Instructions For Form Ct-1 - 2011 (Page 4 of 8) in pdf

to each tax is different. See the table above for the 2011 tax

Deposit Rule under Exceptions to the Deposit Rules, later.

rates and compensation bases.

The terms “monthly schedule depositor” and “semiweekly

schedule depositor” identify which set of rules you must

Concurrent employment. If two or more related

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

corporations that are rail employers employ the same

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

individual at the same time and pay that individual through a

business pays its employees or to how often you are

common paymaster that is one of the corporations, the

required to make deposits.

corporations are considered a single employer. They have

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

If you were a monthly schedule depositor for the entire

single employer would. See Regulations section

year, please complete the Monthly Summary of Railroad

31.3121(s)-1 for more information.

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

Successor employers. Successor employers should see

a semiweekly schedule depositor during any part of the year

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

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

can use the predecessor’s compensation paid against the

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

maximum compensation bases.

Record of Federal Tax Liability.

Employee Taxes

Lookback Period

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

Before each year begins, you must determine the deposit

taxes. See the table under Employer and Employee Taxes,

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

later, for the tax rates and compensation bases. See Tips

calendar year. This is determined from the total taxes

below for information on the employee tax on tips.

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

Withholding or payment of employee tax by employer.

period. The lookback period is the second calendar year

You must collect the employee railroad retirement tax from

preceding the current calendar year. For example, the

each employee by deducting it from the compensation on

lookback period for calendar year 2012 is calendar

year 2010.

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

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

Use the table below to determine which deposit schedule

much or too little tax because you cannot determine the

to follow for 2012.

correct amount, correct the amount withheld by an

adjustment, credit, or refund according to the applicable

IF you reported taxes

THEN for 2012 you are a...

regulations.

for the lookback period (2010)

of...

If you pay the railroad retirement tax for your employee

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

$50,000 or less

Monthly schedule depositor

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

the proper amounts.

More than $50,000

Semiweekly schedule depositor

Tips. The reporting requirement for tips only applies to

cash tips. An employee who receives cash tips must report

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

them to you by the 10th of the month following the month

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

the tips are received. Cash tips must be reported for every

Therefore, you are a monthly schedule depositor for the first

month, unless the cash tips for the month are less than $20.

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

An employee must furnish you with a written (or

Next-Day Deposit Rule, later.

electronic) statement of cash tips, signed by the employee,

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

Example. Employer A reported Form CT-1 taxes as

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

follows:

•

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

2010 Form CT-1 — $49,000

•

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

2011 Form CT-1 — $52,000

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

Employer A is a monthly schedule depositor for 2012

and forms to report tips to employers, is available by calling

because its Form CT-1 taxes for its lookback period

1-800-TAX-FORM (1-800-829-3676) or at IRS.gov.

(calendar year 2010) were not more than $50,000. However,

Tips are considered to be paid at the time the employee

for 2013, Employer A is a semiweekly schedule depositor

reports them to you. You must collect both federal income

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

tax and employee railroad retirement tax on cash tips

(calendar year 2011).

reported to you from the employee’s compensation (after

Adjustments and the lookback rule. To determine the

deduction of employee railroad retirement and federal

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

income tax related to the nontip compensation) or from other

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

funds the employee makes available. Apply the

any adjustments reported on that return for prior periods.

compensation or other funds first to the railroad retirement

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

tax and then to federal income tax. You do not have to pay

account in determining the taxes for that prior period. See

employer railroad retirement taxes on tips.

the instructions for Line 12, later.

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

Example. Employer B originally reported Form CT-1

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

taxes of $45,000 for the lookback period (2010).

employee funds available to deduct the employee tax, you

B discovered in March 2012 that the tax during the lookback

no longer have to collect it. Report uncollected Tier I

period (2010) was understated by $10,000 and will correct

Employee tax, Tier I Employee Medicare tax, and Tier II

this error with an adjustment on Form CT-1 X filed for 2010.

Employee tax on tips on line 12. See section 6 in Pub. 15

(Circular E).

B is a monthly schedule depositor for 2012 because the

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

Depositing Taxes

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

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

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

schedule depositor or a semiweekly schedule depositor.

2010 taxes or 2012 taxes. See Treasury Decision 9405 at

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

-3-

Instructions for Form CT-1 (2011)

Instructions For Form Ct-1 - 2011 Page 4

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