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deposit period). Because the $10,000 was accumulated in a

Follow the instructions on the notice you receive. See Rev.

deposit period different from the one in which the $95,000 was

Proc. 2001-58, 2001-50 I.R.B. 579, for more information.

accumulated, the $100,000 next-day deposit rule does not

Trust fund recovery penalty. If taxes that must be withheld

apply. Thus, G must deposit $95,000 by Friday and $10,000 by

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

the following Wednesday.

States Treasury, the trust fund recovery penalty may apply. The

penalty is 100% of the unpaid taxes. This penalty may apply to

How To Make Deposits

you if these unpaid taxes cannot be immediately collected from

In general, you must deposit railroad retirement taxes with an

the employer or business. The trust fund recovery penalty may

authorized financial institution.

be imposed on all persons who are determined by the IRS to be

responsible for collecting, accounting for, and paying over

Electronic deposit requirement. You must make electronic

these taxes, and who acted willfully in not doing so. See

deposits of all depository taxes (such as employment tax,

Circular E (Pub. 15) for more information.

excise tax, and corporate income tax) using RRBLINK or the

Electronic Federal Tax Payment System (EFTPS) in 2004 if:

•

The total of deposits of such taxes in 2002 were more than

$200,000 or

Specific Instructions

•

You were required to use RRBLINK/EFTPS in 2003.

If you are required to use RRBLINK/EFTPS and use Form

Final return. If you stop paying taxable compensation and will

8109 instead, you may be subject to a 10% penalty. If you are

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

not required to use RRBLINK/EFTPS, you may participate

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

voluntarily. To enroll in or get more information about RRBLINK,

under “2003.”

call 1-888-273-2265. To enroll in or get more information about

Processing of your return may be delayed if you do not

EFTPS, call 1-800-555-4477 or 1-800-945-8400, or visit the

provide the required amounts in the Compensation and

EFTPS website at

Tax columns.

CAUTION

You can use RRBLINK to make your railroad retirement

TIP

Line 1. Tier I Employer Tax

payments and your Federal tax payments.

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

Tier I tax in the Compensation column. Do not enter more than

Depositing on time. For deposits made by RRBLINK/

$87,000 per employee. Multiply by 6.2% and enter the result in

EFTPS to be on time, you must initiate the transaction at least

the Tax column.

one business day before the date the deposit is due.

Use of deposit coupon. If you are not making electronic

Line 2. Tier I Employer Medicare Tax

deposits (explained above), use Form 8109, Federal Tax

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

Deposit Coupon, with each deposit to indicate the type of tax

Tier I Medicare tax in the Compensation column. Multiply by

deposited. To avoid a possible penalty, use an authorized

1.45% and enter the result in the Tax column.

financial institution; do not mail your deposit to the IRS.

Records of your deposits will be sent to the IRS for crediting to

Line 3. Tier II Employer Tax

your business accounts.

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

Accuracy of deposits rule. You are required to deposit 100%

the Compensation column. Do not enter more than $64,500

of your railroad retirement taxes on or before the deposit due

per employee. Multiply by 14.2% and enter the result in the Tax

date. However, penalties will not be applied for depositing less

column.

than 100% if both of the following conditions are met:

1. Any deposit shortfall does not exceed the greater of $100

Line 4. Tier I Employee Tax

or 2% of the amount of taxes otherwise required to be

Enter the compensation, including tips reported, subject to

deposited and

employee Tier I tax in the Compensation column. Do not enter

2. The deposit shortfall is paid or deposited by the shortfall

more than $87,000 per employee. Multiply by 6.2% and enter

makeup date for each type of depositor as described below.

•

the result in the Tax column.

Monthly schedule depositor. Deposit the shortfall or pay

it with your return by the due date of Form CT-1. You may pay

Stop collecting the 6.2% Tier I employee tax when the

the shortfall with Form CT-1 even if the amount is $2,500 or

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

more.

($87,000 for 2003). However, your liability for Tier I employer

•

Semiweekly schedule depositor. Deposit the shortfall by

tax on compensation continues until the compensation, not

the earlier of the first Wednesday or Friday that comes on or

including tips, totals $87,000 for the year.

after the 15th of the month following the month in which the

Line 5. Tier I Employee Medicare Tax

shortfall occurred or the due date of Form CT-1. For example, if

a semiweekly schedule depositor has a deposit shortfall during

Enter the compensation, including tips reported, subject to

January 2004, the shortfall makeup date is February 18, 2004

employee Tier I Medicare tax in the Compensation column.

(Wednesday).

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

information on reporting tips, see Tips on page 2.

Penalties and Interest

Line 6. Tier II Employee Tax

The law provides penalties for failure to file a return, late filing of

Enter the compensation, including tips reported, subject to

a return, late payment of taxes, failure to make deposits, or late

Tier II employee tax in the Compensation column. Only the

deposits unless reasonable cause is shown. If you are

first $64,500 of the employee’s compensation for 2003 is

unavoidably late in doing any of these, send an explanation with

subject to this tax. Multiply by 4.9% and enter the result in the

Form CT-1. Interest is charged on taxes paid late at the rate set

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

by law. See Circular E (Pub. 15) for more information.

page 2.

Order in which deposits are applied. Generally, for deposit

periods beginning after December 31, 2001, tax deposits are

Any compensation paid during the current year that was

applied first to the most recent tax liability within the specified

earned in prior years (reported to the Railroad

tax period to which the deposit relates. If you receive a failure to

Retirement Board on Form BA-4, Report of Creditable

CAUTION

deposit penalty notice, you may designate how your payment is

Compensation Adjustments) is taxable at the current year tax

to be applied in order to minimize the amount of the penalty.

rates. Include such compensation with current year

You must respond within 90 days of the date of the notice.

compensation on lines 1 through 6, as appropriate.

-4-

Instructions For Form Ct-1 - Employer'S Annual Railroad Retirement Tax Return - 2003 Page 4

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