Instructions For Form Ct-1 X (Rev. February 2015) (Page 9 of 13) in pdf

paid to Employee B for 2014 was $220,000. You were

line 11 (column 1)

required to withhold $180 ($20,000 x .009) but you

-line 11 (column 2)

withheld nothing and did not report Employee B’s $20,000

line 11 (column 3)

If the amount in column 2 is larger

in compensation subject to Tier 1 Employee Additional

than the amount in column 1, use a

Medicare Tax withholding on line 6 of your 2014 Form

minus sign in column 3.

CT-1.

You discover both errors on March 16, 2015. Use Form

CT-1 X, line 11, to correct the errors as shown below.

Do not multiply the amount in column 3 by .009 (0.9%

tax rate). Leave column 4 blank and explain the reasons

Column 1 (corrected amount)

50,000.00

for this correction on line 23.

Column 2 (Form CT-1, line 6

- 3,000.00

(Compensation column))

Example—Prior year nonadministrative error

Column 3 (difference)

47,000.00

(failure to withhold Tier 1 Employee Additional

Medicare Tax when required). Employee B's

compensation exceeded the $200,000 withholding

Determine the portion of compensation reported in

threshold for Tier 1 Employee Additional Medicare Tax in

column 3 that is related to the administrative error

December 2014. The total compensation paid to

($47,000 - $20,000 (nonadministrative error) = $27,000

Employee B for 2014 was $220,000. You were required to

(administrative error)). Multiply this portion of column 3

withhold $180 ($20,000 x .009) but you withheld nothing

by .009 (0.9% tax rate) to determine your tax correction.

and did not report an amount on line 6 of your 2014 Form

CT-1. You discover the error on March 16, 2015. File

Difference related to administrative error

27,000.00

Form CT-1 X to correct the compensation subject to Tier 1

Tax rate (0.9%)

x .009

Employee Additional Medicare Tax withholding for your

2014 Form CT-1, but you may not correct the Tier 1

Column 4 (tax correction)

243.00

Employee Additional Medicare Tax withheld (column 4)

because the error involves a previous year and the

Be sure to explain the reasons for these corrections on

amount previously reported for the employee represents

line 23. You must also report that $20,000 of the amount

the actual amount withheld from the employee during

shown in column 3 was related to the correction of a prior

2014.

year nonadministrative error and $27,000 of the amount

Combination of prior year administrative and nonad-

shown in column 3 was related to the correction of an

ministrative errors. If you are reporting both

administrative error.

administrative errors and nonadministrative errors for the

same prior year, enter the total corrected amount in

12. Tier 2 Employee Tax—Compensation

column 1. In column 2, enter the amount you originally

If you are correcting the compensation, including tips

reported or as previously corrected. In column 3, enter the

reported, for the Tier 2 Employee tax you reported on

difference between columns 1 and 2. However, multiply

Form CT-1, line 7 (line 6 for years ending before January

only the amount of compensation reported in column 3

1, 2013), enter the total corrected amount in column 1. In

that is related to administrative errors by .009 (0.9% tax

column 2, enter the amount you originally reported or as

rate). Do not multiply any compensation reported in

previously corrected. In column 3, enter the difference

column 3 that was related to nonadministrative errors

between columns 1 and 2.

by .009 (0.9% tax rate). Use line 23 to explain in detail

your corrections. The explanation must include the

line 12 (column 1)

reasons for the corrections and a breakdown of the

-line 12 (column 2)

amount reported in column 3 into the amounts related to

line 12 (column 3)

If the amount in column 2 is larger

administrative errors and nonadministrative errors.

than the amount in column 1, use a

Example—Combination of prior year

minus sign in column 3.

administrative and nonadministrative errors.

Employee A's compensation exceeded the $200,000

withholding threshold for Tier 1 Employee Additional

Multiply the amount in column 3 by the rate stated on

Medicare Tax in November 2014. The total compensation

line 7 (line 6 for years ending before January 1, 2013)

paid to Employee A for 2014 was $230,000. You withheld

of the Form CT-1 for the year that you are correcting

$270 ($30,000 x .009) from the employee's

and enter the result in column 4. If the amount in column 3

compensation. However, on your 2014 Form CT-1 you

used a minus sign, also use a minus sign in column 4.

mistakenly reported $3,000 on line 6 (Compensation

column), and Tier 1 Employee Additional Medicare Tax

Example—Tier 2 Employee compensation

withheld of $27 on line 6 (Tax column). The difference in

decreased. Following Example—Tier 1 Employer

compensation subject to Tier 1 Employee Additional

compensation decreased in the instructions for line 6, the

Medicare Tax related to this administrative error is

compensation that you counted twice was also Tier 2

$27,000 ($30,000 - $3,000).

Employee compensation. Because you are correcting

your 2013 Form CT-1 in this example, use the rate for

Employee B's compensation exceeded the $200,000

line 7 (4.4%) shown on that return. To correct the error,

withholding threshold for Tier 1 Employee Additional

figure the difference on Form CT-1 X as shown.

Medicare Tax in December 2014. The total compensation

-9-

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

Instructions For Form Ct-1 X (Rev. February 2015) Page 9

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