Instructions For Form Ct-1 X (Rev. February 2015) (Page 12 of 13) in pdf

22. Did You Reclassify Any Workers?

Amount you owe. If the amount entered on line 20 is a

positive number, you must pay the amount you owe by the

Check the box on line 22 if you reclassified any workers to

time you file Form CT-1 X. You may not use any credit that

be independent contractors or nonemployees. Also check

you show on another Form CT-1 X to pay the amount you

this box if the IRS (or you) determined that workers you

owe, even if you filed for the amount you owe and the

treated as independent contractors or nonemployees

credit at the same time.

should be classified as employees. On line 23, provide a

detailed reason why any worker was reclassified.

If you owe tax and are filing a timely Form CT-1 X, do

not file an amended Form 945-A unless you were

Return not filed because you did not treat any work-

assessed an FTD penalty caused by an incorrect,

ers as employees. If you did not previously file Form

incomplete, or missing Form 945-A. Do not include the tax

CT-1 because you mistakenly treated all workers as

increase reported on Form CT-1 X on any amended Form

independent contractors or as nonemployees, file a Form

945-A you file.

CT-1 for each delinquent year.

If you owe tax and are filing a late Form CT-1 X, that is,

Write “Misclassified Employees” in bold letters

after the due date for Form CT-1 for the period in which

across the top margin of page 1 of each Form CT-1.

you discovered the error, you must file an amended Form

Complete Form CT-1 using the Instructions for Form

945-A with the Form CT-1 X. Otherwise, the IRS may

CT-1. Attach a Form CT-1 X to each Form CT-1.

assess an “averaged” FTD penalty. The total tax reported

Complete the top of Form CT-1 X, including the date you

on Form 945-A, line M, must match the corrected tax

discovered the error, and provide a detailed explanation

(Form CT-1, line 15 (line 13 for years ending before

on line 23.

January 1, 2013), combined with any correction reported

on Form CT-1 X, line 20) for the year, less any previous

23. Explain Your Corrections

abatements and interest-free tax assessments.

Treasury regulations require you to explain in detail the

Payment methods. You may pay the amount you owe

grounds and facts relied upon to support each correction.

on line 20 electronically using the Electronic Federal Tax

On line 23, describe in detail each correction you entered

Payment System (EFTPS) or by a check or money order.

in column 4 on lines 6–18. If you need more space, attach

The preferred method of payment is EFTPS. For more

additional sheets, but be sure to write your name, EIN,

information, visit , call EFTPS Customer

“Form CT-1 X,” and calendar year you are correcting on

Service at 1-800-555-4477 or 1-800-733-4829 (TDD) toll

the top of each sheet.

free, or see Pub. 966, Electronic Federal Tax Payment

You must describe the events that caused the

System: A Guide To Getting Started.

underreported or overreported amounts. Explanations

If you pay by check or money order, make it payable to

such as “RRTA compensation was overstated” or

“United States Treasury.” On your check or money order,

“administrative/payroll errors were discovered” are

be sure to write your EIN, “Form CT-1 X,” and the year

insufficient and may delay the processing of your Form

corrected.

CT-1 X because the IRS may need to ask for a more

You do not have to pay if the amount you owe is less

complete explanation.

than $1.

Previously assessed FTD penalty. If line 20 reflects

Provide the following information in your explanation of

overreported tax and the IRS previously assessed an FTD

each correction.

penalty, you may be able to reduce the penalty. For more

Form CT-1 X line number(s) affected.

information, see the Form 945-A instructions.

Date you discovered the error.

Part 4: Explain Your Corrections for

Difference (amount of the error).

Cause of the error.

The Calendar Year You Are

You may report the information in paragraph form. The

Correcting

following paragraph is an example.

“The $1,000 difference shown in column 3 of lines 6

21. Correction of Both Underreported and

and 7 was discovered on May 14, 2014, during an internal

Overreported Amounts

payroll audit. We discovered that we included $1,000 of

Check the box on line 21 if any corrections you entered on

compensation for one of our employees twice. This

lines 6–18 in column 3 reflect both underreported and

correction removes the reported compensation that was

overreported amounts.

never paid.”

Example. If you had an increase to Tier 1 Employer

Part 5: Sign Here

compensation of $15,000 for employee A and a decrease

to Tier 1 Employer compensation of $5,000 for employee

You must complete all three pages of Form CT-1 X and

B, you would enter $10,000 on line 6, column 3. That

sign it on page 3. If you do not sign, the processing of

$10,000 represents the net change resulting from

Form CT-1 X will be delayed.

corrections.

Who must sign the Form CT-1 X? The following

On line 23, you must explain the reason for both the

persons are authorized to sign the return for each type of

$15,000 increase and the $5,000 decrease.

business entity.

Sole proprietorship—The individual who owns the

business.

-12-

Instructions for Form CT-1 X (Rev. 2-2015)

Instructions For Form Ct-1 X (Rev. February 2015) Page 12

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