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otherwise provided in a collectively bargained rule, use 174

Line 5. Tier I Employer Tax

hours as the standard hourly factor for monthly rated

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

employees.

Tier I tax. Do not show more than $80,400 per employee.

Compensation paid on a mileage or piecework basis.

Multiply by 6.2% and enter the result.

Compensation not based on time (hour, day, month), such as

compensation paid by the mile or by the piece, must be

Line 6. Tier I Employer Medicare Tax

converted into the number of hours represented by the

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

compensation paid. If an employee is paid by the mile, 1

Tier I Medicare tax. Multiply by 1.45% and enter the result.

work-hour equals the number of miles in a workday, divided by

8 hours. For a collective bargaining agreement that specifies

Line 7. Tier II Employer Tax

the number of hours in a workday, the number of hours

specified in the agreement may be used instead of 8 hours.

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

Safe-harbor method. Rather than figuring work-hours

Do not show more than $59,700 per employee. Multiply by

separately for each employee, you may choose to count the

16.1% and enter the result.

number of employees who received any compensation during

the month and multiply that figure by 164 to determine the

Line 8. Tier I Employee Tax

number of work-hours subject to the supplemental annuity

Enter the compensation, including tips reported, subject to

work-hour tax for that month. Count each employee who is paid

employee Tier I tax. Do not enter more than $80,400 per

compensation during the month, even if the individual is

employee. Multiply by 6.2% and enter the result.

part-time, temporary, or seasonal.

A terminated employee is counted in the month of

Line 9. Tier I Employee Medicare Tax

termination (if the employee received compensation in that

Enter the compensation, including tips reported, subject to

month), but not in any later month in which the employee does

employee Tier I Medicare tax. Multiply by 1.45% and enter the

not perform services for the employer as an employee, even if

result. For tips, see Tips on page 2.

the terminated employee is paid compensation in a later month.

For example, an employee who receives compensation during

Stop collecting the 6.2% Tier I employee tax when the

the month of termination and receives a final paycheck the

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

following month is counted as an employee for the month of

($80,400 for 2001). However, your liability for Tier I employer

termination but not for the following month.

tax on compensation continues until the compensation, not

including tips, totals $80,400 for the year.

If you are going to use the safe-harbor method for 2002, you

must choose it by checking the box above line 1 on your timely

Line 10. Tier II Employee Tax

filed 2001 Form CT-1. If you choose the safe-harbor method,

you must use it for the entire year.

Enter the compensation, including tips reported, subject to Tier

II employee tax. Only the first $59,700 of the employee’s

Line 2. Special Supplemental Annuity

compensation for 2001 is subject to this tax. Multiply by 4.9%

Tax

and enter the result. For tips, see Tips on page 2.

Note: Any compensation paid during the current year that was

If you are exempt from the supplemental annuity work-hour tax

earned in prior years (reported to the Railroad Retirement

on line 1 on some or all of your employees because they are

Board on Form BA-4, Report of Creditable Compensation

covered by a supplemental pension plan established by a

Adjustments) is taxable at the current year tax rates. Include

collective bargaining agreement, you are subject instead to a

such compensation with current year compensation on lines 5

special supplemental annuity tax. The tax is equal to (a) the

through 10, as appropriate.

total supplemental annuities paid to those employees each year

plus (b) a percentage for administrative costs. Each quarter, the

Lines 11 Through 14. Tier I Taxes on

Railroad Retirement Board will notify you of the amount due on

Form G-241, Summary Statement of Quarterly Report of

Sick Pay

Railroad Retirement Supplemental Annuity Tax Liabilities. Total

the amounts on Forms G-241 and enter the total on line 2.

Enter the sick pay payments during the year subject to Tier I

Attach a copy of each Form G-241 to Form CT-1.

taxes and Tier I Medicare taxes. If you are a railroad employer

paying your employees sick pay, or a third-party payer who did

Line 3. Adjustments to Supplemental

not notify the employer of the payments (thereby subject to the

employee and employer tax), make entries on lines 11 through

Annuity Work-Hour Tax

14. If you are subject to only the employer or employee tax,

You may take a credit on line 3 for the total monthly reduction of

complete only the applicable line. Multiply by the appropriate

employee supplemental annuities under section 2(h)(2) of the

rate and enter the result.

Railroad Retirement Act of 1974. Each quarter, the Railroad

Retirement Board will furnish you with Form G-245, Summary

Line 16. Adjustments to Taxes Based on

Statement of Quarterly Report of Railroad Retirement

Compensation

Supplemental Tax Credits, showing your supplemental annuity

work-hour tax credit. Total the amounts shown on Forms

Use line 16 to show (a) corrections of underpayments or

G-245 and enter the total on line 3. Attach a copy of each Form

overpayments of taxes reported on prior year returns, (b)

G-245 to Form CT-1. The credit cannot exceed the amount on

credits for overpayments of penalty or interest paid on tax for

line 1, and any excess cannot be claimed on line 16.

earlier years, and (c) a fractions of cents adjustment. See

If the amount you enter on line 3 differs from the total

Fractions of cents on page 6. Do not include the 2000

amount shown on Forms G-245, attach an explanation to Form

overpayment that is applied to this year’s return (this is included

CT-1. Include the amounts from Forms G-245 in your

on line 19). If you are reporting both an addition and a

explanation.

subtraction, enter only the difference between the two on line

16. You cannot claim any excess credit from line 3 here. Enter:

If you need to make changes to Forms G-245, you must

first contact the Railroad Retirement Board at the

1. Adjustments for sick pay and fractions of cents in their

following address.

entry spaces,

CAUTION

Chief of Employer Services and Training

2. The amount of all other adjustments in the “Other” entry

Railroad Retirement Board

space, and

844 Rush Street

3. The total of the three types of adjustments in the line 16

Chicago, IL 60611

entry space to the right.

-5-

Instructions For Form Ct-1 - Employer'S Annual Railroad Retirement Tax Return - 2001 Page 6

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