§3241 — Title 26 Internal Revenue Code | U.S. Code

Summary

The tier 2 railroad retirement tax rates paid by employers, employees, and employee representatives are not fixed. Each year they are set from a table based on the average account benefits ratio, which compares the assets in the railroad retirement funds to the benefits and expenses paid out, averaged over the 10 most recent fiscal years. When the funds are healthier, the rates go down; when they are thinner, the rates go up. The IRS must publish the next year's rates in the Federal Register by December 1 of each year.

Title 26, §3241

Internal Revenue Code — Source: USLM XML via OLRC

(a)For purposes of section 3201(b), 3211(b), and 3221(b), the applicable percentage for any calendar year is the percentage determined in accordance with the table in subsection (b).

(b)Average account benefits ratioApplicable percentage for section 3211(b) and 3221(b)Applicable percentage for section 3201(b) At leastBut less than ..............2.522.14.9 2.5318.14.9 33.515.14.9 3.5414.14.9 46.113.14.9 6.16.512.64.4 6.5712.13.9 77.511.63.4 7.5811.12.9 88.510.11.9 8.599.10.9 9..............8.2

(c)(1)For purposes of this section, the term “average account benefits ratio” means, with respect to any calendar year, the average determined by the Secretary of the account benefits ratios for the 10 most recent fiscal years ending before such calendar year. If the amount determined under the preceding sentence is not a multiple of 0.1, such amount shall be increased to the next highest multiple of 0.1.

(2)For purposes of this section, the term “account benefits ratio” means, with respect to any fiscal year, the amount determined by the Railroad Retirement Board by dividing the fair market value of the assets in the Railroad Retirement Account and of the National Railroad Retirement Investment Trust (and for years before 2002, the Social Security Equivalent Benefits Account) as of the close of such fiscal year by the total benefits and administrative expenses paid from the Railroad Retirement Account and the National Railroad Retirement Investment Trust during such fiscal year.

(d)No later than December 1 of each calendar year, the Secretary shall publish a notice in the Federal Register of the rates of tax determined under this section which are applicable for the following calendar year.

Statutory Notes and Related Subsidiaries

Effective Date

Subchapter applicable to calendar years beginning after Dec. 31, 2001, see section 204(f) of Pub. L. 107–90, set out as an Effective and Termination Dates of 2001

Amendments

note under section 24 of this title.

§3241 Determination of Tier 2 Tax Rate Based on Average Account Benefits Ratio

Summary

Title 26, §3241

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Amendments

Citations & Metadata