RUIA Tax Withholding Introduction
Unlike compensation under the RRA and the RRTA, the monthly maximum taxable
and creditable compensation amount under the RUIA for an employee may be
allocated among multiple concurrent employers.
RUIA Tax Withholding from Multiple
Employers
If an employee works only for a system unit in a month, earnings are
creditable and taxable under the RUIA up to the monthly maximum. If the employee
also worked for another covered employer in the same month, the employee's
combined earnings are creditable up to the RUIA monthly maximum.
If the combined earnings exceed the RUIA monthly maximum, the creditable RUIA
compensation may be allocated or prorated between the two employers. The method
of prorating is not set by the Railroad Retirement Board, but by agreement
between the two employers. Any method that yields the correct total RUIA
compensation and produces payment of the RUIA contribution liability is
acceptable to the RRB.
Part IV, Chapter
2 and the Form OE-1 instructions includes more detailed information about
alternative ways, including examples, to apportion RUIA earnings between
multiple employers.
Labor Organizations and RUIA Reports/Tax
If a labor organization does not report or tax RUIA compensation because of
primary carrier earnings, proper documentation must exist in the system
subordinate unit's records to substantiate non-reporting of RUIA earnings.
Because the RUIA maximum earnings are monthly, substantiation must exist for
each month of non-reporting and the corresponding non-payment of RUIA
contributions is assumed. Substantiation is needed to prevent the underpayment
of RUIA tax and possible resultant penalties and interest.
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