Instructions For Form Ct-1 - 2016 (Page 4 of 8) in pdf

Lookback Period

have a deposit requirement for April (due by May 15)

because no compensation was paid and, therefore, C

Before each year begins, you must determine the deposit

doesn't have a tax liability for the month.

schedule to follow for depositing Tier 1 and Tier 2 taxes for a

calendar year. This is determined from the total taxes

Semiweekly Schedule Depositor

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

period. The lookback period is the second calendar year

If you’re a semiweekly schedule depositor, use the table

preceding the current calendar year. For example, the

below to determine when to make deposits.

lookback period for calendar year 2017 is calendar year

2015.

Deposit Tier 1 and Tier 2 taxes

No later than...

for payments made on...

Use the table below to determine which deposit schedule

to follow for 2017.

Wednesday, Thursday, and/or

The following Wednesday

Friday

IF you reported taxes

THEN for 2017 you’re a...

Saturday, Sunday, Monday,

The following Friday

for the lookback period (2015)

and/or Tuesday

of...

$50,000 or less

Monthly schedule depositor

More than $50,000

Semiweekly schedule depositor

Example. Employer D, a semiweekly schedule depositor,

pays compensation on the last Saturday of each month.

Although D is a semiweekly schedule depositor, D will

deposit just once a month because D pays compensation

Example. Employer A reported Form CT-1 taxes as

only once a month. The deposit, however, will be made

follows.

under the semiweekly deposit schedule as follows: D's taxes

2015 Form CT-1—$49,000.

for the May 27, 2017 (Saturday), payday must be deposited

2016 Form CT-1—$52,000.

by June 2, 2017 (Friday). Under the semiweekly deposit rule,

Employer A is a monthly schedule depositor for 2017

taxes arising on Saturday through Tuesday must be

because its Form CT-1 taxes for its lookback period

deposited by the following Friday.

(calendar year 2015) weren't more than $50,000. However,

The last day of the calendar year ends the

for 2018, Employer A is a semiweekly schedule depositor

semiweekly deposit period and begins a new one.

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

(calendar year 2016).

CAUTION

New employer. If you’re a new employer, your taxes for

Deposits Due on Business Days Only

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

Therefore, you’re a monthly schedule depositor for the first

If a deposit is required to be made on a day that isn't a

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

business day, the deposit is considered to have been made

Next-Day Deposit Rule, later.

timely if it is made by the close of the next business day. A

business day is any day other than a Saturday, Sunday, or

Adjustments and the lookback rule. To determine the

legal holiday. For example, if a deposit is due on a Friday and

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

Friday is a legal holiday, the deposit will be considered timely

Form CT-1 taxes reported on your original return.

if it is made by the following Monday (if that Monday is a

Adjustments to a return for a prior period aren't taken into

business day). The term “legal holiday” for deposit purposes

account in determining the taxes for that prior period.

includes only those legal holidays in the District of Columbia.

Example. Employer B originally reported Form CT-1 taxes

For a list of legal holidays, see Pub. 15.

of $45,000 for the lookback period (2015). B discovered in

March 2017 that the tax during the lookback period (2015)

Semiweekly schedule depositors will always have at least

was understated by $10,000 and will correct this error with an

3 business days to make a deposit. If any of the 3 weekdays

adjustment on Form CT-1 X filed for 2015.

after the end of a semiweekly period is a legal holiday, you

B is a monthly schedule depositor for 2017 because the

have 1 additional day to deposit. For example, if you have

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

Form CT-1 taxes accumulated for payments made on Friday

originally reported ($45,000), which wasn't more than

and the following Monday is a legal holiday, the deposit

$50,000. For purposes of the lookback rule, the $10,000

normally due on Wednesday may be made on Thursday

adjustment doesn't affect either 2015 taxes or 2017 taxes.

(allowing 3 business days to make the deposit).

See Treasury Decision 9405 available at

2008-32_IRB/ar13.html.

Exceptions to the Deposit Rules

The two exceptions that apply to the above deposit rules are

When To Deposit

the:

Monthly Schedule Depositor

$2,500 Rule, and

$100,000 Next-Day Deposit Rule.

If you’re a monthly schedule depositor, deposit employer and

employee Tier 1 and Tier 2 taxes accumulated during a

$2,500 Rule. If your total Form CT-1 taxes for the year are

calendar month by the 15th day of the following month.

less than $2,500 and the taxes are fully paid with a timely

Example. Employer C is a monthly schedule depositor

filed Form CT-1, no deposits are required. However, if you’re

with seasonal employees. C paid compensation each Friday

unsure that you will accumulate less than $2,500, deposit

during March but didn't pay any compensation during April.

under the appropriate deposit rules so that you won't be

Under the monthly schedule deposit rule, C must deposit the

subject to deposit penalties.

combined taxes for the March paydays by April 15. C doesn't

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Instructions for Form CT-1 (2016)

Instructions For Form Ct-1 - 2016 Page 4

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