Instructions For Form Ct-1 - 2008 (Page 3 of 7) in pdf

each employee by deducting it from the compensation on

Use the table below to determine which deposit schedule

which employee tax is charged. If you do not withhold the

to follow for 2009.

employee tax, you must still pay the tax. If you withhold too

IF you reported taxes

THEN for 2009 you are a...

much or too little tax because you cannot determine the

for the lookback period (2007)

correct amount, correct the amount withheld by an

of...

adjustment, credit, or refund according to the applicable

regulations.

$50,000 or less

Monthly schedule depositor

If you pay the railroad retirement tax for your employee

rather than withholding it, see Rev. Proc. 83-43,

More than $50,000

Semiweekly schedule depositor

1983-1 C.B. 778, for information on how to figure and report

the proper amounts.

New employer. If you are a new employer, your taxes for

Tips. An employee who receives tips must report them to

both years of the lookback period are considered to be zero.

you by the 10th of the month following the month the tips are

Therefore, you are a monthly schedule depositor for the first

received. Tips must be reported for every month, unless the

and second years of your business. However, see $100,000

tips for the month are less than $20.

Next-Day Deposit Rule on page 4.

An employee must furnish you with a written (or

Example. Employer A reported Form CT-1 taxes as

electronic) statement of tips, signed by the employee,

follows:

•

showing (a) his or her name, address, and social security

2007 Form CT-1 — $49,000

•

number; (b) your name and address; (c) the month or period

2008 Form CT-1 — $52,000

for which the statement is furnished; and (d) the total

Employer A is a monthly schedule depositor for 2009

amount of tips. Pub. 1244, Employee’s Daily Record of Tips

because its Form CT-1 taxes for its lookback period

and Report to Employer, a booklet for daily entry of tips and

(calendar year 2007) were not more than $50,000. However,

forms to report tips to employers, is available by calling

for 2010, Employer A is a semiweekly schedule depositor

1-800-TAX-FORM (1-800-829-3676) or on the IRS website

because A’s taxes exceeded $50,000 for its lookback period

(calendar year 2008).

Tips are considered to be paid at the time the employee

Adjustments and the lookback rule. To determine the

reports them to you. You must collect both federal income

amount of taxes paid for the lookback period, use only the

tax and employee railroad retirement tax on tips reported to

Form CT-1 taxes reported on your original return, including

you from the employee’s compensation (after deduction of

any adjustments reported on that return for prior periods.

employee railroad retirement and federal income tax related

Adjustments to a return for a prior period are not taken into

to the nontip compensation) or from other funds the

account in determining the taxes for that prior period. See

employee makes available. Apply the compensation or other

the instructions for Line 12 on page 5.

funds first to the railroad retirement tax and then to federal

Example. Employer B originally reported Form CT-1

income tax. You do not have to pay the employer railroad

taxes of $45,000 for the lookback period (2007).

retirement taxes on tips.

B discovered in March 2009 that the tax during the lookback

If, by the 10th of the month after the month you received

period (2007) was understated by $10,000 and will correct

an employee’s tip income report, you do not have enough

this error with an adjustment on Form CT-1 X filed for 2007.

employee funds available to deduct the employee tax, you

B is a monthly schedule depositor for 2009 because the

no longer have to collect it. See section 6 in

lookback period Form CT-1 taxes are based on the amount

Pub. 15 (Circular E).

originally reported ($45,000), which was not more than

$50,000. The $10,000 adjustment does not affect either

Depositing Taxes

2007 taxes or 2009 taxes. See Treasury Decision 9405 at

For Tier I and Tier II taxes, you are either a monthly

schedule depositor or a semiweekly schedule depositor.

When To Deposit

Also, see the $2,500 Rule and the $100,000 Next-Day

Deposit Rule under Exceptions to the Deposit Rules on

Monthly Schedule Depositor

page 4. The terms “monthly schedule depositor” and

“semiweekly schedule depositor” identify which set of rules

If you are a monthly schedule depositor, deposit employer

you must follow when a tax liability arises (for example,

and employee Tier I and Tier II taxes accumulated during a

when you have a payday). They do not refer to how often

calendar month by the 15th day of the following month.

your business pays its employees or to how often you are

Example. Employer C is a monthly schedule depositor with

required to make deposits.

seasonal employees. C paid wages each Friday during

If you were a monthly schedule depositor for the entire

February but did not pay any wages during March. Under

year, please complete the Monthly Summary of Railroad

the monthly schedule deposit rule, C must deposit the

Retirement Tax Liability in Part II of Form CT-1. If you were

combined taxes for the February paydays by March 15.

a semiweekly schedule depositor during any part of the year

C does not have a deposit requirement for March

or you accumulated $100,000 or more on any day during a

(due by April 15) because no wages were paid and,

deposit period, you must complete Form 945-A, Annual

therefore, C does not have a tax liability for the month.

Record of Federal Tax Liability.

Semiweekly Schedule Depositor

Lookback Period

If you are a semiweekly schedule depositor, use the table

below to determine when to make deposits.

Before each year begins, you must determine the deposit

schedule to follow for depositing Tier I and Tier II taxes for a

Deposit Tier I and Tier II taxes

No later than...

calendar year. This is determined from the total taxes

for payments made on...

reported on your Form CT-1 for the calendar year lookback

period. The lookback period is the second calendar year

Wednesday, Thursday, and/or

The following Wednesday

preceding the current calendar year. For example, the

Friday

lookback period for calendar year 2009 is calendar

year 2007.

-3-

Instructions For Form Ct-1 - 2008 Page 3

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