Instructions For Form Ct-1 (2009) - Internal Revenue Service (Page 5 of 7) in pdf

Order in which deposits are applied. Generally, tax

Line 5— Tier I Employee Medicare

deposits are applied first to the most recent tax liability

Tax

within the specified tax period to which the deposit relates. If

you receive a failure to deposit penalty notice, you may

Enter the compensation, including tips reported, subject to

designate how your payment is to be applied in order to

Tier I employee Medicare tax in the Compensation column.

minimize the amount of the penalty. You must respond

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

within 90 days of the date of the notice. Follow the

For information on reporting tips, see Tips beginning on

instructions on the notice you received. See Rev. Proc.

page 2.

2001-58 for more information. You can find Rev. Proc.

2001-58 on page 579 of Internal Revenue Bulletin 2001-50

Line 6— Tier II Employee Tax

Enter the compensation, including tips reported, subject to

Trust fund recovery penalty. If taxes that must be

Tier II employee tax in the Compensation column. Only the

withheld are not withheld or are not deposited or paid to the

first $79,200 of the employee’s compensation for 2009 is

United States Treasury, the trust fund recovery penalty may

subject to this tax. Multiply by 3.9% and enter the result in

apply. The penalty is 100% of the unpaid taxes. This penalty

the Tax column. For information on reporting tips, see Tips

may apply to you if these unpaid taxes cannot be

beginning on page 2.

immediately collected from the employer or business. The

trust fund recovery penalty may be imposed on all persons

Any compensation paid during the current year that

who are determined by the IRS to be responsible for

was earned in prior years (reported to the Railroad

collecting, accounting for, and paying over these taxes, and

Retirement Board on Form BA-4, Report of

CAUTION

who acted willfully in not doing so. For more information, see

Creditable Compensation Adjustments) is taxable at the

Pub. 15 (Circular E).

current year tax rates, unless special timing rules for

nonqualified deferred compensation apply. See Publication

15-A. Include such compensation with current year

compensation on lines 1 through 6, as appropriate.

Specific Instructions

Lines 7 Through 10— Tier I Taxes on

Final return. If you stop paying taxable compensation and

Sick Pay

will not have to file Form CT-1 in the future, you must file a

final return and check the Final return box at the top of Form

Enter any sick pay payments during the year that are

CT-1 under “2009.”

subject to Tier I taxes and Tier I Medicare taxes in the

Compensation column. If you are a railroad employer paying

Processing of your return may be delayed if you do

your employees sick pay, or a third-party payer who did not

not provide the required amounts in the

notify the employer of the payments (thereby subject to the

Compensation and Tax columns.

CAUTION

employee and employer tax), make entries on lines 7

through 10. If you are subject to only the employer or

employee tax, complete only the applicable lines. Multiply by

Line 1— Tier I Employer Tax

the appropriate rates and enter the results in the

Enter the compensation (other than tips and sick pay)

Tax column.

subject to Tier I employer tax in the Compensation column.

Do not enter more than $106,800 per employee. Multiply by

Line 12— Adjustments to Taxes

6.2% and enter the result in the Tax column.

Based on Compensation

Line 2— Tier I Employer Medicare Tax

Do not use line 12 for prior period adjustments. Make

Enter the compensation (other than tips and sick pay)

all prior period adjustments on Form CT-1 X.

subject to Tier I employer Medicare tax in the Compensation

CAUTION

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

Enter on line 12:

Tax column.

•

A fractions of cents adjustment (see Fractions of cents on

page 6),

•

Line 3— Tier II Employer Tax

Credits for overpayments of penalty or interest paid on tax

for earlier years, and

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

•

Any uncollected Tier I Employee tax, Tier I Employee

employer tax in the Compensation column. Do not enter

Medicare tax, and Tier II Employee tax on tips.

more than $79,200 per employee. Multiply by 12.1% and

enter the result in the Tax column.

Enter the total of these adjustments in the Tax column. If

you are reporting both an addition and a subtraction, enter

only the difference between the two on line 12. If the net

Line 4— Tier I Employee Tax

adjustment is negative, report the amount on line 12 using a

minus sign, if possible. If your computer software does not

Enter the compensation, including tips reported, subject to

allow the use of minus signs, you may use parentheses.

Tier I employee tax in the Compensation column. Do not

enter more than $106,800 per employee. Multiply by 6.2%

Do not include on line 12 the 2008 overpayment that is

and enter the result in the Tax column.

applied to this year’s return (this is included on line 14).

Stop collecting the 6.2% Tier I employee tax when the

Required statement. Except for adjustments for fractions

employee’s wages and tips reach the maximum for the year

of cents, explain amounts entered on line 12 in a separate

($106,800 for 2009). However, your liability for Tier I

statement. Include your name, employer identification

employer tax on compensation continues until the

number (EIN), calendar year of the return, and “Form CT-1”

compensation, not including tips, totals $106,800 for the

on each page you attach. Include in the statement the

year.

following information.

-5-

Instructions for Form CT-1 (2009)

Instructions For Form Ct-1 (2009) - Internal Revenue Service Page 5

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