Instructions For Form Ct-1 - Employer'S Annual Railroad Retirement Tax Return - Internal Revenue Service - 2007 Page 5
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7example, if a semiweekly schedule depositor has a deposit
Stop collecting the 6.2% Tier I employee tax when the
shortfall during January 2008, the shortfall makeup date is
employee’s wages and tips reach the maximum for the year
February 15, 2008 (Friday).
($97,500 for 2007). However, your liability for Tier I
employer tax on compensation continues until the
compensation, not including tips, totals $97,500 for the
Penalties and Interest
year.
The law provides penalties for failure to file a return, late
filing of a return, late payment of taxes, failure to make
Line 5. Tier I Employee Medicare Tax
deposits, or late deposits unless reasonable cause is
Enter the compensation, including tips reported, subject to
shown. Interest is charged on taxes paid late at the rate set
Tier I employee Medicare tax in the Compensation column.
by law. For more information, see Pub. 15 (Circular E).
Multiply by 1.45% and enter the result in the Tax column.
Order in which deposits are applied. Generally, tax
For information on reporting tips, see Tips on page 3.
deposits are applied first to the most recent tax liability
within the specified tax period to which the deposit relates. If
Line 6. Tier II Employee Tax
you receive a failure to deposit penalty notice, you may
Enter the compensation, including tips reported, subject to
designate how your payment is to be applied in order to
Tier II employee tax in the Compensation column. Only the
minimize the amount of the penalty. You must respond
first $72,600 of the employee’s compensation for 2007 is
within 90 days of the date of the notice. Follow the
subject to this tax. Multiply by 3.9% and enter the result in
instructions on the notice you received. See Rev. Proc.
the Tax column. For information on reporting tips, see Tips
2001-58 for more information. You can find Rev. Proc.
on page 3.
2001-58 on page 579 of Internal Revenue Bulletin 2001-50
at
Any compensation paid during the current year that
!
Trust fund recovery penalty. If taxes that must be
was earned in prior years (reported to the Railroad
withheld are not withheld or are not deposited or paid to the
Retirement Board on Form BA-4, Report of
CAUTION
United States Treasury, the trust fund recovery penalty may
Creditable Compensation Adjustments) is taxable at the
apply. The penalty is 100% of the unpaid taxes. This penalty
current year tax rates. Include such compensation with
may apply to you if these unpaid taxes cannot be
current year compensation on lines 1 through 6, as
immediately collected from the employer or business. The
appropriate.
trust fund recovery penalty may be imposed on all persons
who are determined by the IRS to be responsible for
Lines 7 Through 10. Tier I Taxes on
collecting, accounting for, and paying over these taxes, and
Sick Pay
who acted willfully in not doing so. For more information, see
Pub. 15 (Circular E).
Enter any sick pay payments during the year that are
subject to Tier I taxes and Tier I Medicare taxes in the
Compensation column. If you are a railroad employer paying
Specific Instructions
your employees sick pay, or a third-party payer who did not
notify the employer of the payments (thereby subject to the
Final return. If you stop paying taxable compensation and
employee and employer tax), make entries on lines 7
will not have to file Form CT-1 in the future, you must file a
through 10. If you are subject to only the employer or
final return and check the Final return box at the top of Form
employee tax, complete only the applicable lines. Multiply by
CT-1 under “2007.”
the appropriate rates and enter the results in the
Tax column.
Processing of your return may be delayed if you do
!
not provide the required amounts in the
Line 12. Adjustments to Taxes Based
Compensation and Tax columns.
CAUTION
on Compensation
Line 1. Tier I Employer Tax
Enter on line 12:
•
Enter the compensation (other than tips and sick pay)
A sick pay adjustment,
•
subject to Tier I employer tax in the Compensation column.
A fractions of cents adjustment (see Fractions of cents on
Do not enter more than $97,500 per employee. Multiply by
page 6),
•
6.2% and enter the result in the Tax column.
Corrections of underpayments or overpayments of taxes
reported on prior year returns, including any adjustments
Line 2. Tier I Employer Medicare Tax
resulting from an audit by the RRB, and
•
Credits for overpayments of penalty or interest paid on tax
Enter the compensation (other than tips and sick pay)
for earlier years.
subject to Tier I employer Medicare tax in the Compensation
column. Multiply by 1.45% and enter the result in the
Enter the total of these adjustments in the Tax column. If
Tax column.
you are reporting both an addition and a subtraction, enter
only the difference between the two on line 12. If the net
Line 3. Tier II Employer Tax
adjustment is negative, report the amount on line 12 using a
minus sign, if possible. If your computer software does not
Enter the compensation (other than tips) subject to Tier II
allow the use of minus signs, you may use parentheses.
employer tax in the Compensation column. Do not enter
more than $72,600 per employee. Multiply by 12.1% and
Do not include on line 12 the 2006 overpayment that is
enter the result in the Tax column.
applied to this year’s return (this is included on line 14).
Required statement. Except for adjustments for fractions
Line 4. Tier I Employee Tax
of cents, explain amounts entered on line 12 in a separate
Enter the compensation, including tips reported, subject to
statement. Include your name, employer identification
Tier I employee tax in the Compensation column. Do not
number (EIN), calendar year of the return, and “Form CT-1”
enter more than $97,500 per employee. Multiply by 6.2%
on each page you attach. Include in the statement the
and enter the result in the Tax column.
following information.
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