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 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.

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.

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).

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.

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.

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.

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.

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

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:

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.

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

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.

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.

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

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.

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.

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.

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

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

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.

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

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

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.

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.

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

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.

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

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

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.

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

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

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.

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

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

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.

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.

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.

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

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

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.

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.

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.”

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.