Instructions For Form Ct-1 (2015) (Page 6 of 8) in pdf

Line 6—Tier 1 Employee Additional

Specific Instructions

Medicare Tax Withholding

Final Return

Enter the compensation, including tips reported (but

If you stop paying taxable compensation and won't have to

excluding sick pay) that is subject to Tier 1 Employee

file Form CT-1 in the future, you must file a final return and

Additional Medicare Tax withholding. You are required to

check the Final return box at the top of Form CT-1 under

begin withholding Tier 1 Employee Additional Medicare Tax

“2015.” This final return should furnish information showing

in the pay period in which you pay compensation in excess of

the last date on which you paid compensation you reported

$200,000 to an employee and continue to withhold it each

on Form CT-1.

pay period until the end of the calendar year. Tier 1

Employee Additional Medicare Tax is only imposed on the

The final return should be accompanied by a statement

employee. There is no employer share of Tier 1 Additional

providing the address at which the records for your Forms

Medicare Tax. All compensation (including sick pay) that is

CT-1 will be kept and the name of the person keeping the

subject to Tier 1 Medicare tax is subject to Tier 1 Employee

records. If the business has been transferred to another

Additional Medicare Tax if paid in excess of the $200,000

person, the statement should include the name and address

withholding threshold.

of the transferee and the date of the transfer. If the business

wasn't transferred or the transferee isn't known, the

Visit IRS.gov and enter “Additional Medicare Tax” in the

statement should so state. The statement should be

search box for more information on Tier 1 Employee

furnished in duplicate.

Additional Medicare Tax.

Line 7—Tier 2 Employee Tax

Processing of your return may be delayed if you

don't provide the required amounts in the

Enter the compensation, including tips reported, subject to

Compensation and Tax columns.

CAUTION

Tier 2 Employee tax in the Compensation column. Only the

Line 1—Tier 1 Employer Tax

first $88,200 of the employee's compensation (including tips)

for 2015 is subject to this tax. Multiply by 4.9% and enter the

Enter the compensation (other than tips and sick pay) subject

result in the Tax column. For information on reporting tips,

to Tier 1 Employer tax in the Compensation column. Multiply

see Tips, earlier.

by 6.2% and enter the result in the Tax column. The total

Any compensation paid during the current year that

amount listed in the Compensation column for lines 1 and 8

was earned in prior years (reported to the Railroad

combined may not be more than $118,500 per employee.

Retirement Board on Form BA-4, Report of

Line 2—Tier 1 Employer Medicare Tax

CAUTION

Creditable Compensation Adjustments) is taxable at the

current year tax rates, unless special timing rules for

Enter the compensation (other than tips and sick pay) subject

nonqualified deferred compensation apply. See Pub.15-A.

to Tier 1 Employer Medicare tax in the Compensation

Include such compensation with current year compensation

column. Multiply by 1.45% and enter the result in the Tax

on lines 1–7, as appropriate.

column.

Line 3—Tier 2 Employer Tax

Lines 8–12—Tier 1 Taxes on Sick Pay

Enter the compensation (other than tips) subject to Tier 2

Enter any sick pay payments during the year that are subject

Employer tax in the Compensation column. Don't enter more

to Tier 1 taxes, Tier 1 Medicare taxes, and Tier 1 Employee

than $88,200 per employee. Multiply by 13.1% and enter the

Additional Medicare Tax withholding in the Compensation

result in the Tax column.

column. Multiply by the rate for the line and enter the result in

the Tax column for that line. For Tier 1 Employer taxes, the

Line 4—Tier 1 Employee Tax

total amount listed in the Compensation column for lines 1

Enter the compensation, including tips reported (but

and 8 combined may not be more than $118,500 per

excluding sick pay), subject to Tier 1 Employee tax in the

employee. For Tier 1 Employee taxes, the total amount listed

Compensation column. Multiply by 6.2% and enter the result

in the Compensation column for lines 4 and 10 combined

in the Tax column. The total amount listed in the

may not be more than $118,500 per employee. Tier 1

Compensation column for lines 4 and 10 combined may not

Medicare taxes aren't subject to a dollar limitation.

be more than $118,500 per employee.

All compensation (including sick pay) that is subject to

Stop collecting the 6.2% Tier 1 Employee tax when the

Tier 1 Medicare tax is subject to Tier 1 Employee Additional

employee's compensation (including sick pay) and tips

Medicare Tax if paid in excess of the $200,000 withholding

reach the maximum for the year ($118,500 for 2015).

threshold.

However, your liability for Tier 1 Employer tax on

compensation continues until the compensation (including

If you are a railroad employer paying your employees sick

sick pay), but not including tips, totals $118,500 for the

pay, or a third-party payer who didn't notify the employer of

year.

the payments (thereby subject to the employee and employer

tax), make entries on lines 8–12. If you are subject to only the

Line 5—Tier 1 Employee Medicare

employer or employee tax, complete only the applicable

Tax

lines. Multiply by the appropriate rates and enter the results

in the Tax column.

Enter the compensation, including tips reported (but

Line 13—Total Tax Based on

excluding sick pay), subject to Tier 1 Employee Medicare tax

in the Compensation column. Multiply by 1.45% and enter

Compensation

the result in the Tax column. For information on reporting

tips, see Tips, earlier.

Add lines 1 through 12 and enter the result on line 13.

-6-

Instructions for Form CT-1 (2015)

Instructions For Form Ct-1 (2015) Page 6

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