Instructions For Form Ct-1 - 2016 (Page 6 of 8) in pdf

Line 6—Tier 1 Employee Additional

Specific Instructions

Medicare Tax Withholding

Final Return

Enter the compensation, including tips reported (but

If you stop paying taxable compensation and won't have to

excluding sick pay) that is subject to Tier 1 Employee

file Form CT-1 in the future, you must file a final return and

Additional Medicare Tax withholding. You’re required to

check the final return box at the top of Form CT-1 under

begin withholding Tier 1 Employee Additional Medicare Tax

“2016.” The final return should be accompanied by a

in the pay period in which you pay compensation in excess of

statement providing the last date on which you paid

$200,000 to an employee and continue to withhold it each

compensation that you reported on Form CT-1, the address

pay period until the end of the calendar year. Tier 1

at which the records for your Forms CT-1 will be kept, and

Employee Additional Medicare Tax is only imposed on the

employee. There is no employer share of Tier 1 Additional

the name of the person keeping the records. If the business

Medicare Tax. All compensation (including sick pay) that is

has been transferred to another person, the statement should

subject to Tier 1 Medicare tax is subject to Tier 1 Employee

include the name and address of the transferee and the date

Additional Medicare Tax if paid in excess of the $200,000

of the transfer. If the business wasn't transferred or the

withholding threshold.

transferee isn't known, the statement should so state.

Processing of your return may be delayed if you don't

Visit IRS.gov and enter “Additional Medicare Tax” in the

provide the required amounts in the Compensation

search box for more information on Tier 1 Employee

and Tax columns.

Additional Medicare Tax.

CAUTION

Line 7—Tier 2 Employee Tax

Line 1—Tier 1 Employer Tax

Enter the compensation, including tips reported, subject to

Enter the compensation (other than tips and sick pay) subject

Tier 2 Employee tax in the Compensation column. Only the

to Tier 1 Employer tax in the Compensation column. Multiply

first $88,200 of the employee's compensation (including tips)

by 6.2% and enter the result in the Tax column. The total

for 2016 is subject to this tax. Multiply by 4.9% and enter the

amount listed in the Compensation column for lines 1 and 8

result in the Tax column. For information on reporting tips,

combined may not be more than $118,500 per employee.

see Tips, earlier.

Line 2—Tier 1 Employer Medicare Tax

Any compensation paid during the current year that

Enter the compensation (other than tips and sick pay) subject

was earned in prior years (reported to the Railroad

to Tier 1 Employer Medicare tax in the Compensation

Retirement Board on Form BA-4, Report of

CAUTION

column. Multiply by 1.45% and enter the result in the Tax

Creditable Compensation Adjustments) is taxable at the

column.

current year tax rates, unless special timing rules for

nonqualified deferred compensation apply. See Pub.15-A.

Line 3—Tier 2 Employer Tax

Include such compensation with current year compensation

Enter the compensation (other than tips) subject to Tier 2

on lines 1–7, as appropriate.

Employer tax in the Compensation column. Don't enter more

Lines 8–12—Tier 1 Taxes on Sick Pay

than $88,200 per employee. Multiply by 13.1% and enter the

result in the Tax column.

Enter any sick pay payments during the year that are subject

Line 4—Tier 1 Employee Tax

to Tier 1 taxes, Tier 1 Medicare taxes, and Tier 1 Employee

Additional Medicare Tax withholding in the Compensation

Enter the compensation, including tips reported (but

column. Multiply by the rate for the line and enter the result in

excluding sick pay), subject to Tier 1 Employee tax in the

the Tax column for that line. For Tier 1 Employer taxes, the

Compensation column. Multiply by 6.2% and enter the result

total amount listed in the Compensation column for lines 1

in the Tax column. The total amount listed in the

and 8 combined may not be more than $118,500 per

Compensation column for lines 4 and 10 combined may not

employee. For Tier 1 Employee taxes, the total amount listed

be more than $118,500 per employee.

in the Compensation column for lines 4 and 10 combined

may not be more than $118,500 per employee. Tier 1

Stop collecting the 6.2% Tier 1 Employee tax when the

Medicare taxes aren't subject to a dollar limitation.

employee's compensation (including sick pay) and tips

reach the maximum for the year ($118,500 for 2016).

All compensation (including sick pay) that is subject to

However, your liability for Tier 1 Employer tax on

Tier 1 Medicare tax is subject to Tier 1 Employee Additional

compensation continues until the compensation (including

Medicare Tax if paid in excess of the $200,000 withholding

sick pay), but not including tips, totals $118,500 for the

threshold.

year.

If you’re a railroad employer paying your employees sick

Line 5—Tier 1 Employee Medicare

pay, or a third-party payer who didn't notify the employer of

Tax

the payments (thereby subject to the employee and employer

tax), make entries on lines 8–12. If you’re subject to only the

Enter the compensation, including tips reported (but

employer or employee tax, complete only the applicable

excluding sick pay), subject to Tier 1 Employee Medicare tax

lines. Multiply by the appropriate rates and enter the results

in the Compensation column. Multiply by 1.45% and enter

in the Tax column.

the result in the Tax column. For information on reporting

Line 13—Total Tax Based on

tips, see Tips, earlier.

Compensation

Add lines 1 through 12 and enter the result on line 13.

-6-

Instructions for Form CT-1 (2016)

Instructions For Form Ct-1 - 2016 Page 6

Related Articles

Related forms

Related Categories