Important Railroad Retirement 2026 Nubers that Railroaders and Retirees Should Know

Key 2026 Tax Numbers Every Railroader Should Know

Each year, tax and payroll limits change—and 2026 is no exception. These updates affect both active railroad employees and railroad retirees, so understanding the new numbers can help you plan ahead and avoid surprises in your paycheck or retirement income.

Below is a breakdown of the most important 2026 Railroad Retirement tax and earnings limits and how they may impact you.

2026 Tax Updates for Working Railroaders

Let’s start with employees who are still working.

Tier I Payroll Taxes

Tier I tax rate: 6.2% (unchanged)
Medicare tax: 1.45% (unchanged)
New Tier I wage base: $184,500

You’ll pay the 6.2% Tier I tax on earnings up to $184,500. Once you exceed that amount, the Tier I portion stops for the year.

Additional Medicare Tax

0.9% additional Medicare tax
- Applies to single filers earning over $200,000
- Applies to married filing jointly once household earnings exceed the threshold
This tax continues indefinitely once triggered.

Tier II Contributions

Employee Tier II rate: 4.9%
2026 Tier II wage base: $137,100

While often referred to as a “tax,” Tier II is better thought of as a pension contribution. The money you pay into Tier II comes back to you later through your Railroad Retirement benefits.

2026 Rules for Railroad Retirement Recipients

For retirees, tax rules remain mostly the same. However, working while collecting Railroad Retirement can still impact benefits—especially before full retirement age.

Earnings Limit Before Full Retirement Age

2026 earnings limit: $24,800
For every $2 earned over the limit, $1 is deducted from your Tier I benefit.

This applies only to earned income, not pensions or investment income.

Earnings Limit in the Year You Reach Full Retirement Age (67)

Higher earnings limit: $65,160
Benefit reduction improves to $1 withheld for every $3 earned over the limit.

This makes the year you reach full retirement age far more flexible if you plan to keep working.

Tier II Work Deductions

No changes for 2026
If you continue working for a last-previous railroad employer:
- Tier II benefits are reduced $1 for every $2 earned, up to a maximum of 50%
- This rule also applies to spousal Tier II benefits

Final Thoughts

These 2026 numbers are important tools for tax planning and retirement planning, whether you’re still working, already retired, or transitioning into Railroad Retirement.

One of the key components of my Boarding for Railroad Retirement® process is helping railroaders plan around these tax rules to keep more of what they earn and receive.

If you’re at or near Railroad Retirement, make sure your plan reflects these updated limits.

Until next time—stay safe, stay on track, and take care.

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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. Highball Advisors encourages you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Highball Advisors, and all rights are reserved from Highball Advisors, and all rights are reserved.