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Use Form CT-1 X to correct errors on a Form CT-1 that you previously filed. Use Form CT-1 X to correct:
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Tier I Employee tax, Tier I Employee Medicare tax, Tier II Employee tax; and
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Tier I Employer tax, Tier I Employer Medicare tax, Tier II Employer tax.
If you did not file a Form CT-1 for one or more years, do not use Form CT-1 X. Instead, file Form CT-1 for each of those years. See also When Should You File Form CT-1 X? below.
However, if you did not file Forms CT-1 because you improperly treated workers as independent contractors or nonemployees and are now reclassifying them as employees, see the instructions for line 19 on page 7.
You have additional requirements to complete when filing Form CT-1 X, such as certifying that you filed (or will file) all applicable Forms W-2 and Forms W-2c. For corrections of overreported Tier I and Tier II taxes, you must make any certifications that apply to your situation.
Be sure to give us a detailed explanation on line 20 for each correction that you show on Form CT-1 X.
For help filing Form CT-1 X or for questions about RRTA taxes and tax corrections, you can:
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Call the IRS toll-free at 1-800-829-4933 (TTY/TDD for the hearing impaired at 1-800-829-4059),
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Visit the IRS website at www.irs.gov/businesses and type “Correcting Employment Taxes,” in the search box, or
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Get Pub. 15 (Circular E), Employer's Tax Guide.
See also How Can You Order Forms and Publications from the IRS? on page 8.
File Form CT-1 X when you discover an error on a previously filed Form CT-1.
However, if your only errors on Form CT-1 relate to RRTA tax liabilities reported in Part II of Form CT-1 or on Form 945-A, Annual Record of Federal Tax Liability, do not file Form CT-1 X. For more information about correcting RRTA tax liabilities reported in Part II of Form CT-1 or on Form 945-A, see the instructions for Form 945-A.
Example—You owe tax:
On March 11, 2010, you discover that you underreported $1,000 of RRTA compensation on your 2008 Form CT-1. File Form CT-1 X and pay the amount you owe by February 28, 2011, because you discovered the error in 2010, and February 28, 2011, is the due date for that year. If you file Form CT-1 X before February 28, 2011, pay the amount you owe when you file.
Example—You want your credit applied to Form CT-1:
You filed and paid your 2008 Form CT-1 on February 27, 2009. On May 1, 2009, you discover that you overreported tax on your 2008 Form CT-1. You file Form CT-1 X on June 1, 2009. The IRS treats your credit as a tax deposit made on January 1, 2009. When you file your 2009 Form CT-1, include the amount from line 17 of Form CT-1 X on line 14 (“Total railroad retirement tax deposits”) of your 2009 Form CT-1.
Generally, you may correct overreported taxes on a previously filed Form CT-1 if you file Form CT-1 X within 3 years of the date Form CT-1 was filed or 2 years from the date you paid the tax reported on Form CT-1, whichever is later. You may correct underreported taxes on a previously filed Form CT-1 if you file Form CT-1 X within 3 years of the date the Form CT-1 was filed. We call each of these time frames a “period of limitations.” For purposes of the period of limitations, Form CT-1 is considered filed on the last day in February of the succeeding year if filed before that date.
Example:
You filed your 2007 Form CT-1 on January 28, 2008, and payments were timely made. (The IRS treats the return as if it were filed on February 29, 2008.) On January 20, 2011, you discover that you overreported RRTA compensation on that form by $10,000. To correct the error you must file Form CT-1 X by February 28, 2011, which is the end of the period of limitations, and use the claim process.
If you file Form CT-1 X to correct overreported amounts in the last 90 days of a period of limitations (after November 30, 2010, in the example above), you must use the claim process. You cannot use the adjustment process. If you are also correcting underreported amounts, you must use the adjustment process to file another Form CT-1 X to correct the underreported amounts only and pay any tax due.
Send your completed Form CT-1 X to:
Department of the Treasury
Internal Revenue Service Center
Cincinnati, OH 45999-0007
Use a separate Form CT-1 X for each Form CT-1 that you are correcting. For example, if you found errors on your Forms CT-1 for 2007 and 2008, file one Form CT-1 X to correct the 2007 Form CT-1. File a second Form CT-1 X to correct the 2008 Form CT-1.
Enter your EIN, name, and address in the spaces provided. Also enter your name and EIN on the top of pages 2 and 3, and on any attachments. If your address has changed since you filed your Form CT-1, enter the corrected information and the IRS will update your address of record.
Enter the calendar year of the Form CT-1 you are correcting at the top of page 1. Enter the calendar year on pages 2 and 3, and on any attachments.
You must enter the date you discovered errors. If you are reporting several errors that you discovered at different times, enter the earliest date you discovered them here. On line 20 report any subsequent dates and related errors.
You must provide all of the information requested at the top of page 1 of Form CT-1 X. You must check one box (but not both) in Part 1. You must check the box on line 3 and any boxes that apply on lines 4 and 5. In Part 3, if any line does not apply, leave it blank. Complete Parts 4 and 5 as instructed.
Form CT-1 X uses negative numbers to show reductions in tax (credits) and positive numbers to show additional tax (amounts you owe).
When reporting a negative amount in columns 3 and 4, use a minus sign instead of parentheses. For example, enter “-10.59” instead of “(10.59).” However, if you are completing the return on your computer and your software only allows you to use parentheses to report negative amounts, you may use them.
You can help the IRS process Form CT-1 X timely and accurately if you follow these guidelines.
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Type or print your entries.
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Use Courier font (if possible) for all typed or computer-generated entries.
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Omit dollar signs. You may use commas and decimal points, if desired. Enter dollar amounts to the left of any preprinted decimal point and cents to the right of it.
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Always show an amount for cents. Do not round entries to whole dollars.
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Complete all three pages and sign Form CT-1 X on page 3.
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Staple multiple sheets in the upper-left corner.
Generally, your correction of an underreported amount will not be subject to a failure-to-pay penalty, failure-to-deposit penalty, or interest if you:
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File on time (by the due date of the year in which you discover the error),
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Pay the amount shown on line 17 when you file Form
CT-1 X, -
Enter the date you discovered the error, and
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Explain in detail the grounds and facts relied on to support the correction.
No correction will be eligible for interest-free treatment if (a) the amounts underrreported relate to an issue that was raised in an examination of a prior period, (b) you knowingly underreported your employment tax liability, (c) you received a notice and demand for payment after assessment, or (d) you received a Notice of Determination of Worker Classification.
The new process for adjusting Form CT-1 or filing a claim is outlined below.
If you underreported the tax on a previously filed Form CT-1, check the box on line 1 and pay any additional amount you owe when you file Form CT-1 X. For details on how to make a payment, see the instructions for line 17 on page 7.
Example—You underreported RRTA taxes:
On June 21, 2010, you discover an error that results in additional tax on your 2008 Form CT-1. File Form CT-1 X by February 28, 2011, and pay the amount you owe when you file. See When Should You File Form CT-1 X? on page 1. Do not attach Form CT-1 X to your 2010 Form CT-1.
If you overreported the tax on a previously filed Form CT-1, you may choose to:
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Use the adjustment process. Check the box on line 1 to apply any credit (negative amount) from line 17 to Form CT-1 for the year during which you file Form CT-1 X, or
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Use the claim process. Check the box on line 2 to file a claim on Form CT-1 X requesting a refund or abatement of the amount shown on line 17.
To ensure that the IRS has enough time to process a credit for an overreporting adjustment in the year during which you file Form CT-1 X, you are encouraged to file Form CT-1 X correcting the overreported amount in the first eleven months of a year. For example, if you discover an overreported amount in December, you may want to file Form CT-1 X in the first eleven months of the next year. This should ensure that the IRS will have enough time to process the Form CT-1 X so that the credit will be posted before you file Form CT-1, thus avoiding an erroneous balance due notice from the IRS. See the example below.
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