Instructions For Form Ct-1 - 2008 (Page 2 of 7) in pdf

section 423(b)); or the disposition of such stock by the

Where To File

individual.

•

Send Form CT-1 to:

Payments made specifically for traveling or other bona

fide and necessary expenses that meet the rules in the

Department of the Treasury

regulations under section 62.

Internal Revenue Service Center

•

Payments for services performed by a nonresident alien

Cincinnati, OH 45999-0007

temporarily present in the United States as a nonimmigrant

under subparagraphs (F), (J), (M), or (Q) of the Immigration

When To File

and Nationality Act.

•

File Form CT-1 by March 2, 2009.

Compensation under $25 earned in any month by an

employee in the service of a local lodge or division of a

railway-labor-organization employer.

Definitions

•

Payments made to or on behalf of an employee or

The terms “employer” and “employee” used in these

dependents under a sickness or accident disability plan or a

instructions are defined in section 3231 and in its

medical or hospitalization plan in connection with sickness

regulations.

or accident disability. This applies to Tier II taxes only.

Compensation

For purposes of employee and employer Tier I

taxes, compensation does not include sickness or

Compensation means payment in money, or in something

accident disability payments made:

CAUTION

that may be used instead of money, for services performed

as an employee of one or more employers. It includes

1. Under a workers’ compensation law,

payment for time lost as an employee.

2. Under section 2(a) of the Railroad Unemployment

Group-term life insurance. Include in compensation the

Insurance Act for days of sickness due to on-the-job injury,

cost of group-term life insurance over $50,000 you provide

3. Under the Railroad Retirement Act, or

to an employee. This amount is subject to Tier I and Tier II

4. More than 6 months after the calendar month the

taxes, but not to federal income tax withholding. Include this

employee last worked.

amount on your employee’s Form W-2, Wage and Tax

Statement.

Employer and Employee Taxes

Former employees for whom you paid the cost of

group-term life insurance over $50,000 must pay the

Tax Rates and Compensation Bases

employee’s share of these taxes with their Form 1040. You

are not required to collect those taxes. For former

Tax Rates

Compensation Paid in 2008

employees, you must include on Form W-2 the part of

compensation that consists of the cost of group-term life

Tier I

insurance over $50,000 and the amount of railroad

Employer and Employee: Each pay 6.2% of first . . . . . . .

$102,000

retirement taxes owed by the former employee for coverage

provided after separation from service. For more

Tier I Medicare

information, see section 2 of Pub. 15-B.

Employer and Employee: Each pay 1.45% of . . . . . . . . .

All

Timing. Compensation is considered paid when it is

Tier II

actually paid or when it is constructively paid. It is

constructively paid when it is set apart for the employee or

Employer: Pays 12.1% of first . . . . . . . . . . . . . . . . . . .

$75,900

credited to an account the employee can control without any

Employee: Pays 3.9% of first . . . . . . . . . . . . . . . . . . .

$75,900

limit or condition on how and when the payment is to be

made.

Employer Taxes

Any compensation paid during the current year that was

earned in a prior year is taxable at the current year’s tax

Employers must pay both Tier I and Tier II taxes. Tier I tax is

rates; you must include the compensation with the current

divided into two parts. The amount of compensation subject

year’s compensation on lines 1 through 10 of Form CT-1, as

to each tax is different. See the table above for the 2008 tax

appropriate. An exception applies to nonqualified deferred

rates and compensation bases.

compensation that was subject to Tier I and Tier II tax in a

Concurrent employment. If two or more related

prior year. See the rules for Federal Insurance Contribution

corporations that are rail employers employ the same

Act (FICA) purposes in Publication 15-A, Employers

individual at the same time and pay that individual through a

Supplemental Tax Guide.

common paymaster, which is one of the corporations, the

corporations are considered a single employer. They have

Exceptions. Compensation does not include:

•

to pay, in total, no more in railroad retirement taxes than a

Any benefit provided to or on behalf of an employee if at

single employer would. See Regulations section

the time the benefit is provided it is reasonable to believe

31.3121(s)-1 for more information.

the employee can exclude such benefit from income. For

information on what benefits are excludable, see Pub. 15-B.

Successor employers. Successor employers should see

Examples of this type of benefit include:

section 3231(e)(2)(C) and Pub. 15 (Circular E) to see if they

can use the predecessor’s compensation paid against the

1. Certain employee achievement awards under

maximum compensation bases.

section 74(c),

2. Certain scholarship and fellowship grants under

Employee Taxes

section 117,

You must withhold the employee’s part of Tier I and Tier II

3. Certain fringe benefits under section 132, and

taxes. See the table above for the tax rates and

4. Employer payments to an Archer MSA under section

compensation bases. See Tips below for information on the

220 or Health Savings Accounts (HSA) under section 223.

•

employee tax on tips.

Stock transferred to an individual pursuant to the exercise

of an incentive stock option (as defined in section 422(b)) or

Withholding or payment of employee tax by employer.

under an employee stock purchase plan (as defined in

You must collect the employee railroad retirement tax from

-2-

Instructions For Form Ct-1 - 2008 Page 2

Related Articles

Related forms

Related Categories