622): Federal Independent Dispute Resolution Operations; Correction, 2026-08-28

## Sources
- [2025-21000 on federalregister.gov](https://www.federalregister.gov/documents/2025/11/25/2025-21000/publication-of-the-tier-2-tax-rates)
- [2025-21000 as published (PDF)](https://www.govinfo.gov/content/pkg/FR-2025-11-25/pdf/2025-21000.pdf)

## Related
- [Previous: 2025-20999, National Institute of General Medical Sciences; Notice of Partially Closed Meet…](https://policyrisk.com/federal-register/2025-20999)
- [Next: 2025-21002, Center for Scientific Review; Notice of Closed Meetings](https://policyrisk.com/federal-register/2025-21002)
- [All Federal Register documents](https://policyrisk.com/federal-register)

Source: PRIA, https://policyrisk.com/federal-register/2025-21000 (as of 2026-06-08).