Specific Instructions

Part 1: Select ONLY One Process

Because Form CT-1 X may be used to file either an adjusted railroad retirement tax return or a claim for refund or abatement, you must check one box on either line 1 or line 2. Do not check both boxes.

1. Adjusted Railroad Retirement Tax Return

Check the box on line 1 if you are correcting underreported amounts or overreported amounts and you would like to use the adjustment process to correct the errors.

If you are correcting both underreported amounts and overreported amounts on this form, you must check this box. If you check this box, any negative amount shown on line 18 will be applied as a credit (tax deposit) to your Form CT-1 for the year in which you are filing this form. See Example—You want your overreported tax applied as a credit to Form CT-1, earlier.

If you owe tax.   Pay the amount shown on line 18 by the time you file Form CT-1 X. Generally, you will not be charged interest if you file on time, pay on time, enter the date you discovered the error, and explain the correction on line 21.

If you have a credit.   You overreported RRTA taxes (you have a negative amount on line 18) and want the IRS to apply the credit to Form CT-1 for the period during which you filed Form CT-1 X. The IRS will apply your credit on the first day of the Form CT-1 year during which you filed Form CT-1 X. However, the credit you show on Form CT-1 X, line 18, may not be fully available on your Form CT-1 if the IRS corrects it during processing or you owe other taxes, penalties, or interest. The IRS will notify you if your claimed credit changes or if the amount available as a credit on Form CT-1 was reduced because of unpaid taxes, penalties, or interest.

  
Do not check the box on line 1 if you are correcting overreported amounts and the period of limitations on credit or refund for Form CT-1 will expire within 90 days of the date you file Form CT-1 X. Instead, check the box on line 2. See Is There a Deadline for Filing Form CT-1 X, earlier.

2. Claim

Check the box on line 2 to use the claim process if you are correcting overreported amounts only and you are claiming a refund or abatement for the negative amount (credit) shown on line 18. Do not check this box if you are correcting any underreported amounts on this form.

You must check the box on line 2 if you have a credit and the period of limitations on credit or refund for Form CT-1 will expire within 90 days of the date you file Form CT-1 X. See Is There a Deadline for Filing Form CT-1 X, earlier.

The IRS usually processes claims shortly after they are filed. The IRS will notify you if your claim is denied, accepted as filed, or selected to be examined. See Pub. 556, Examination of Returns, Appeal Rights, and Claims for Refund, for more information.

Unless the IRS corrects Form CT-1 X during processing or you owe other taxes, penalties, or interest, the IRS will refund the amount shown on line 18, plus any interest that applies.

Part 2: Complete the Certifications

You must complete all certifications that apply by checking the appropriate boxes. If all of your corrections relate to underreported amounts, complete line 3 only; skip lines 4 and 5 and go to Part 3.

If your corrections relate to overreported amounts, you have a duty to ensure that your employees' rights to recover overpaid Employee RRTA taxes that you withheld are protected. The certifications on lines 4 and 5 address the requirement to:

  • Repay or reimburse your employees for the overcollection of Employee RRTA taxes, or

  • Obtain consents from your employees to file a claim on their behalf.

For purposes of these certifications, Employee RRTA taxes consist of Tier I Employee tax, Tier I Employee Medicare tax, and Tier II Employee tax. Employer RRTA taxes consist of Tier I Employer tax, Tier I Employer Medicare tax, and Tier II Employer tax.

3. Filing Forms W-2 or Forms W-2c

Check the box on line 3 to certify that you filed or will file Forms W-2 or Forms W-2c, as required, showing your employees' correct wage and tax amounts. See the General Instructions for Forms W-2 and W-3 for detailed information about filing requirements.

You must check the box on line 3 to certify that you filed Forms W-2 or Forms W-2c even if your corrections on Form CT-1 X do not change amounts shown on those forms. For example, if your only correction to Form CT-1 involves misstated tax adjustments (see the instructions for line 16), check the box on line 3 to certify that you already filed all required Forms W-2 and W-2c with the Social Security Administration (SSA).

4. Certifying Overreporting Adjustments

If you overreported RRTA tax and checked the box on line 1, check the appropriate box on line 4. You may need to check more than one box. If you obtained written statements from some employees but you could not locate or secure the cooperation of the remaining employees, check all applicable boxes. Provide a summary on line 21 of the amount of the corrections for both the employees who provided written statements and for those who did not.

4a.   Check the box on line 4a if your overreported amount includes each affected employee's share of overcollected Employee RRTA taxes. You are certifying that you repaid or reimbursed the prior year Employee RRTA taxes and you received written statements from the employees stating that they did not and will not receive a refund or credit for the prior year taxes.

Example.

The following is an example of the written statement that is required from employees.

Employee name

Employer name

I have received a repayment of $_________ as overcollected RRTA taxes for 20___. I have not claimed a refund of or credit for the overcollected taxes from the IRS or, if I did, that claim has been rejected; and I will not claim a refund or a credit of the amount.

Employee signature

Date

   Do not send these statements to the IRS. Keep them for your records. Generally, all employment tax records must be kept for at least 4 years.

4b.   Check the box on line 4b to certify that your overreported amount is only for Employer RRTA taxes on those employees whom you were unable to find or those who would not (or could not) give you a statement described on line 4a.

4c.   Check the box on line 4c to certify that your overreported amount is only for RRTA taxes that you did not withhold from your employees.

5. Certifying Claims

If you are filing a claim for refund or abatement of overreported RRTA tax and checked the box on line 2, check the appropriate box on line 5. You may need to check more than one box. If you obtained written statements or consents from some employees but you could not locate or secure the cooperation of the remaining employees, check all applicable boxes. Provide a summary on line 21 of the amount of the corrections for the employees who provided statements or consents and those who did not.

5a.   Check the box on line 5a if your overreported tax includes overcollected Employee RRTA taxes for each affected employee. You are certifying that you repaid or reimbursed to the employees their share of the prior year Employee RRTA taxes and you received written statements from those employees stating that they did not and will not receive a refund or credit for the prior year taxes.

5b.   Check the box on line 5b if your overreported tax includes overcollected prior year Employee RRTA taxes for each affected employee and you have not yet repaid or reimbursed the Employee RRTA taxes. You are certifying that you received consent from each affected employee to file a claim on the employee share of those taxes and you received written statements from those employees stating that they did not and will not receive a refund or credit for the overcollected taxes.

Example.

The following is an example of the consent and written statement that is required from employees when you are filing a claim for refund and have not yet paid or reimbursed the employee share of taxes.

Employee name

Employer name

I give my consent to have my employer (named above) file a claim on my behalf with the IRS requesting $_________ in overcollected RRTA taxes for 20___. I have not claimed a refund of or credit for the overcollected taxes from the IRS or, if I did, that claim has been rejected; and I will not claim a refund or a credit of the amount.

Employee signature

Date

Do not send these statements to the IRS. Keep them for your records. Generally, all employment tax records must be kept for at least 4 years.

In certain situations, you may not have repaid or reimbursed your employees or obtained their consents prior to filing a claim, such as in cases where the period of limitations on credit or refund is about to expire. In those situations, file Form CT-1 X, but do not check a box on line 5. Tell us on line 21 that you have not repaid or reimbursed employees or obtained consents. However, you must certify that you have repaid or reimbursed your employees or obtained consents before the IRS can grant the claim.

5c.   Check the box on line 5c to certify that your overreported tax is only for the Employer RRTA taxes. Affected employees did not give you consent to file a claim for refund for the Employee RRTA taxes, they could not be found, or they would not (or could not) give you a statement described on line 5b.

5d.   Check the box on line 5d to certify that your overreported amount is only for RRTA taxes that you did not withhold from your employees.

Part 3: Enter the Corrections for the Calendar Year You Are Correcting

What Amounts Should You Report in Part 3?

On lines 6a –17b, columns 1 and 2, show amounts for all of your employees, not just for those employees whose amounts you are correcting.

If a correction that you report in column 4 includes both underreported and overreported amounts (see the instructions for line 19), provide details for each error on line 21.

If you previously adjusted or amended Form CT-1 by using an attached statement, Form CT-1 X, Form 843, an “amended” Form CT-1, by filing a “supplemental” Form CT-1, or because of an IRS examination change, show amounts in column 2 that include those previously reported corrections.

6a Through 6c: Tier I Employer Tax—Compensation

6a. Correcting Total Tier I Employer–Compensation

If you are correcting the compensation (other than tips and sick pay) for the Tier I Employer tax you reported on Form CT-1, line 1 (line 1a for 2010), enter the total corrected amount for all employees in column 1. In column 2, enter the amount you originally reported. In column 3, enter the difference between columns 1 and 2. If you (or the IRS) previously corrected the amount reported on Form CT-1, line 1 (line 1a for 2010), enter in column 2 the amount after any previous corrections.

line 6a (column 1)        
-line 6a (column 2)        
line 6a (column 3)     If the amount in column 2 is larger than  
the amount in column 1, use a minus sign in column 3.

Multiply the amount in column 3 by .062 (6.2% tax rate) and enter the result in column 4.

line 6a (column 3)      
x.062      
line 6a (column 4)   If the amount in column 3 used a minus sign,  
also use a minus sign in column 4.

Example—Tier I Employer compensation decreased.

You reported $9,000 as Tier I Employer compensation in computing the tax on line 1 of your 2011 Form CT-1. In December of 2012, you discovered that you included $2,000 in compensation for one of your employees twice. To correct the error, figure the difference on Form CT-1 X as shown.

Column 1 (corrected amount) 7,000.00  
Column 2 (Form CT-1, line 1) - 9,000.00  
Column 3 (difference) -2,000.00  

Use the difference in column 3 to determine your tax correction.

Column 3 (difference)   -2,000.00  
Tax rate (6.2%)    x .062  
Column 4 (tax correction)   -124.00  

Be sure to explain the reasons for this correction on line 21.

Correcting Tier I Employer RRTA Tax Exemption

Lines 6b and 6c apply only to corrections to the 2010 Form CT-1.

Complete lines 6b, 6c, and 12b to correct the payroll tax exemption for your share (6.2%) of Tier I Employer tax on exempt compensation paid to one or more qualified employees from April 1–December 31, 2010.

You had to be a qualified employer to qualify for the Tier I Employer tax exemption. A qualified employer is any employer other than federal, state, and any related governmental entities. All public institutions of higher education and Indian tribal governments are also qualified employers.

You could have elected not to claim the Tier I exemption for a qualified employee. The election would have been made by not including that employee's compensation on lines 1c, 1d, and 7c of your 2010 Form CT-1.

A qualified employee is an employee who:

  • Began employment with you after February 3, 2010, and before January 1, 2011;

  • Certified by signed affidavit (Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit, or similar statement) under penalties of perjury that he or she had not been employed for more than 40 hours during the 60-day period (including 2009) ending on the date the employee began employment with you;

  • Was not employed by you to replace another employee unless the other employee separated from employment voluntarily or for cause (including downsizing); and

  • Was not related to you. An employee is related to you if he or she is your child or a descendent of your child, your sibling or stepsibling, your parent or ancestor of your parent, your stepparent, your niece or nephew, your aunt or uncle, or your in-law. An employee is also related to you if he or she is related to anyone who owns more than 50% of your outstanding stock or capital and profits interest or is your dependent or a dependent of anyone who owns more than 50% of your outstanding stock or capital and profits interest.

Exempt compensation is compensation paid to qualified employees for which you are exempt from paying your share (6.2%) of the Tier I Employer tax.

For more information about the employer's Tier I Employer tax exemption, visit IRS.gov and enter “HIRE Act” in the search box.

6b. Number of qualified employees paid exempt compensation including sick pay April 1–December 31, 2010.   Enter on line 6b, column 1, the total corrected number of qualified employees paid compensation including sick pay to which you applied the employer's Tier I tax exemption. Enter on line 6b, column 2, the total number of qualified employees originally reported on the previously filed 2010 Form CT-1, line 1c. On line 6b, column 3, enter the difference between columns 1 and 2.

Be sure to explain the reasons for this correction on line 21.

If you make a correction to line 6b, then you must complete line 6c.

6c. Exempt compensation (other than tips and sick pay) paid to qualified employees April 1–December 31, 2010.   Enter on line 6c, column 1, the total corrected amount from the previously filed 2010 Form CT-1, line 1d. Enter on line 6c, column 2, the amount you originally reported or as previously corrected. On line 6c, column 3, enter the difference between columns 1 and 2. If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Multiply the amount in column 3 by .062 (6.2% tax rate) and enter that result in column 4. However, to properly show the correction as a credit or balance due item, enter a positive number in column 3 as a negative number in column 4 or a negative number in column 3 as a positive number in column 4. See Correcting Tier I Employer RRTA Tax Exemption, earlier, for the definition of qualified employee and exempt compensation.

Be sure to explain the reasons for this correction on line 21.

If you make a correction to line 6c, then you must complete line 6b.

7. Tier I Employer Medicare Tax—Compensation

If you are correcting the compensation (other than tips and sick pay) for the Tier I Employer Medicare tax you reported on Form CT-1, line 2, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

line 7 (column 1)        
-line 7 (column 2)        
line 7 (column 3)     If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Multiply the amount in column 3 by .0145 (1.45% tax rate) and enter that result in column 4.

line 7 (column 3)      
x.0145      
line 7 (column 4)   If the amount in column 3 used a minus sign,  
also use a minus sign in column 4.

Example—Tier I Employer Medicare compensation decreased.

Following Example—Tier I Employer compensation decreased in the instructions for line 6a, the compensation that you counted twice was also Tier I Employer Medicare compensation. To correct the error, figure the difference on Form CT-1 X as shown.

Column 1 (corrected amount) 7,000.00  
Column 2 (Form CT-1, line 2) - 9,000.00  
Column 3 (difference) -2,000.00  

Use the difference in column 3 to determine your tax correction.

Column 3 (difference)   -2,000.00  
Tax rate (1.45%)    x .0145  
Column 4 (tax correction)   - 29.00  

Be sure to explain the reasons for this correction on line 21.

8. Tier II Employer Tax—Compensation

If you are correcting the compensation (other than tips) for the Tier II Employer tax you reported on Form CT-1, line 3, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

line 8 (column 1)        
-line 8 (column 2)        
line 8 (column 3)     If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Multiply the amount in column 3 by the rate stated on line 3 of the Form CT-1 for the year that you are correcting and enter that result in column 4. If the amount in column 3 used a minus sign, also use a minus sign in column 4.

Example—Tier II Employer compensation decreased.

Following Example—Tier I Employer compensation decreased in the instructions for line 6a, the compensation that you counted twice was also Tier II Employer compensation. Because you are correcting your 2011 Form CT-1 in this example, use the rate from line 3 (12.1%) shown on that return. To correct the error, figure the difference on Form CT-1 X as shown.

Column 1 (corrected amount) 7,000.00  
Column 2 (Form CT-1, line 3) - 9,000.00  
Column 3 (difference) -2,000.00  

Use the difference in column 3 to determine your tax correction.

Column 3 (difference)   -2,000.00  
Tax rate (12.1%)    x .121  
Column 4 (tax correction)   -242.00  

Be sure to explain the reasons for this correction on line 21.

9. Tier I Employee Tax—Compensation

If you are correcting the compensation, including tips reported, but excluding sick pay, for the Tier I Employee tax you reported on Form CT-1, line 4, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

line 9 (column 1)      
-line 9 (column 2)      
line 9 (column 3)   If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Multiply the amount in column 3 by .062 (.042 for corrections to a 2011 or 2012 return) and report that result in column 4.

line 9 (column 3)      
x .062**      
line 9 (column 4)   If the amount in column 3 used a minus sign,  
also use a minus sign in column 4.
**Use .042 for corrections to a 2011 or 2012 return.

Be sure to explain the reasons for this correction on line 21.

10. Tier I Employee Medicare Tax—Compensation

If you are correcting the compensation, including tips reported, but excluding sick pay, for the Tier I Employee Medicare tax you reported on Form CT-1, line 5, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

line 10 (column 1)        
-line 10 (column 2)        
line 10 (column 3)     If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Multiply the amount in column 3 by .0145 (1.45% tax rate) and enter that result in column 4.

line 10 (column 3)      
x .0145      
line 10 (column 4)   If the amount in column 3 used a minus sign,  
also use a minus sign in column 4.

Be sure to explain the reasons for this correction on line 21.

11. Tier II Employee Tax—Compensation

If you are correcting the compensation, including tips reported, for the Tier II Employee tax you reported on Form CT-1, line 6, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

line 11 (column 1)        
-line 11 (column 2)        
line 11 (column 3)     If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Multiply the amount in column 3 by the rate stated on line 6 of the Form CT-1 for the year that you are correcting and enter that result in column 4. If the amount in column 3 used a minus sign, also use a minus sign in column 4.

Example—Tier II Employee compensation decreased.

Following Example—Tier I Employer compensation decreased in the instructions for line 6a, the compensation that you counted twice was also Tier II Employee compensation. Because you are correcting your 2011 Form CT-1 in this example, use the rate for line 6 (3.9%) shown on that return. To correct the error, figure the difference on Form CT-1 X as shown.

Column 1 (corrected amount) 7,000.00  
Column 2 (Form CT-1, line 6) - 9,000.00  
Column 3 (difference) -2,000.00  

Use the difference in column 3 to determine your tax correction.

Column 3 (difference)   -2,000.00  
Tax rate (3.9%)    x .039  
Column 4 (tax correction)     -78.00  

Be sure to explain the reasons for this correction on line 21.

12a and 12b. Tier I Employer Tax—Sick Pay

12a. Correcting Tier I Employer tax—sick pay

If you are correcting the sick pay for the Tier I Employer tax you reported on Form CT-1, line 7 (line 7a for 2010), enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

line 12a (column 1)      
-line 12a (column 2)      
line 12a (column 3)   If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Multiply the amount in column 3 by .062 (6.2% tax rate) and enter that result in column 4.

line 12a (column 3)      
x .062      
line 12a (column 4)   If the amount in column 3 used a minus sign,  
also use a minus sign in column 4.

Example—Tier I Employer sick pay increased.

You reported $8,000 as Tier I Employer sick pay in computing the tax on line 7 of your 2011 Form CT-1. In December of 2012, you discovered that you overlooked $1,000 in sick pay for one of your employees. To correct the error, figure the difference on Form CT-1 X as shown.

Column 1 (corrected amount) 9,000.00  
Column 2 (Form CT-1, line 7) - 8,000.00  
Column 3 (difference) 1,000.00  

Use the difference in column 3 to determine your tax correction.

Column 3 (difference)   1,000.00  
Tax rate (6.2%)   x.062  
Column 4 (tax correction)     62.00  

Be sure to explain the reasons for this correction on line 21.

Line 12b applies only to corrections to the 2010 Form CT-1.

12b. Exempt sick pay paid to qualified employees April 1–December 31, 2010.   Enter the total corrected amount from the previously filed 2010 Form CT-1, line 7c in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2. If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

  Multiply the amount in column 3 by .062 (6.2% tax rate) and enter that result in column 4. However, to properly show the correction as a credit or balance due item, enter a positive number in column 3 as a negative number in column 4 or a negative number in column 3 as a positive number in column 4. See Correcting Tier I Employer RRTA Tax Exemption, earlier, for the definitions of qualified employee and exempt compensation.

  
If you make a correction to line 12b, then you must complete line 12a.

  Be sure to explain the reasons for this correction on line 21.

13. Tier I Employer Medicare Tax—Sick Pay

If you are correcting the sick pay for the Tier I Employer Medicare tax you reported on Form CT-1, line 8, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

line 13 (column 1)      
-line 13 (column 2)      
line 13 (column 3)   If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Multiply the amount in column 3 by .0145 (1.45% tax rate) and enter that result in column 4.

line 13 (column 3)      
x.0145      
line 13 (column 4)   If the amount in column 3 used a minus sign,  
also use a minus sign in column 4.

Be sure to explain the reasons for this correction on line 21.

14. Tier I Employee Tax—Sick Pay

If you are correcting the sick pay for the Tier I Employee tax you reported on Form CT-1, line 9, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

line 14 (column 1)      
-line 14 (column 2)      
line 14 (column 3)   If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Multiply the amount in column 3 by .062 (.042 for corrections to a 2011 or 2012 return) and enter that result in column 4.

line 14 (column 3)      
x .062**      
line 14 (column 4)   If the amount in column 3 used a minus sign,  
also use a minus sign in column 4.
**Use .042 for corrections to a 2011 or 2012 return.

Be sure to explain the reasons for this correction on line 21.

15. Tier I Employee Medicare Tax—Sick Pay

If you are correcting the sick pay for the Tier I Employee Medicare tax you reported on Form CT-1, line 10, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

line 15 (column 1)      
-line 15 (column 2)      
line 15 (column 3)   If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Multiply the amount in column 3 by .0145 (1.45% tax rate) and enter that result in column 4.

line 15 (column 3)      
x .0145      
line 15 (column 4)   If the amount in column 3 used a minus sign,  
also use a minus sign in column 4.

Be sure to explain the reasons for this correction on line 21.

16. Tax Adjustments

Do not enter an amount on line 16 unless you need to correct any current year adjustments reported on Form CT-1, line 12. However, if you need to correct sick pay adjustments for prior years reported on Form CT-1, line 12, include the corrections in the calculations of Form CT-1 X, lines 12–15.

Enter the corrected amount for tax adjustments in column 1. Enter the originally reported or previously corrected current year amount from Form CT-1, line 12, in column 2. In column 3, enter the difference between columns 1 and 2.

line 16 (column 1)      
-line 16 (column 2)      
line 16 (column 3)    

You may need to report negative numbers in any column. Make sure that the difference you enter in column 3 accurately represents the change to adjustments originally reported or previously corrected on Form CT-1, line 12.

Copy the amount in column 3 to column 4. Include any minus sign shown in column 3.

On line 21, describe what you misreported on Form CT-1. Tell us which current year adjustments have changed, that is, fractions of cents; uncollected Tier I Employee tax, Tier I Employee Medicare tax, or Tier II Employee tax on tips; or credits for overpayments of penalty or interest paid on tax for earlier years.

Only use line 16 to correct adjustments for fractions of cents; uncollected Tier I Employee tax, Tier I Employee Medicare tax, and Tier II Employee tax on tips; or credits for overpayments of penalty or interest previously reported. File a separate Form CT-1 X for each year being corrected.

17a and 17b. Credit for Exempt Taxes Paid First Quarter of 2010

Complete lines 17a and 17b to adjust the tax credit for Tier I Employer tax on compensation paid to qualified employees from March 19, 2010, through March 31, 2010.

17a. Number of qualified employees paid exempt compensation (including sick pay) March 19–31, 2010.   Enter the total corrected number from your previously filed 2010 Form CT-1, line 15a, in column 1. In column 2, enter the amount you originally reported in the previously filed 2010 Form CT-1 or as previously corrected. In column 3, enter the difference between columns 1 and 2. See Correcting Tier I Employer RRTA Tax Exemption, earlier, for the definition of qualified employee.

  Be sure to explain the reasons for this correction on line 21.

17b. Exempt compensation (other than tips) paid to qualified employees March 19–31, 2010.   Enter the total corrected amount from your previously filed 2010 Form CT-1, line 15b, in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2. See Correcting Tier I Employer RRTA Tax Exemption, earlier, for the definition of exempt compensation.

  Multiply the amount in column 3 by .062 (6.2% tax rate) and enter that result in column 4.

  Be sure to explain the reasons for this correction on line 21.

  
Lines 17a and 17b apply only to corrections to the 2010 Form CT-1.

18. Total

Combine the amounts on lines 6a–17b of column 4. Enter the result on line 18.

Example.

You entered “-500.00” in column 4 of line 6a, “-100.00” in column 4 of line 7, and “1,400.00” in column 4 of line 16. Combine these amounts and enter “800.00” in column 4 of line 18.

Line 6a -500.00  
Line 7 -100.00  
Line 16  +1,400.00  
Line 18 800.00  

Your credit.   If the amount entered on line 18 is less than zero, for example, “-115.00,” you have a credit because you overreported your RRTA taxes.
  • If you checked the box on line 1, include this amount on Form CT-1, line 14 (“Total railroad retirement tax deposits”) for the year during which you filed Form CT-1 X. Do not make any changes to your Record of Railroad Retirement Tax Liability in Part II of Form CT-1 or on Form 945-A. The amounts reported on the record should reflect your actual tax liability for the period.

  • If you checked the box on line 2, you are filing a claim for refund or abatement of the amount shown.

  If your credit is less than $1, we will send a refund or apply it to your next return only if you ask us in writing to do so.

Amount you owe.   If the amount entered on line 18 is a positive number, you must pay the amount you owe by the time you file Form CT-1 X. You may not use any credit that you show on another Form CT-1 X to pay the amount you owe, even if you filed for the amount you owe and the credit at the same time.

  If you owe tax and are filing a timely Form CT-1 X, do not file an amended Form 945-A unless you were assessed a failure-to-deposit (FTD) penalty caused by an incorrect, incomplete, or missing Form 945-A. Do not include the tax increase reported on Form CT-1 X on any amended Form 945-A you file.

  If you owe tax and are filing a late Form CT-1 X, that is, after the due date for Form CT-1 for the period in which you discovered the error, you must file an amended Form 945-A with the Form CT-1 X. Otherwise, the IRS may assess an “averaged” FTD penalty. The total tax reported on Form 945-A, line M, must match the corrected tax (Form CT-1, line 13, combined with any correction reported on Form CT-1 X, line 18) for the year, less any previous abatements and interest-free tax assessments.

Payment methods.

You may pay the amount you owe on line 18 electronically using the Electronic Federal Tax Payment System (EFTPS) or by a check or money order.

  • The preferred method of payment is EFTPS. For more information, visit www.eftps.gov, call EFTPS Customer Service at 1-800-555-4477 toll free, or see Pub. 966, Electronic Federal Tax Payment System: A Guide To Getting Started.

  • If you pay by check or money order, make it payable to “United States Treasury.” On your check or money order, be sure to write your EIN, “Form CT-1 X,” and the year corrected.

  You do not have to pay if the amount you owe is less than $1.

Previously assessed FTD penalty.

If line 18 reflects overreported tax and the IRS previously assessed an FTD penalty, you may be able to reduce the penalty. For more information, see the Form 945-A instructions.

Part 4: Explain Your Corrections for This Year

19. Correction of Both Underreported and Overreported Amounts

Check the box on line 19 if any corrections you entered on lines 6a–17b in column 3 reflect both underreported and overreported amounts.

Example.

If you had an increase to Tier I Employer compensation of $15,000 for employee A and a decrease to Tier I Employer compensation of $5,000 for employee B, you would enter $10,000 on line 6a, column 3. That $10,000 represents the net change resulting from corrections.

On line 21, you must explain the reason for both the $15,000 increase and the $5,000 decrease.

20. Did You Reclassify Any Workers?

Check the box on line 20 if you reclassified any workers to be independent contractors or nonemployees. Also check this box if the IRS (or you) determined that workers you treated as independent contractors or nonemployees should be classified as employees. On line 21, provide a detailed reason why any worker was reclassified.

Return not filed because you did not treat any workers as employees.   If you did not previously file Form CT-1 because you mistakenly treated all workers as independent contractors or as nonemployees, file a Form CT-1 for each delinquent year.

  Write “Misclassified Employees” in dark, bold letters across the top margin of page 1 of each Form CT-1. Complete Form CT-1 using the Instructions for Form CT-1. Attach a Form CT-1 X to each Form CT-1. Complete the top of Form CT-1 X, including the date you discovered the error, and provide a detailed explanation on line 21.

21. Explain Your Corrections

Treasury regulations require you to explain in detail the grounds and facts relied upon to support each correction. On line 21, describe in detail each correction you entered in column 4 on lines 6a–17b. If you need more space, attach additional sheets, but be sure to write your name, EIN, and calendar year on the top of each sheet.

You must describe the events that caused the underreported or overreported amounts. Explanations such as “RRTA compensation was overstated” or “administrative/payroll errors were discovered” are insufficient and may delay the processing of your Form CT-1 X because the IRS may need to ask for a more complete explanation.

Provide the following information in your explanation of each correction.

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

  • Date you discovered the error.

  • Difference (amount of the error).

  • Cause of the error.

You may report the information in paragraph form. The following paragraph is an example.

The $1,000 difference shown in column 3 of lines 6a and 7 was discovered on May 14, 2012, during an internal payroll audit. We discovered that we included $1,000 of compensation for one of our employees twice. This correction removes the reported compensation that was never paid.

Part 5: Sign Here

You must complete all three pages of Form CT-1 X and sign it on page 3. If you do not sign, the processing of Form CT-1 X will be delayed.

Who must sign the Form CT-1 X?   Form CT-1 X must be signed by one of the following:
  • Sole proprietorship—The individual who owns the business.

  • Corporation (including a limited liability company (LLC) treated as a corporation)—The president, vice president, or other principal officer duly authorized to sign.

  • Partnership (including an LLC treated as a partnership) or unincorporated organization—A responsible and duly authorized partner, member, or officer having knowledge of its affairs.

  • Single member LLC treated as a disregarded entity for federal income tax purposes—The owner of the LLC or a principal officer duly authorized to sign.

  • Trust or estate—The fiduciary.

  A duly authorized agent of the taxpayer also may sign Form CT-1 X if a valid power of attorney has been filed.

Alternative signature method.   Corporate officers or duly authorized agents may sign Form CT-1 X by rubber stamp, mechanical device, or computer software program. For details and required documentation, see Rev. Proc. 2005-39, 2005-28 I.R.B. 82, available at www.irs.gov/pub/irs-irbs/irb05-28.pdf.

Paid Preparer Use Only

A paid preparer must sign Form CT-1 X and provide the information in the Paid Preparer Use Only section of Part 5 if the preparer was paid to prepare Form CT-1 X and is not an employee of the filing entity. Paid preparers must sign paper returns with a manual signature. The preparer must give the employer the return to file with the IRS and include a copy of the return for the employer's records.

If you are a paid preparer, write your Preparer Tax Identification Number (PTIN) in the space provided. Include your complete address. If you work for a firm, write the firm's name and the EIN of the firm. You can apply for a PTIN online or by filing Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal. For more information about applying for a PTIN online, visit the IRS website at www.irs.gov/ptin. You cannot use your PTIN in place of the EIN of the tax preparation firm.

Generally, you are not required to complete this section if you are filing the return as a reporting agent and have a valid Form 8655, Reporting Agent Authorization, on file with the IRS. However, a reporting agent must complete this section if the reporting agent offered legal advice, for example, advising the client on determining whether its workers are employees or independent contractors for federal tax purposes.

How Can You Order Forms and Publications from the IRS?

Visit the IRS website at www.irs.gov/formspubs.

Call the IRS at 1-800-TAX-FORM (1-800-829-3676).

Additional Information

You may find the following forms, instructions, and publications helpful when using Form CT-1 X.

  • Form W-2, Wage and Tax Statement

  • Form W-3, Transmittal of Wage and Tax Statements

  • General Instructions for Forms W-2 and W-3

  • Form W-2c, Corrected Wage and Tax Statement

  • Form W-3c, Transmittal of Corrected Wage and Tax Statements

  • Form 945-A, Annual Record of Federal Tax Liability

  • Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit

  • Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal

  • Instructions for Form CT-1

  • Instructions for Form 843

  • Pub. 15 (Circular E), Employer's Tax Guide

  • Pub. 966, Electronic Federal Tax Payment System: A Guide To Getting Started


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