Instructions For Form Ct-1 - 2008 Page 5
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7may pay the shortfall with Form CT-1 even if the amount is
Line 4— Tier I Employee Tax
$2,500 or more.
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Enter the compensation, including tips reported, subject to
Semiweekly schedule depositor. Deposit the shortfall
Tier I employee tax in the Compensation column. Do not
by the earlier of the first Wednesday or Friday that comes on
enter more than $102,000 per employee. Multiply by 6.2%
or after the 15th of the month following the month in which
and enter the result in the Tax column.
the shortfall occurred or the due date of Form CT-1. For
example, if a semiweekly schedule depositor has a deposit
Stop collecting the 6.2% Tier I employee tax when the
shortfall during January 2009, the shortfall makeup date is
employee’s wages and tips reach the maximum for the year
February 18, 2009 (Wednesday).
($102,000 for 2008). However, your liability for Tier I
employer tax on compensation continues until the
compensation, not including tips, totals $102,000 for the
Penalties and Interest
year.
The law provides penalties for failure to file a return, late
Line 5— Tier I Employee Medicare
filing of a return, late payment of taxes, failure to make
deposits, or late deposits unless reasonable cause is
Tax
shown. Interest is charged on taxes paid late at the rate set
by law. For more information, see Pub. 15 (Circular E).
Enter the compensation, including tips reported, subject to
Tier I employee Medicare tax in the Compensation column.
Order in which deposits are applied. Generally, tax
Multiply by 1.45% and enter the result in the Tax column.
deposits are applied first to the most recent tax liability
For information on reporting tips, see Tips on page 3.
within the specified tax period to which the deposit relates. If
you receive a failure to deposit penalty notice, you may
Line 6— Tier II Employee Tax
designate how your payment is to be applied in order to
minimize the amount of the penalty. You must respond
Enter the compensation, including tips reported, subject to
within 90 days of the date of the notice. Follow the
Tier II employee tax in the Compensation column. Only the
instructions on the notice you received. See Rev. Proc.
first $75,900 of the employee’s compensation for 2008 is
2001-58 for more information. You can find Rev. Proc.
subject to this tax. Multiply by 3.9% and enter the result in
2001-58 on page 579 of Internal Revenue Bulletin 2001-50
the Tax column. For information on reporting tips, see Tips
at
on page 3.
Trust fund recovery penalty. If taxes that must be
Any compensation paid during the current year that
withheld are not withheld or are not deposited or paid to the
!
was earned in prior years (reported to the Railroad
United States Treasury, the trust fund recovery penalty may
Retirement Board on Form BA-4, Report of
CAUTION
apply. The penalty is 100% of the unpaid taxes. This penalty
Creditable Compensation Adjustments) is taxable at the
may apply to you if these unpaid taxes cannot be
current year tax rates, unless special timing rules for
immediately collected from the employer or business. The
nonqualified deferred compensation apply. See Publication
trust fund recovery penalty may be imposed on all persons
15-A. Include such compensation with current year
who are determined by the IRS to be responsible for
compensation on lines 1 through 6, as appropriate.
collecting, accounting for, and paying over these taxes, and
who acted willfully in not doing so. For more information, see
Lines 7 Through 10— Tier I Taxes on
Pub. 15 (Circular E).
Sick Pay
Enter any sick pay payments during the year that are
Specific Instructions
subject to Tier I taxes and Tier I Medicare taxes in the
Compensation column. If you are a railroad employer paying
Final return. If you stop paying taxable compensation and
your employees sick pay, or a third-party payer who did not
will not have to file Form CT-1 in the future, you must file a
notify the employer of the payments (thereby subject to the
final return and check the Final return box at the top of Form
employee and employer tax), make entries on lines 7
CT-1 under “2008.”
through 10. If you are subject to only the employer or
employee tax, complete only the applicable lines. Multiply by
Processing of your return may be delayed if you do
the appropriate rates and enter the results in the
!
not provide the required amounts in the
Tax column.
Compensation and Tax columns.
CAUTION
Line 12— Adjustments to Taxes
Line 1— Tier I Employer Tax
Based on Compensation
Enter the compensation (other than tips and sick pay)
Enter on line 12:
subject to Tier I employer tax in the Compensation column.
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A sick pay adjustment,
Do not enter more than $102,000 per employee. Multiply by
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A fractions of cents adjustment (see Fractions of cents on
6.2% and enter the result in the Tax column.
page 6),
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For errors discovered prior to January 1, 2009,
Line 2— Tier I Employer Medicare Tax
corrections of underpayments or overpayments of taxes
Enter the compensation (other than tips and sick pay)
reported on prior year returns, including any adjustments
subject to Tier I employer Medicare tax in the Compensation
resulting from an audit by the RRB, and
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column. Multiply by 1.45% and enter the result in the
Credits for overpayments of penalty or interest paid on tax
Tax column.
for earlier years.
Enter the total of these adjustments in the Tax column. If
Line 3— Tier II Employer Tax
you are reporting both an addition and a subtraction, enter
Enter the compensation (other than tips) subject to Tier II
only the difference between the two on line 12. If the net
employer tax in the Compensation column. Do not enter
adjustment is negative, report the amount on line 12 using a
more than $75,900 per employee. Multiply by 12.1% and
minus sign, if possible. If your computer software does not
enter the result in the Tax column.
allow the use of minus signs, you may use parentheses.
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