Ace the Certified Payroll Pro Test 2025 – Payroll Masters, Your Time to Shine!

Question: 1 / 400

How does the Railroad Retirement Tax Act fund railroad worker retirement benefits?

By imposing state taxes

By collecting fees from the employees

By IRS collection of imposed taxes

The correct answer is C. The Railroad Retirement Tax Act funds railroad worker retirement benefits by the IRS collection of imposed taxes. The Act requires both railroad employees and employers to pay taxes into the Railroad Retirement systems to fund benefits for retired railroad workers and their families. This funding mechanism is separate from state taxes, fees collected directly from employees, or direct government funding, making option C the most appropriate choice.

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By direct government funding

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