Employer's Annual Railroad Retirement Tax Return

2020

Instructions for Form CT-1

Department of the Treasury
Internal Revenue Service

Employer's Annual Railroad Retirement Tax Return
Section references are to the Internal Revenue Code unless
otherwise noted.

Future Developments

For the latest information about developments related to
Form CT-1 and its instructions, such as legislation enacted
after they were published, go to IRS.gov/CT1.

What's New
Changes to tax rates and compensation bases. For the
2020 tax rates and compensation bases, see Employer and
Employee Taxes, later.
Changes to Form CT-1 for coronavirus (COVID-19) related employment tax credits and other tax relief. The
following significant changes have been made to Form CT-1
to allow for the reporting of new employment tax credits and
other tax relief related to COVID-19.
• The new credit for qualified sick and family leave
compensation is reported on line 16 and, if applicable,
line 23. Qualified sick and family leave compensation isn't
treated as compensation for the Tier 1 Employer tax (line 1).
The qualified compensation is subject to the Tier 1 Employer
Medicare tax (line 2), Tier 1 Employee tax (line 4), Tier 1
Employee Medicare tax (line 5), and Tier 1 Employee
Additional Medicare Tax (line 6). Qualified sick and family
leave compensation is subject to Tier 2 tax for both the
employer and employee (lines 3 and 7). Qualified sick leave
compensation and qualified family leave compensation are
reported on lines 30 and 32, respectively. Qualified health
plan expenses allocable to sick and family leave
compensation are reported on lines 31 and 33, respectively.
See the instructions for line 16 for information about the new
credit for qualified sick and family leave compensation.
• The new employee retention credit is reported on line 17
and, if applicable, line 24. Qualified compensation (excluding
qualified health plan expenses) for the employee retention
credit is reported on line 34. Qualified health plan expenses
allocable to the qualified compensation for the employee
retention credit are reported on line 35. Qualified
compensation for the employee retention credit is subject to
Tier 1 and Tier 2 taxes reported on lines 1 through 7. See the
instructions for line 17 for information about the new
employee retention credit.
• Employers, including government employers, can defer
the deposit of the Tier 1 employer taxes reported on lines 1
and 8 that are due on or after March 27, 2020, and before
January 1, 2021, as well as payment due for these taxes on
compensation paid on or after March 27, 2020, and before
January 1, 2021. The amount of deferral is reported on
line 21. See the instructions for line 21 for more information.
• Employers could defer the withholding and payment of the
Tier 1 employee taxes reported on lines 4 and 10 on
compensation paid on or after September 1, 2020, and
before January 1, 2021, but only if the amount of
compensation for a biweekly pay period was less than
$4,000 (or an equivalent amount for other pay periods). The

Feb 02, 2021

amount of deferral is reported on line 22. See the instructions
for line 22 for more information.
• Employers that requested an advance of the sick and
family leave credit and/or the employee retention credit
would have filed a Form 7200, Advance Payment of
Employer Credits Due to COVID-19. The amount of all
advances received from Forms 7200 filed for the year is
reported on line 26. See the instructions for line 26 for more
information.
• The credit for qualified sick and family leave compensation
(reported on lines 16 and 23) and the employee retention
credit (reported on lines 17 and 24) are figured on Worksheet
1.
Notice 2021-11 modifies Notice 2020-65. Notice 2020-65,
2020-38 I.R.B. 567, available at IRS.gov/irb/
2020-38_IRB#NOT-2020-65, is referenced throughout these
instructions. In response to section 274 of the COVID-related
Tax Relief Act of 2020, Notice 2020-65 was modified by
Notice 2021-11. Notice 2021-11 is expected to be published
in Internal Revenue Bulletin 2021-06.

Reminders
Outsourcing payroll duties. Generally, as an employer,
you’re responsible to ensure that tax returns are filed and
deposits and payments are made, even if you contract with a
third party to perform these acts. You remain responsible if
the third party fails to perform any required action. Before you
choose to outsource any of your payroll and related tax
duties (that is, withholding, reporting, and paying over
income taxes and taxes imposed by the Railroad Retirement
Tax Act) to a third-party payer, such as a payroll service
provider or reporting agent, go to IRS.gov/
OutsourcingPayrollDuties for helpful information on this topic.
For more information on the different types of third-party
payer arrangements, see section 16 of Pub. 15.
Correcting a previously filed Form CT-1. If you discover
an error on a previously filed Form CT-1, make the correction
using Form CT-1 X. Form CT-1 X is filed separately from
Form CT-1. For more information, see the Instructions for
Form CT-1 X or go to IRS.gov/CorrectingEmploymentTaxes.
Change of address. Use Form 8822-B to notify the IRS of
an address change.
Federal tax deposits must be made by electronic funds
transfer (EFT). You must use EFT to make all federal tax
deposits. Generally, an EFT is made using the Electronic
Federal Tax Payment System (EFTPS). If you don't want to
use EFTPS, you can arrange for your tax professional,
financial institution, payroll service, or other trusted third party
to make electronic deposits on your behalf. Also, you may
arrange for your financial institution to initiate a same-day
wire payment on your behalf. EFTPS is a free service
provided by the Department of the Treasury. Services
provided by your tax professional, financial institution, payroll
service, or other third party may have a fee.

Cat. No. 16005H

the credit for qualified sick and family leave compensation
and/or the employee retention credit. For more information
about qualified sick and family leave compensation, see the
line 1 instructions, later. For more information about these
credits, see the line 16 and line 17 instructions, later.
Because these credits are reported when the 2020 Form
CT-1 is filed in 2021, a reduction in deposits of income tax
withholding as described above may have resulted in the
issuance of a balance due notice and the imposition of
penalties and interest when the Form 941 quarterly return
was processed.

To get more information about EFTPS or to enroll in
EFTPS, go to EFTPS.gov, or call 800-555-4477 or
800-733-4829 (TDD). Additional information about EFTPS is
also available in Pub. 966.
Paid preparers. If you use a paid preparer to complete
Form CT-1, the paid preparer must complete and sign the
paid preparer's section of Form CT-1.
Additional information. For more information, see one of
the resources discussed next.
• Pub. 15 contains information for withholding, depositing,
reporting, and paying over employment taxes.
• Pub. 15-A contains specialized and detailed employment
tax information supplementing the basic information provided
in Pub. 15.
• Pub. 15-B contains information about the employment tax
treatment of various types of noncash compensation.
• Pub. 915 contains the federal income tax rules for social
security benefits and equivalent Tier 1 railroad retirement
benefits.
• The Railroad Retirement Board (RRB) website at RRB.gov
contains additional employer reporting information and
instructions.

If you reduced your deposits of employment taxes
reported on Form 941 in anticipation of the credit for qualified
sick and family leave compensation and/or the employee
retention credit for quarters in 2020, and this resulted in those
amounts being included as a balance due in a notice, contact
us as soon as possible by either (1) writing to the address
shown on your notice, or (2) calling the telephone number
shown on your notice. If you contact us in writing, include a
copy of your notice and the amount of employment tax
deposits reported on Form 941 that you reduced in
anticipation of the credit for qualified sick and family leave
compensation and/or the employee retention credit .
Whether you owe tax, penalties, and interest will depend
upon the credits properly claimed on Form CT-1.

How to get forms and publications. You can download or
print some of the forms and publications you may need at
IRS.gov/Forms. Otherwise, you can go to IRS.gov/
OrderForms to place an order and have forms mailed to you.
The IRS will process your order as soon as possible. Don't
resubmit requests you've already sent us. You can get forms
and publications faster online.

Who Must File
For purposes of these instructions, all references to

TIP "sick pay" mean ordinary sick pay, not “qualified sick
leave compensation.”

Where can you get telephone help? You can call the IRS
Business and Specialty Tax Line at 800-829-4933 or
800-829-4059 (TDD/TTY for persons who are deaf, hard of
hearing, or have a speech disability) Monday–Friday from
7:00 a.m. to 7:00 p.m. local time (Alaska and Hawaii follow
Pacific time) for answers to your questions about completing
Form CT-1 or tax deposit rules.

File Form CT-1 if you paid one or more employees
compensation subject to tax under RRTA.
A payer of sick pay (including a third party) must file Form
CT-1 if the sick pay is subject to Tier 1 railroad retirement
taxes. Include sick pay payments on lines 8–11 and, if the
withholding threshold is met, line 12 of Form CT-1. Follow the
reporting procedures for sick pay reporting in section 6 of
Pub. 15-A.

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The IRS is a proud partner with the National Center for
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recognize a child.

If a third-party payer of sick pay is also paying qualified
sick leave compensation on behalf of an employer, the third
party would be making the payments as an agent of the
employer. The employer is required to do the reporting and
payment of railroad retirement taxes with respect to the
qualified sick leave compensation and claim the credit for the
qualified sick leave compensation unless the employer has
an agency agreement with the third-party payer that requires
the third-party payer to do the collecting, reporting, and/or
paying or depositing railroad retirement taxes on the qualified
sick leave compensation. If the employer has an agency
agreement with the third-party payer, the third-party payer
includes the qualified sick leave compensation on the Form
CT-1 filed by the third party and claims the sick leave credit
on behalf of the employer on Form CT-1.

General Instructions
Purpose of Form CT-1

These instructions give you some background information
about Form CT-1. They tell you who must file Form CT-1,
how to complete it line by line, and when and where to file it.
Use Form CT-1 to report taxes imposed by the Railroad
Retirement Tax Act (RRTA). Use Form 941, Employer's
QUARTERLY Federal Tax Return, or, if applicable, Form
944, Employer's ANNUAL Federal Tax Return, to report
federal income taxes withheld from your employees' wages
and other compensation.

After you file your first Form CT-1, you must file a return for
each year, even if you didn’t pay taxable compensation
during the year, until you file a final return.
Disregarded entities and qualified subchapter S subsidiaries (QSubs). Eligible single-owner disregarded entities
and QSubs are treated as separate entities for employment
tax purposes. Eligible single-member entities that haven’t
elected to be taxed as corporations must report and pay
employment taxes on compensation paid to their employees
using the entities' own names and employer identification

In accordance with Notice 2020-22, 2020-17 I.R.B. 664,
available at IRS.gov/irb/2020-17_IRB#NOT-2020-22, you
may have reduced deposits of employment taxes otherwise
required to be made that are reported on Form 941
(generally, income tax withholding) in anticipation of claiming
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Instructions for Form CT-1 (2020)

1. Certain employee achievement awards under section
74(c),
2. Certain scholarship and fellowship grants under
section 117,
3. Certain fringe benefits under section 132, and
4. Employer payments to an Archer MSA under section
220 or health savings accounts (HSAs) under section 223.
• Stock or stock options.
• Payments made specifically for traveling or other bona fide
and necessary expenses that meet the rules in the
regulations under section 62.
• Payments for services performed by a nonresident alien
temporarily present in the United States as a nonimmigrant
under subparagraphs (F), (J), (M), or (Q) of the Immigration
and Nationality Act.
• Compensation under $25 earned in any month by an
employee in the service of a local lodge or division of a
railway-labor-organization employer.
Exceptions for sickness or accident disability
payments. For purposes of employee and employer Tier 1
taxes, compensation doesn't include sickness or accident
disability payments made to or on behalf of an employee or
dependents:
• Under a workers' compensation law,
• Under section 2(a) of the Railroad Unemployment
Insurance Act for days of sickness due to an on-the-job
injury,
• Under the Railroad Retirement Act, or
• More than 6 months after the calendar month the
employee last worked.
For purposes of Tier 2 taxes, compensation doesn't
include payments made to or on behalf of an employee or
dependents under a sickness or accident disability plan or a
medical or hospitalization plan in connection with sickness or
accident disability.

numbers (EINs). See Regulations sections 1.1361-4(a)(7)
and 301.7701-2(c)(2)(iv).

Where To File
Send Form CT-1 to:

Department of the Treasury
Internal Revenue Service Center
Kansas City, MO 64999-0048

When To File

File Form CT-1 by March 1, 2021.

Definitions

The terms “employer” and “employee” used in these
instructions are defined in section 3231 and in its regulations.

Compensation

Compensation means payment in money, meaning currency
issued by a recognized authority as a medium of exchange,
for services performed as an employee of one or more
employers. It includes payment for time lost as an employee.
A few exceptions are described later under Exceptions.

Group-term life insurance. Include in compensation the
cost of group-term life insurance over $50,000 you provide to
an employee. This amount is subject to Tier 1 and Tier 2
taxes, but not to federal income tax withholding. Include this
amount on your employee's Form W-2, Wage and Tax
Statement.
Former employees for whom you paid the cost of
group-term life insurance over $50,000 must pay the
employee's share of these taxes with their Form 1040, U.S.
Individual Income Tax Return, or Form 1040-SR, U.S. Tax
Return for Seniors. You’re not required to collect those taxes.
For former employees, you must include on Form W-2 the
part of compensation that consists of the cost of group-term
life insurance over $50,000. You must also separately report
on Form W-2 the amount of railroad retirement taxes owed
by the former employee for coverage provided after
separation from service. For more information, see section 2
of Pub. 15-B and the General Instructions for Forms W-2 and
W-3.

Employer and Employee Taxes
Tax Rates and Compensation Bases
Tax Rates
Tier 1

Timing. Compensation is considered paid when it is actually
paid or when it is constructively paid. It is constructively paid
when it is set apart for the employee, or credited to an
account the employee can control, without any substantial
limit or condition on how and when the payment is to be
made.
Any compensation paid during the current year that was
earned in a prior year is taxable at the current year's tax
rates; you must include the compensation with the current
year's compensation on Form CT-1, lines 1–12, as
appropriate. An exception applies to nonqualified deferred
compensation that was subject to Tier 1 and Tier 2 tax in a
prior year. See the rules for nonqualified deferred
compensation plans in section 5 of Pub. 15-A.

Employer and Employee: Each pay 6.2%
of first . . . . . . . . . . . . . . . . . . . . . . . . . . .

$137,700

Tier 1 Medicare
Employer and Employee: Each pay 1.45% of

. .

All

Tier 1 Employee Additional Medicare Tax
withholding
Employee: Pays 0.9% on
compensation exceeding . . . . . . . . . . . . .

$200,000

Tier 2

Exceptions. Compensation doesn't include the following.
• Certain benefits provided to or on behalf of an employee if
at the time the benefits are provided it is reasonable to
believe the employee can exclude such benefits from
income. For information on what benefits are excludable, see
Pub. 15-B. Examples of this type of benefit include:

Instructions for Form CT-1 (2020)

Compensation
Paid in 2020

Employer: Pays 13.1% of first . . . . . . . . . . . .

$102,300

Employee: Pays 4.9% of first

$102,300

Employer Taxes

. . . . . . . . . . . .

Employers must pay both Tier 1 and Tier 2 taxes, except for
the Tier 1 Employer tax (line 1) on qualified sick and family
leave compensation and the Tier 1 Employee Additional
Medicare Tax. Tier 1 tax is divided into two parts. The
amount of compensation subject to each tax is different. See

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funds first to the railroad retirement tax and then to federal
income tax. You don't have to pay employer railroad
retirement taxes on tips.
If, by the 10th of the month after the month you received
an employee's tip income report, you don't have enough
employee funds available to withhold the employee tax, you
may report the excess amount without withholding the
related tax. Include the tips your employees report to you on
lines 4, 5, 6, and 7, even if you were unable to withhold the
employee's share of tax. Then report the uncollected Tier 1
Employee tax, Tier 1 Employee Medicare tax, Tier 1
Employee Additional Medicare Tax withholding, and Tier 2
Employee tax on tips on line 14. See section 6 of Pub. 15.

the table above for the 2020 tax rates and compensation
bases.
Concurrent employment. If two or more related
corporations that are rail employers employ the same
individual at the same time and pay that individual through a
common paymaster that is one of the corporations, the
corporations are considered a single employer. They have to
pay, in total, no more in railroad retirement taxes than a
single employer would. See Regulations section
31.3121(s)-1 for more information.
Successor employers. Successor employers should see
section 3231(e)(2)(C) and Pub. 15 to see if they can use the
predecessor's compensation paid against the maximum
compensation bases.

Depositing Taxes

For Tier 1 and Tier 2 taxes, you’re either a monthly schedule
depositor or a semiweekly schedule depositor. However, see
the $2,500 Rule and the $100,000 Next-Day Deposit Rule
under Exceptions to the Deposit Rules, later. The terms
“monthly schedule depositor” and “semiweekly schedule
depositor” identify which set of rules you must follow when a
tax liability arises (for example, when you have a payday).
They don't refer to how often your business pays its
employees or to how often you’re required to make deposits.

Employee Taxes

You must withhold the employee's part of Tier 1 and Tier 2
taxes. See the table under Employer and Employee Taxes,
earlier, for the tax rates and compensation bases. See Tips,
later, for information on the employee tax on tips.
Withholding or payment of employee tax by employer.
You must collect the employee railroad retirement tax from
each employee by withholding it from employee
compensation. If you don't withhold the employee tax, you
must still pay the tax. If you withhold too much or too little tax
because you can't determine the correct amount, correct the
amount withheld by an adjustment, credit, or refund
according to the applicable regulations.
If you pay the railroad retirement tax for your employee
rather than withholding it, the amount of the employee's
compensation is increased by the amount of that tax. See
Rev. Proc. 83-43,1983-1 C.B. 778, for information on how to
figure and report the proper amounts.

If you were a monthly schedule depositor for the entire
year, complete the Monthly Summary of Railroad Retirement
Tax Liability in Part II of Form CT-1. If you were a semiweekly
schedule depositor during any part of the year or you
accumulated $100,000 or more on any day during a deposit
period, you must complete Form 945-A, Annual Record of
Federal Tax Liability.

Lookback Period

Before each year begins, you must determine the deposit
schedule to follow for depositing Tier 1 and Tier 2 taxes for a
calendar year. This is determined from the total taxes
reported on your Form CT-1 for the calendar year lookback
period. The lookback period is the second calendar year
preceding the current calendar year. For example, the
lookback period for calendar year 2021 is calendar year
2019.

Tips. Your employee must report cash tips to you by the
10th day of the month following the month the tips are
received. The report should include charged tips you paid
over to the employee for charge customers, tips the
employee received directly from customers, and tips
received from other employees under any tip-sharing
arrangement. Both directly and indirectly tipped employees
must report tips to you. Cash tips must be reported for every
month, unless the cash tips for the month are less than $20.
Stop collecting the Tier 1 Employee tax when his or her
compensation and tips for tax year 2020 reach $137,700.
Collect the Tier 1 Employee Medicare tax for the whole year
on all compensation and tips. Collect the Tier 1 Employee
Additional Medicare Tax withholding on compensation and
tips that exceed $200,000 for the calendar year.
An employee must furnish you with a written (or electronic)
statement of cash tips, signed by the employee, showing (a)
his or her name, address, and social security number; (b)
your name and address; (c) the month or period for which the
statement is furnished; and (d) the total amount of cash tips.
Pub. 1244, Employee's Daily Record of Tips and Report to
Employer, a booklet for daily entry of tips and forms to report
tips to employers, is available at IRS.gov/Forms.
Tips are considered to be paid at the time the employee
reports them to you. You must collect both employee railroad
retirement tax and federal income tax on cash tips reported
to you from the employee's compensation (after withholding
employee railroad retirement and federal income tax related
to the nontip compensation) or from other funds the
employee makes available. Apply the compensation or other

Use the table below to determine which deposit schedule
to follow for 2021.
IF you reported taxes
(Form CT-1, line 15) for the
lookback period (2019) of...

THEN for 2021 you’re a...

$50,000 or less

Monthly schedule depositor

More than $50,000

Semiweekly schedule depositor

Example. Rose Co. reported Form CT-1 taxes as follows.

• 2019 Form CT-1, line 15—$49,000.
• 2020 Form CT-1, line 19—$52,000.

Rose Co. is a monthly schedule depositor for 2021
because its Form CT-1 taxes for its lookback period
(calendar year 2019) weren't more than $50,000. However,
for 2022, Rose Co. is a semiweekly schedule depositor
because the total taxes exceeded $50,000 for its lookback
period (calendar year 2020).
New employer. If you’re a new employer, your taxes for
both years of the lookback period are considered to be zero.
Therefore, you’re a monthly schedule depositor for the first
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Instructions for Form CT-1 (2020)

and second years of your business. However, see $100,000
Next-Day Deposit Rule, later.

Deposits Due on Business Days Only
If a deposit is required to be made on a day that isn't a
business day, the deposit is considered to have been made
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
legal holiday. For example, if a deposit is due on a Friday and
Friday is a legal holiday, the deposit will be considered timely
if it is made by the following Monday (if that Monday is a
business day). The term “legal holiday” for deposit purposes
includes only those legal holidays in the District of Columbia.
For a list of legal holidays, see section 11 of Pub. 15.

Adjustments and the lookback rule. To determine the
amount of taxes paid for the lookback period, use only the
Form CT-1 taxes reported on your original return.
Adjustments to a return for a prior period aren't taken into
account in determining the taxes for that prior period.
Example. Maple Co. originally reported Form CT-1 taxes
of $45,000 for the lookback period (2019). Maple Co.
discovered in March 2021 that the tax during the lookback
period (2019) was understated by $10,000 and will correct
this error with an adjustment on Form CT-1 X filed for 2019.
Maple Co. is a monthly schedule depositor for 2021
because the lookback period Form CT-1 taxes are based on
the amount originally reported ($45,000), which wasn't more
than $50,000. For purposes of the lookback rule, the $10,000
adjustment doesn't affect either 2019 taxes or 2021 taxes.
See Treasury Decision 9405, available at IRS.gov/irb/
2008-32_IRB#TD-9405.

Semiweekly schedule depositors will always have at least
3 business days following the close of the semiweekly period
to make a deposit. If any of the 3 weekdays after the end of a
semiweekly period is a legal holiday, you have 1 additional
day to deposit. For example, if you have Form CT-1 taxes
accumulated for payments made on Friday and the following
Monday is a legal holiday, the deposit normally due on
Wednesday may be made on Thursday (allowing 3 business
days to make the deposit).

When To Deposit
Monthly Schedule Depositor

Exceptions to the Deposit Rules

If you’re a monthly schedule depositor, deposit employer and
employee Tier 1 and Tier 2 taxes accumulated during a
calendar month by the 15th day of the following month.
Example. Spruce Co. is a monthly schedule depositor
with seasonal employees. Spruce Co. paid compensation
each Friday during May but didn't pay any compensation
during June. Under the monthly schedule deposit rule,
Spruce Co. must deposit the combined taxes for the May
paydays by June 15. Spruce Co. doesn't have a deposit
requirement for June (due by July 15) because no
compensation was paid and, therefore, Spruce Co. doesn't
have a tax liability for the month.

The two exceptions that apply to the deposit rules are the:
• $2,500 Rule, and
• $100,000 Next-Day Deposit Rule.
$2,500 Rule. If your total Form CT-1 taxes after adjustments
and nonrefundable credits (line 19) for the year are less than
$2,500 and the taxes are fully paid with a timely filed Form
CT-1, no deposits are required. However, if you’re unsure
that you will accumulate less than $2,500, deposit under the
appropriate deposit rules so that you won't be subject to
deposit penalties.
$100,000 Next-Day Deposit Rule. If you accumulate
undeposited taxes of $100,000 or more on any day during a
deposit period, you must deposit the taxes by the next
business day regardless of whether you’re a monthly or
semiweekly schedule depositor. The $100,000 tax liability
threshold requiring a next-day deposit is determined before
you consider any reduction of your liability for nonrefundable
credits. See IRS.gov/ETD for more information.
If you’re a monthly schedule depositor and you
accumulate $100,000 or more on any day during the month,
you become a semiweekly schedule depositor on the next
day for the remainder of the calendar year and for the
following year.
Once a semiweekly schedule depositor accumulates
$100,000 or more in a deposit period, it must stop
accumulating at the end of that day and begin to accumulate
anew on the next day. The following examples explain this
rule.
Example of $100,000 Next-Day Deposit Rule.
Fir Co. is a semiweekly schedule depositor. On Monday, Fir
Co. accumulates taxes of $110,000 and must deposit this
amount by Tuesday, the next business day. On Tuesday, Fir
Co. accumulates additional taxes of $30,000. Because the
$30,000 isn't added to the previous $110,000, Fir Co. must
deposit the $30,000 by Friday using the semiweekly deposit
schedule.
Example of $100,000 Next-Day Deposit Rule during
the first year of business. Elm, Inc., started its business
on Monday, May 3, 2021. Because this was the first year of
its business, its Form CT-1 taxes for its lookback period
(2019) are considered to be zero, and Elm, Inc., is a monthly

Semiweekly Schedule Depositor
If you’re a semiweekly schedule depositor, use the table
below to determine when to make deposits.
Deposit Tier 1 and Tier 2 taxes No later than...
for payments made on...
Wednesday, Thursday, and/or
Friday

The following Wednesday

Saturday, Sunday, Monday,
and/or Tuesday

The following Friday

Example. Green, Inc., a semiweekly schedule depositor,
pays compensation on the last Friday of each month.
Although Green, Inc., is a semiweekly schedule depositor,
Green, Inc., will deposit just once a month because Green,
Inc., pays compensation only once a month. The deposit,
however, will be made under the semiweekly deposit
schedule as follows: Green, Inc.’s taxes for the April 30, 2021
(Friday), payday must be deposited by May 5, 2021
(Wednesday). Under the semiweekly deposit rule, taxes
arising on Wednesday through Friday must be deposited by
the following Wednesday.

!

The last day of the calendar year ends the
semiweekly deposit period and begins a new one.

CAUTION

Instructions for Form CT-1 (2020)

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schedule depositor. On Wednesday, May 5, it paid
compensation for the first time and accumulated taxes of
$40,000. On Friday, May 7, it paid compensation and
accumulated taxes of $60,000, bringing its total accumulated
(undeposited) taxes to $100,000. Because Elm, Inc.,
accumulated $100,000 or more on May 7 (Friday), Elm, Inc.,
must deposit the $100,000 by May 10 (Monday), the next
business day. Elm, Inc., became a semiweekly schedule
depositor on May 8. Elm, Inc., will be a semiweekly schedule
depositor for the rest of 2021 and for 2022.
Example of when $100,000 Next-Day Deposit Rule
doesn't apply. Oak Co., a semiweekly schedule depositor,
accumulated taxes of $95,000 on a Tuesday (of a
Saturday-through-Tuesday deposit period) and accumulated
$10,000 on Wednesday (of a Wednesday-through-Friday
deposit period). Because the $10,000 was accumulated in a
deposit period different from the one in which the $95,000
was accumulated, the $100,000 Next-Day Deposit Rule
doesn’t apply. Thus, Oak Co. must deposit $95,000 by Friday
and $10,000 by the following Wednesday.
Deferring your deposits. Employers can defer the
deposit of the Tier 1 employer taxes reported on lines 1 and 8
that are due on or after March 27, 2020, and before January
1, 2021, as well as payment due for these taxes for
compensation paid on or after March 27, 2020, and before
January 1, 2021. The deferral applies before any of the
nonrefundable credits claimed on line 16 or 17. However, the
deferral doesn't reduce the amount of the taxes that are used
to figure those nonrefundable credits. See the instructions for
line 21 for more information about the deferral of these
employer taxes. Employers could also defer the withholding
and payment of the Tier 1 employee taxes reported on lines 4
and 10 for compensation paid on or after September 1, 2020,
and on or before December 31, 2020, but only if the amount
of compensation for a biweekly pay period was less than
$4,000 (or an equivalent amount for other pay periods). The
amount of the employee deferral is reported on line 22. See
the instructions for line 22 for more information.
Reducing your deposits for COVID-19 credits.
Employers eligible to claim the credit for qualified sick and
family leave compensation and/or the employee retention
credit can reduce their deposits by the amount of their
anticipated credits. Employers won't be subject to a
failure-to-deposit (FTD) penalty for reducing their deposits if
certain conditions are met. See the instructions for line 16
and line 17 for more information on these credits. This
reduction in deposits is in addition to the ability employers
have to reduce their deposits by the amount of the Tier 1
employer taxes they defer. For more information on reducing
deposits, see Notice 2020-22, 2020-17 I.R.B. 664, available
at IRS.gov/irb/2020-17_IRB#NOT-2020-22, and IRS.gov/
ETD. Also see IRS.gov/ERC and IRS.gov/PLC for more
information, including examples, about reducing deposits.
See the instructions for Part II, later, for instructions on how to
adjust your tax liabilities reported on Part II or Form 945-A for
nonrefundable credits.

!

CAUTION

For an EFTPS deposit to be on time, you must
submit the deposit by 8 p.m. Eastern time the day
before the date the deposit is due.

Same-day wire payment option. If you fail to submit a
deposit transaction on EFTPS by 8 p.m. Eastern time the day
before the date a deposit is due, you can still make your
deposit on time by using the Federal Tax Collection Service
(FTCS) to make a same-day wire payment. To use the
same-day wire payment method, you will need to make
arrangements with your financial institution ahead of time.
Please check with your financial institution regarding
availability, deadlines, and costs. Your financial institution
may charge you a fee for payments made this way. To learn
more about the information you will need to give your
financial institution to make a same-day wire payment, go to
IRS.gov/SameDayWire.
Accuracy of Deposits Rule. You’re required to deposit
100% of your railroad retirement taxes on or before the
deposit due date. However, penalties won't be applied for
depositing less than 100% if both of the following conditions
are met.
1. Any deposit shortfall doesn't exceed the greater of
$100 or 2% of the amount of taxes otherwise required to be
deposited.
2. The deposit shortfall is paid or deposited by the
shortfall makeup date for each type of depositor as described
below.
• Monthly schedule depositor. Deposit the shortfall or pay
it with your return by the due date of Form CT-1. You may
pay the shortfall with Form CT-1 even if the amount is $2,500
or more.
• Semiweekly schedule depositor. Deposit the shortfall
by the earlier of the first Wednesday or Friday on or after the
15th of the month following the month in which the shortfall
occurred. For example, if a semiweekly schedule depositor
has a deposit shortfall during May 2021, the shortfall makeup
date is June 16, 2021 (Wednesday).

Penalties and Interest

The law provides penalties for failure to file a return, late filing
of a return, late payment of taxes, failure to make deposits,
and late deposits unless filing and/or paying late is due to
reasonable cause and not due to willful neglect. Interest is
charged on taxes paid late at the rate set by law. For more
information, see Pub. 15. Deposit or pay your taxes when
they are due, unless you meet the requirements discussed in
Notice 2020-22 or IRS.gov/ETD, or you have chosen to use
the relief provided in Notice 2020-65 and Notice 2021-11.
If you receive a notice about a penalty after you file this
return, reply to the notice with an explanation and we will
determine if you meet reasonable cause criteria. Don't attach
an explanation when you file your return.
Use Form 843 to request abatement of assessed
penalties or interest. Don't request abatement of assessed
penalties or interest on Form CT-1 or Form CT-1 X.

Electronic Deposit Requirement

You must use EFT to make all federal tax deposits.
Generally, an EFT is made using EFTPS. To get more
information about EFTPS or to enroll in EFTPS, go to
EFTPS.gov, or call 800-555-4477 or 800-733-4829 (TDD).
Additional information about EFTPS is also available in Pub.
966.

Order in which deposits are applied. Generally, tax
deposits are applied first to the most recent tax liability within
the specified tax period to which the deposit relates. If you
receive an FTD penalty notice, you may designate how your
payment is to be applied in order to minimize the amount of
the penalty. You must respond within 90 days of the date of
the notice. Follow the instructions on the notice you received.
See Rev. Proc. 2001-58 for more information. You can find
-6-

Instructions for Form CT-1 (2020)

eligible for the credit should not be reported as taxable
compensation on lines 2, 3, 4, 5, 6, and 7. See the Caution
above the line 2 instructions, later, for more information. See
the instructions for line 16 for information about the credit for
qualified sick and family leave compensation.
Emergency Paid Sick Leave Act (EPSLA). Under the
EPSLA, certain government employers and private
employers with fewer than 500 employees provide paid sick
leave to employees unable to work or telework. The EPLSA
required such employers to provide leave to such employees
after March 31, 2020, and before January 1, 2021. The
COVID-related Tax Relief Act of 2020 extended the periods
of leave for which employers may continue to claim tax
credits for providing such leave starting from January 1, 2021
through March 31, 2021, although the requirement that
employers provide the leave still expired on December 31,
2020. Employers provide leave under the EPSLA to
employees unable to work or telework because the
employee:
1. Is subject to a federal, state, or local quarantine or
isolation order related to COVID-19;
2. Has been advised by a health care provider to
self-quarantine due to concerns related to COVID-19;
3. Is experiencing symptoms of COVID-19 and seeking a
medical diagnosis;
4. Is caring for an individual subject to an order described
in (1) or who has been advised as described in (2);
5. Is caring for a child if the school or place of care has
been closed, or the childcare provider is unavailable, due to
COVID-19 precautions; or
6. Is experiencing any other substantially similar
condition specified by the U.S. Department of Health and
Human Services.

Rev. Proc. 2001-58 on page 579 of Internal Revenue Bulletin
2001-50 at IRS.gov/pub/irs-irbs/irb01-50.pdf.
Trust fund recovery penalty. If taxes that must be withheld
(that is, trust fund taxes) aren't withheld or aren't deposited or
paid to the United States Treasury, the trust fund recovery
penalty may apply. The penalty is 100% of the unpaid trust
fund tax. If these unpaid taxes can't be immediately collected
from the employer or business, the trust fund recovery
penalty may be imposed on all persons who are determined
by the IRS to be responsible for collecting, accounting for, or
paying over these taxes, and who acted willfully in not doing
so. For more information, see Trust Fund Recovery Penalty
in section 11 of Pub. 15. The trust fund recovery penalty
won't apply to any amount of trust fund taxes an employer
holds back in anticipation of any credits they are entitled to. It
also won't apply to applicable taxes properly deferred under
Notice 2020-65 and Notice 2021-11 before January 1, 2022.

Specific Instructions
Final Return

If you stop paying taxable compensation and won't have to
file Form CT-1 in the future, you must file a final return and
check the final return box at the top of Form CT-1 under
“2020.” The final return should be accompanied by a
statement providing the last date on which you paid
compensation that you reported on Form CT-1, the address
at which the records for your Forms CT-1 will be kept, and
the name of the person keeping the records. If the business
has been transferred to another person, the statement should
include the name and address of the transferee and the date
of the transfer. If the business wasn't transferred or the
transferee isn't known, the statement should so state.

!

CAUTION

Processing of your return may be delayed if you don't
provide the required amounts in the Compensation
and Tax columns.

Government employers aren't eligible for the credit

TIP for qualified sick and family leave compensation;

however, government employers still aren't liable for
the Tier 1 Employer tax (line 1) on the qualified sick leave
compensation paid to employees.

Line 1—Tier 1 Employer Tax

!

CAUTION

Don't reduce your Tier 1 Employer compensation or
tax by the deferred amount of the Tier 1 Employer tax
reported on line 21.

Limits on qualified sick leave compensation. The
EPSLA provides different limitations for different
circumstances under which qualified sick leave
compensation is paid. For paid sick leave qualifying under
(1), (2), or (3) above, the amount of qualified sick leave
compensation is determined at the employee's regular rate of
pay, but the compensation may not exceed $511 for any day
(or portion of a day) for which the individual is paid sick leave.
For paid sick leave qualifying under (4), (5), or (6) above, the
amount of qualified sick leave compensation is determined at
two-thirds the employee's regular rate of pay, but the
compensation may not exceed $200 for any day (or portion
of a day) for which the individual is paid sick leave. The
EPSLA also limits each individual to a maximum of up to 80
hours of paid sick leave for the year. Therefore, the maximum
amount of paid sick leave compensation for the year can't
exceed $5,110 for an employee for leave under (1), (2), or
(3), and it can't exceed $2,000 for an employee for leave
under (4), (5), or (6). For more information from the
Department of Labor on these requirements and limits, see
DOL.gov/agencies/whd/pandemic.
For more information about qualified sick leave
compensation, go to IRS.gov/PLC.

Enter the compensation (other than tips and sick pay),
including qualified compensation (other than qualified health
plan expenses) for the employee retention credit, subject to
Tier 1 Employer tax in the Compensation column. Don't
include qualified sick leave compensation or qualified family
leave compensation. Multiply by 6.2% and enter the result in
the Tax column. The total amount listed in the Compensation
column for lines 1 and 8 combined may not be more than
$137,700 per employee. For more information on qualified
compensation for the employee retention credit, see the
instructions for line 17, later.

Qualified Sick Leave Compensation and
Qualified Family Leave Compensation
Qualified sick leave compensation. For purposes of the
credit for qualified sick and family leave compensation,
qualified sick leave compensation is compensation
(determined without regard to the exclusions under section
3231(e)(1)) paid under the Emergency Paid Sick Leave Act
(EPSLA) as enacted under the Families First Coronavirus
Response Act (FFCRA). However, some compensation
Instructions for Form CT-1 (2020)

Qualified family leave compensation. For purposes of
the credit for qualified sick and family leave compensation,
-7-

Line 2—Tier 1 Employer Medicare Tax

qualified family leave compensation is compensation
(determined without regard to the exclusions under section
3231(e)(1)) paid under the Emergency Family and Medical
Leave Expansion Act as enacted under the FFCRA.
However, some compensation eligible for the credit should
not be reported as taxable compensation on lines 2, 3, 4, 5,
6, and 7. See the Caution above the line 2 instructions, later,
for more information. See the instructions for line 16 for
information about the credit for qualified sick and family leave
compensation.
Emergency Family and Medical Leave Expansion Act.
Under the Emergency Family and Medical Leave Expansion
Act, certain government employers and private employers
with fewer than 500 employees provide paid family leave
under the Family and Medical Leave Act of 1993 to an
employee who has been employed for at least 30 calendar
days and is unable to work or telework. The Emergency
Family and Medical Leave Expansion Act required such
employers to provide leave to such employees after March
31, 2020, and before January 1, 2021. The COVID-related
Tax Relief Act of 2020 extended the periods of leave for
which employers may continue to claim tax credits for
providing such leave starting from January 1, 2021, through
March 31, 2021, although the requirement that employers
provide the leave still expired on December 31, 2020. The
Emergency Family and Medical Leave Expansion Act covers
periods of leave during which an employee is unable to work
or telework due to the need to care for a child because the
school or place of care has been closed, or the childcare
provider is unavailable, due to COVID-19 related reasons.
The first 10 days for which an employee takes leave may be
unpaid. During this period, employees may use other forms
of paid leave, such as qualified sick leave, accrued sick
leave, annual leave, or other paid time off. After an employee
takes leave for 10 days, the employer provides the employee
paid leave (that is, qualified family leave compensation) for
up to 10 weeks. For more information from the Department of
Labor on these requirements, possible exceptions, and the
limitations discussed later, see DOL.gov/agencies/whd/
pandemic.

Enter the compensation (other than tips and sick pay),
including qualified sick leave compensation, qualified family
leave compensation, and qualified compensation (other than
qualified health plan expenses) for the employee retention
credit, subject to Tier 1 Employer Medicare tax in the
Compensation column. Multiply by 1.45% and enter the
result in the Tax column.

Line 3—Tier 2 Employer Tax

Enter the compensation (other than tips), including qualified
sick leave compensation, qualified family leave
compensation, and qualified compensation (other than
qualified health plan expenses) for the employee retention
credit, subject to Tier 2 Employer tax in the Compensation
column. Don't enter more than $102,300 per employee.
Multiply by 13.1% and enter the result in the Tax column.

Line 4—Tier 1 Employee Tax

!

CAUTION

Don't reduce the Tier 1 Employee compensation or
tax by the deferred amount of the Tier 1 Employee
tax reported on line 22.

Enter the compensation, including tips reported (but
excluding sick pay), qualified sick leave compensation,
qualified family leave compensation, and qualified
compensation (other than qualified health plan expenses) for
the employee retention credit, subject to Tier 1 Employee tax
in the Compensation column. Multiply by 6.2% and enter the
result in the Tax column. The total amount listed in the
Compensation column for lines 4 and 10 combined may not
be more than $137,700 per employee.
Stop collecting the 6.2% Tier 1 Employee tax when the
employee's compensation (including sick pay), tips, qualified
sick leave compensation, qualified family leave
compensation, and qualified compensation (other than
qualified health plan expenses) for the employee retention
credit reach the maximum for the year ($137,700 for 2020).
However, your liability for Tier 1 Employer tax on
compensation continues until the compensation (including
sick pay), and qualified compensation (other than qualified
health plan expenses) for the employee retention credit, but
not including tips, totals $137,700 for the year.

Government employers aren't eligible for the credit

TIP for qualified sick and family leave compensation;

however, government employers still aren't liable for
the Tier 1 Employer tax (line 1) on the qualified family leave
compensation paid to employees.

Line 5—Tier 1 Employee Medicare
Tax

Rate of pay and limit on compensation. The rate of pay
must be at least two-thirds of the employee's regular rate of
pay (as determined under the Fair Labor Standards Act of
1938), multiplied by the number of hours the employee
otherwise would have been scheduled to work. The qualified
family leave compensation can't exceed $200 per day or
$10,000 in the aggregate per employee for the year.
For more information about qualified family leave
compensation, go to IRS.gov/PLC.

Enter the compensation, including tips reported (but
excluding sick pay), qualified sick leave compensation,
qualified family leave compensation, and qualified
compensation (other than qualified health plan expenses) for
the employee retention credit subject to Tier 1 Employee
Medicare tax in the Compensation column. Multiply by 1.45%
and enter the result in the Tax column. For information on
reporting tips, see Tips, earlier.

Although qualified sick leave compensation and
qualified family leave compensation are defined as
CAUTION compensation determined without regard to the
exclusions under section 3231(e)(1) for proposes of the
credit for qualified sick and family leave compensation, don't
include any compensation otherwise excluded under section
3231(e)(1) when reporting qualified sick leave compensation
and qualified family leave compensation on lines 2, 3, 4, 5, 6,
and 7.

Line 6—Tier 1 Employee Additional
Medicare Tax Withholding

!

Enter the compensation, including tips reported (but
excluding sick pay), qualified sick leave compensation,
qualified family leave compensation, and qualified
compensation (other than qualified health plan expenses) for
the employee retention credit, that is subject to Tier 1
Employee Additional Medicare Tax withholding. You’re
required to begin withholding Tier 1 Employee Additional

-8-

Instructions for Form CT-1 (2020)

tax), make entries on lines 8–12. If you’re subject to only the
employer or employee tax, complete only the applicable
lines. Multiply by the appropriate rates and enter the results
in the Tax column.

Medicare Tax in the pay period in which you pay
compensation in excess of $200,000 to an employee and
continue to withhold it each pay period until the end of the
calendar year. Tier 1 Employee Additional Medicare Tax is
only imposed on the employee. There is no employer share
of Tier 1 Additional Medicare Tax. All compensation
(including sick pay) that is subject to Tier 1 Medicare tax is
subject to Tier 1 Employee Additional Medicare Tax if paid in
excess of the $200,000 withholding threshold.

Line 13—Total Tax Based on
Compensation

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

Line 14—Adjustments to Taxes Based
on Compensation

Go to IRS.gov/ADMT for more information on Tier 1
Employee Additional Medicare Tax.

Line 7—Tier 2 Employee Tax

Enter the compensation, including tips reported, qualified
sick leave compensation, qualified family leave
compensation, and qualified compensation (other than
qualified health plan expenses) for the employee retention
credit, subject to Tier 2 Employee tax in the Compensation
column. Only the first $102,300 of the employee's
compensation (including tips, qualified sick leave
compensation, qualified family leave compensation, and
qualified compensation (other than qualified health plan
expenses) for the employee retention credit) for 2020 is
subject to this tax. Multiply by 4.9% and enter the result in the
Tax column. For information on reporting tips, see Tips,
earlier.

!

CAUTION

Enter on line 14:

• A fractions-of-cents adjustment (see Adjustment for

fractions of cents, later);
• Credits for overpayments of penalty or interest paid on tax
for earlier years; and
• Any uncollected Tier 1 Employee tax, Tier 1 Employee
Medicare tax, Tier 1 Employee Additional Medicare Tax, and
Tier 2 Employee tax on tips.
Enter the total of these adjustments in the Tax column. If
you’re reporting both an addition and a subtraction, enter
only the difference between the two on line 14. If the net
adjustment is negative, report the amount on line 14 using a
minus sign, if possible. If your computer software doesn't
allow the use of minus signs, you may use parentheses.

Any compensation paid during the current year that
was earned in prior years (reported to the Railroad
CAUTION Retirement Board on Form BA-4, Report of
Creditable Compensation Adjustments) is taxable at the
current year tax rates, unless special timing rules for
nonqualified deferred compensation apply. See Pub.15-A.
Include such compensation with current year compensation
on lines 1–7, as appropriate.

!

Don't include on line 14 any 2019 overpayment that is
applied to this year's return (this is included on line 20).
Required statement. Except for adjustments for fractions of
cents, explain amounts entered on line 14 in a separate
statement. Include your name, EIN, calendar year of the
return, and “Form CT-1” on each page you attach. Include in
the statement the following information.
• An explanation of the item the adjustment is intended to
correct showing the compensation subject to Tier 1 and Tier
2 taxes and their respective tax rates.
• The amount of the adjustment.
• The name and account number of any employee from
whom employee tax was undercollected or overcollected.
• How you and the employee have settled any
undercollection or overcollection of employee tax.

Lines 8–12—Tier 1 Taxes on Sick Pay
Don't include qualified sick leave compensation,
qualified family leave compensation, or qualified
CAUTION compensation for the employee retention credit on
lines 8 through 12. Don't reduce your Tier 1 Employer
compensation or tax for sick pay on line 8 by the deferred
amount of the Tier 1 Employer tax reported on line 21. Don't
reduce the Tier 1 Employee compensation or tax for sick pay
on line 10 by the deferred amount of the Tier 1 Employee tax
reported on line 22.

!

Adjustment for fractions of cents. If there is a small
difference between the total employee tax (lines 4–7 and 10–
12) and the total actually withheld from employee
compensation including tips, it may be caused by rounding to
the nearest cent each time you figured payroll. The
difference, positive or negative, is your fractions-of-cents
adjustment to be reported on line 14. If the actual amount
withheld is less, report a negative adjustment in the entry
space. If the actual amount is more, report a positive
adjustment.

Enter any sick pay payments during the year that are
subject to Tier 1 taxes, Tier 1 Medicare taxes, and Tier 1
Employee Additional Medicare Tax withholding in the
Compensation column. Multiply by the rate for the line and
enter the result in the Tax column for that line. For Tier 1
Employer taxes, the total amount listed in the Compensation
column for lines 1 and 8 combined may not be more than
$137,700 per employee. For Tier 1 Employee taxes, the total
amount listed in the Compensation column for lines 4 and 10
combined may not be more than $137,700 per employee.
Tier 1 Medicare taxes aren't subject to a dollar limitation.

If this is the only entry on line 14, you’re not required

TIP to attach a statement explaining the adjustment.

All compensation (including sick pay) that is subject to
Tier 1 Medicare tax is subject to Tier 1 Employee Additional
Medicare Tax if paid in excess of the $200,000 withholding
threshold.

Line 15—Total Taxes After
Adjustments

If you’re a railroad employer paying your employees sick
pay, or a third-party payer who didn't notify the employer of
the payments (thereby subject to the employee and employer
Instructions for Form CT-1 (2020)

Don't use line 14 for prior period adjustments. Make
all prior period adjustments on Form CT-1 X.

Combine the amounts shown on lines 13 and 14 and enter
the result on line 15.

-9-

Line 16—Nonrefundable Portion of
Credit for Qualified Sick and Family
Leave Compensation

You must include the full amount (both the

TIP nonrefundable and refundable portions) of the credit

for qualified sick and family leave compensation in
your gross income for the tax year that includes the last day
of any calendar quarter in which a credit is allowed. You can't
use the same compensation for the employee retention credit
and the credits for paid sick and family leave.

Form CT-1 and these instructions use the terms

TIP “nonrefundable” and “refundable” when discussing

credits. The term “nonrefundable” means the portion
of the credit which is limited by law to the amount of certain
Tier 1 employer taxes. The term “refundable” means the
portion of the credit which is in excess of these taxes.

Line 17—Nonrefundable Portion of
Employee Retention Credit

Enter the nonrefundable portion of the employee retention
credit from Worksheet 1, Step 3, line 3h. For calendar year
2020, the employee retention credit is 50% of the qualified
compensation you paid to your employees between March
13, 2020, and December 31, 2020. Qualified compensation
includes qualified health plan expenses for the employee
retention credit. The nonrefundable portion of the credit is
limited to the Tier 1 Employer tax (line 1) and Tier 1 Employer
tax—Sick pay (line 8) after that share is first reduced by any
credit claimed for the nonrefundable portion of the credit for
qualified sick and family leave compensation. Any credit in
excess of the remaining amount of the Tier 1 Employer tax
(line 1) and Tier 1 Employer tax—Sick pay (line 8), is
refundable and reported on Form CT-1, line 24. For more
information on the employee retention credit, go to IRS.gov/
ERC.

Businesses and tax-exempt organizations with fewer than
500 employees that provide paid sick leave under the EPSLA
and/or provide paid family leave under the Emergency Family
and Medical Leave Expansion Act are eligible to claim the
credit for qualified sick and family leave compensation for the
period after March 31, 2020, and before April 1, 2021. For
purposes of this credit, qualified sick leave compensation
and qualified family leave compensation are compensation
(determined without regard to the exclusions under section
3231(e)(1)) paid under the EPSLA and Emergency Family
and Medical Leave Expansion Act, respectively. Any credit
claimed on your 2020 Form CT-1 is limited to compensation
for the period March 31, 2020, and before January 1, 2021.
Credit for compensation for the period beginning after
December 31, 2020, will be claimed on your 2021 Form
CT-1. Enter the nonrefundable portion of the credit for
qualified sick and family leave compensation from Worksheet
1, Step 2, line 2j. The credit for qualified sick and family leave
compensation consists of the qualified sick leave
compensation, the qualified family leave compensation, the
qualified health plan expenses allocable to that
compensation, and the Tier 1 Employer Medicare tax
allocable to that compensation. The nonrefundable portion of
the credit is limited to the Tier 1 Employer tax (line 1) and Tier
1 Employer tax—Sick Pay (line 8).

Qualified compensation for the employee retention
credit. For calendar year 2020, the tax credit is equal to
50% of qualified compensation paid to employees between
March 13, 2020, and December 31, 2020. Qualified
compensation, including qualified health plan expenses, is
limited to a maximum of $10,000 for each employee for the
cumulative total of 2020. Qualified compensation is
compensation paid to certain employees during any period in
a quarter in which your operations are fully or partially
suspended due to a government order or in which you have
had a significant decline in gross receipts. For calendar year
2020, the law provides that the significant decline in gross
receipts is the period beginning with any quarter in which
your gross receipts are less than 50% of what they were in
the same calendar quarter in 2019 and ending with the
quarter that follows the first quarter beginning after the
quarter in which your gross receipts were greater than 80%
of what they were in the same calendar quarter in 2019.
For calendar year 2020, the compensation and qualified
health plan expenses considered in calculating your credit
depend on the size of your workforce. Eligible employers that
had an average number of 100 or fewer full-time employees
during 2019 count compensation paid to all their employees
and the qualified health plan expenses paid or incurred for all
employees during any period in the quarter in which
operations are fully or partially suspended due to a
government order or during a quarter in which there has been
a significant decline in gross receipts. Eligible employers that
had an average number of more than 100 full-time
employees in 2019 may count only compensation paid to
employees for time that the employees weren't working, and
qualified health plan expenses paid or incurred by the
employer allocable to the time those employees weren't
working, due to the suspension or significant decline in gross
receipts; these eligible employers can count only
compensation that doesn't exceed what the employer would
have paid that employee for working for the same amount of

Any credit in excess of the remaining amount of the Tier 1
Employer tax (line 1) and Tier 1 Employer tax—Sick Pay
(line 8) is refundable and reported on Form CT-1, line 23. For
more information on the credit for qualified sick and family
leave compensation, go to IRS.gov/PLC.
Qualified health plan expenses allocable to qualified
sick leave and family leave compensation. The credit for
qualified sick leave compensation and qualified family leave
compensation is increased to cover the qualified health plan
expenses that are properly allocable to the qualified leave
compensation for which the credit is allowed. These qualified
health plan expenses are amounts paid or incurred by the
employer to provide and maintain a group health plan but
only to the extent such amounts are excluded from the
employees’ income as coverage under an accident or health
plan. The amount of qualified health plan expenses generally
includes both the portion of the cost paid by the employer
and the portion of the cost paid by the employee with pre-tax
salary reduction contributions. However, the qualified health
plan expenses shouldn't include amounts that the employee
paid for with after-tax contributions. For more information, go
to IRS.gov/PLC.

-10-

Instructions for Form CT-1 (2020)

The deferred amount of the Tier 1 employer taxes

time during the prior 30 days. More information on the
employee retention credit is available at IRS.gov/ERC.

TIP from lines 1 and 8 is a deferral of deposits and

payments, not a deferral of liability. You won't receive
a refund or credit of any amount of these taxes already
deposited or paid for the year. However, in determining
whether any amount of these taxes was already deposited
for this purpose, you can consider prior deposits on or after
March 27, 2020, as first being deposited for taxes other than
the Tier 1 employer taxes from lines 1 and 8. Although
employers depositing taxes using EFTPS can identify the
subcategory of separate deposits for the different taxes,
those entries are for informational purposes only. The IRS
doesn't use that information in comparing liabilities reported
on your return and the total deposits made.

Qualified health plan expenses for the employee retention credit. Qualified compensation for the employee
retention credit includes qualified health plan expenses.
Qualified health plan expenses are amounts paid or incurred
by the employer to provide and maintain a group health plan
but only to the extent such amounts are excluded from the
employees' income as coverage under an accident or health
plan. The amount of qualified health plan expenses taken
into account in determining the amount of qualified
compensation generally includes both the portion of the cost
paid by the employer and the portion of the cost paid by the
employee with pre-tax salary reduction contributions.
However, the qualified health plan expenses shouldn't
include amounts that the employee paid for with after-tax
contributions. Generally, the qualified health plan expense is
the amount that is allocable to the hours for which the
employees receive qualified compensation for the employee
retention credit. However, qualified health plan expenses for
purposes of the employee retention credit may include health
plan expenses allocable to the applicable periods even if the
employer isn’t paying any qualified compensation to the
employee. For more information, see the frequently asked
questions for qualified health plan expenses, available at
IRS.gov/ERC.

Paying the deferred amount of the Tier 1 employer taxes. One-half of the Tier 1 employer taxes deferred is due by
December 31, 2021, and the remainder is due by December
31, 2022. Any payments or deposits you make before
December 31, 2021, are first applied against your payment
due on December 31, 2021, and then applied against your
payment due on December 31, 2022. For example, if your
Tier 1 employer taxes reported on lines 1 and 8 for 2020 are
$20,000 and you deposited $5,000 of the $20,000 and defer
$15,000 on line 21, then you must pay $5,000 by December
31, 2021, and $10,000 by December 31, 2022. However, if
those taxes for 2020 were $20,000 and you deposited
$15,000 of the $20,000 and defer $5,000 on line 21, then you
don’t need to pay any deferred amount by December 31,
2021, because 50% of the amount that could have been
deferred ($10,000) has already been paid and is first applied
against your payment that would be due on December 31,
2021. Accordingly, you must pay the $5,000 deferral by
December 31, 2022.
If you initially deferred (that is, didn’t deposit) these taxes
and later decided to pay or deposit in 2020, see Adjusting tax
liability for the deferred amount of taxes that you pay or
deposit in 2020, later. For additional information, go to
IRS.gov/ETD.

Line 18—Total Nonrefundable Credits
Add lines 16 and 17. Enter the total on line 18.

Line 19—Total Taxes After
Adjustments and Nonrefundable
Credits

Subtract line 18 from line 15 and enter the result on line 19.

Line 20—Total Deposits for the Year

Enter the total Form CT-1 deposits for the year, including any
overpayment that you applied from filing Form CT-1 X and
any overpayment that you applied from your 2019 return.

How to pay the deferred amount of Tier 1 employer taxes. You may pay the amount you owe electronically using
EFTPS, by credit or debit card, or by a check or money order.
The preferred method of payment is EFTPS. For more
information, visit EFTPS.gov, or call 800-555-4477 or
800-733-4829 (TDD). To pay the deferred amount, select
Form CT-1 and the option for payment due on an IRS notice.
To pay by credit or debit card, go to IRS.gov/PayByCard.
If you pay by check or money order, include a 2020 Form
CT-1(V), Payment Voucher. Make the check or money order
payable to “United States Treasury.” Enter your EIN, “Form
CT-1,” and “2020” on your check or money order.
Where to send payments. Payments should be sent to:

Line 21—Deferred Amount of the Tier
1 Employer Tax

Enter the amount of the Tier 1 Employer tax (line 1) and Tier
1 Employer tax—Sick pay (line 8) that you’re deferring.
Employers, including government employers, can defer the
deposit of these taxes due on or after March 27, 2020, and
before January 1, 2021, as well as payment due for these
taxes on compensation paid on or after March 27, 2020, and
before January 1, 2021. The taxes that can be deferred are
included on lines 1 and 8. However, you determine the
amount that can be deferred by only considering tax on
compensation related to deposits and payments due on or
after March 27, 2020. Don’t reduce the amount reported on
line 21 by any credits claimed on lines 16 and 17. However,
you can’t defer tax that you have already paid; therefore, the
maximum amount that can be deferred for the year is the
lesser of (1) the total of your Tier 1 employer taxes on lines 1
and 8 along with the total of Tier 1 Employee taxes on lines 4
and 10 (if you deferred employee taxes; see the instructions
for line 22), or (2) the excess of (a) line 15 over (b) line 20.
For more information about the deferral of these deposits,
including limitations on the maximum amount you can defer,
go to IRS.gov/ETD.

Instructions for Form CT-1 (2020)

Department of the Treasury
Internal Revenue Service
Cincinnati, OH 45999-0030

Line 22—Deferred Amount of the Tier
1 Employee Tax

Enter the amount of the Tier 1 Employee tax (line 4) and Tier
1 Employee tax—Sick pay (line 10) that you’re deferring for
the year. On August 8, 2020, the President issued a
Presidential Memorandum directing the Secretary of the

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tax on those amounts. For more information about the
deferral of the Tier 1 employee taxes, see Notice 2020-65
and Notice 2021-11. For information on paying the deferred
taxes, see How to pay the deferred amount of Tier 1
employer taxes, earlier.
If you initially deferred (that is, didn’t deposit) these taxes
and later decided to pay or deposit in 2020, see Adjusting tax
liability for the deferred amount of taxes that you pay or
deposit in 2020, later.

Treasury to use his authority pursuant to section 7508A of
the Internal Revenue Code to defer the withholding, deposit,
and payment of certain payroll tax obligations. In Notice
2020-65, the Secretary made relief available under section
7508A to employers required to withhold certain Tier 1
employee taxes from compensation paid to employees. In
response to section 274 of the COVID-related Tax Relief Act
of 2020, requiring additional tax relief, Notice 2020-65 was
modified by Notice 2021-11. Specifically, under Notice
2020-65 and Notice 2021-11, the due date for withholding
and payment of the Tier 1 Employee tax (line 4) and Tier 1
Employee tax—Sick pay (line 10) on applicable
compensation is postponed until the period beginning on
January 1, 2021, and ending on December 31, 2021.
Applicable compensation is total compensation included on
lines 4 and 10 of less than $4,000 in any biweekly pay period
(or the equivalent threshold amount for other pay periods),
paid on a pay date during the period beginning on
September 1, 2020, and ending on December 31, 2020. The
determination of whether the deferral of withholding or
payment of these taxes is available is made on a pay
period-by-pay period basis. Nothing prohibits employers from
getting employee input on whether to apply the relief to
postpone the due date for the withholding and payment of
these taxes on applicable compensation paid to the
employee.

Line 23—Refundable Portion of Credit
for Qualified Sick and Family Leave
Compensation

Businesses and tax-exempt organizations with fewer than
500 employees that provide paid sick leave under the EPSLA
and/or provide paid family leave under the Emergency Family
and Medical Leave Expansion Act are eligible to claim the
credit for qualified sick and family leave compensation. For
purposes of this credit, qualified sick leave compensation
and qualified family leave compensation are compensation
(determined without regard to the exclusions under section
3231(e)(1)) paid under the EPSLA and Emergency Family
and Medical Leave Expansion Act, respectively. Enter the
refundable portion of the credit for qualified sick and family
leave compensation from Worksheet 1, Step 2, line 2k. The
credit for qualified sick and family leave compensation
consists of the qualified sick leave compensation, the
qualified family leave compensation, the allocable qualified
health plan expenses, and the Tier 1 Employer Medicare tax
allocable to that compensation. The refundable portion of the
credit is allowed after the Tier 1 employer taxes from lines 1
and 8 are reduced to zero by nonrefundable credits.

You can’t defer tax that you have already paid; therefore,
the maximum amount that can be deferred for the year is the
lesser of (1) the total of your Tier 1 employer taxes on lines 1
and 8 (if you deferred employer taxes, see the instructions for
line 21) along with the total of Tier 1 employee taxes on lines
4 and 10), or (2) the excess of (a) line 15 over (b) line 20.
If you paid an employee supplemental compensation

Line 24—Refundable Portion of
Employee Retention Credit

TIP (for example, a bonus or commission) and included

the supplemental compensation with the employee’s
regular compensation in a single payment (that is, in a single
paycheck) for a pay period, but you didn’t specifically identify
the amount of each, then the entire amount of the payment
must be below $4,000 (or equivalent amount for pay periods
other than a biweekly pay period) to be eligible for the
deferral of the withholding and payment of the Tier 1
employee taxes. If the entire amount is below $4,000, then
you may defer the withholding and payment of the Tier 1
employee taxes on the entire payment of the compensation.
If you paid the supplemental compensation separately from
the employee’s regular compensation (that is, in a separate
check), or you combined the compensation in a single
payment but you specifically identified the amount of each,
then the supplemental compensation is disregarded for
purposes of determining whether the regular compensation
was below $4,000 (or equivalent amount), but the
supplemental compensation isn’t eligible for the deferral of
the withholding and payment of the Tier 1 employee taxes.

Enter the refundable portion of the employee retention credit
from Worksheet 1, Step 3, line 3i. The employee retention
credit is 50% of the qualified compensation you paid to your
employees between March 13, 2020, and December 31,
2020. The refundable portion of the credit is allowed after the
Tier 1 employer taxes from lines 1 and 8 are reduced to zero
by nonrefundable credits.

Line 25—Total Deposits, Deferrals,
and Refundable Credits

Add lines 20, 21, 22, 23, and 24. Enter the total on line 25.

Line 26—Total Advances Received
from Filing Form(s) 7200 for the Year

Enter the total advances received from filing Form(s) 7200 for
the year. If you filed Form 7200 but you haven’t received the
advance before filing Form CT-1, don’t include that amount.
Employers were eligible to file Form 7200 if they paid
qualified sick leave compensation, qualified family leave
compensation, and/or qualified compensation for the
employee retention credit and the amount of deposits they
retained wasn’t sufficient to cover the cost of qualified sick
and family leave compensation and the employee retention
credit.

Paying the deferred amount of the Tier 1 employee taxes. The due date for the withholding and payment of the Tier
1 employee taxes included on lines 4 and 10 is postponed
until the period beginning on January 1, 2021, and ending on
December 31, 2021. The employer must withhold and pay
the total deferred Tier 1 employee taxes ratably from
compensation paid to the employee between January 1,
2021, and December 31, 2021. If necessary, the employer
may make arrangements to otherwise collect the total
deferred taxes from the employee. The employer is liable to
pay the deferred taxes to the IRS and must do so before
January 1, 2022, to avoid interest, penalties, and additions to

Form 7200 may be filed up to the earlier of March 1,

TIP 2021, or the filing of Form CT-1 for the year.

However, if you file Form 7200 after the end of the

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Instructions for Form CT-1 (2020)

Line 30—Qualified Sick Leave
Compensation

year, it's possible that it may not be processed prior to the
processing of the filed Form CT-1. Advance payment
requests on Form 7200 won't be paid after your Form CT-1 is
processed. When the IRS processes Form CT-1, we will
correct the amount reported on line 26 to match the amount
of advance payments issued or contact you to reconcile the
difference before we finish processing Form CT-1.

Enter the qualified sick leave compensation you paid to your
employees during the year. Qualified sick leave
compensation reported on this line is compensation
(determined without regard to the exclusions under section
3231(e)(1)) paid under the EPSLA as enacted under the
FFCRA. This amount is also entered on Worksheet 1, Step
2 , line 2a. See the instructions for line 16 for information
about the credit for qualified sick and family leave
compensation. For more information about qualified sick
leave compensation, go to IRS.gov/PLC.

Line 27—Total Deposits, Deferrals,
and Refundable Credits Less
Advances

Subtract line 26 from line 25 and enter the result on line 27.

Line 31—Qualified Health Plan
Expenses Allocable to Compensation
Reported on Line 30

Line 28—Balance Due

If line 19 is more than line 27, enter the difference on line 28.
Otherwise, see Line 29—Overpayment, later. You don't have
to pay if line 28 is under $1. Generally, you should show a
balance due on line 28 only if your total railroad retirement
taxes based on compensation for the year (line 19) are less
than $2,500. However, see Accuracy of Deposits Rule,
earlier, regarding payments made under the accuracy of
deposits rule.

Enter the qualified health plan expenses allocable to qualified
sick leave compensation. This amount is also entered on
Worksheet 1, Step 2, line 2b.

Line 32—Qualified Family Leave
Compensation

If you were required to make federal tax deposits, pay the
amount shown on line 28 by EFT. If you weren't required to
make federal tax deposits or you're a monthly schedule
depositor making a payment under the accuracy of deposits
rule, you may pay the amount shown on line 28 by EFT,
check, or money order. For more information on electronic
payment options, go to IRS.gov/Payments.

Enter the qualified family leave compensation you paid to
your employees during the year. Qualified family leave
compensation reported on this line is compensation
(determined without regard to the exclusions under section
3231(e)(1)) paid under the Emergency Family and Medical
Leave Expansion Act as enacted under the FFCRA. This
amount is also entered on Worksheet 1, Step 2, line 2e. See
the instructions for line 16 for information about the credit for
qualified sick and family leave compensation. For more
information about qualified family leave compensation, go to
IRS.gov/PLC.

If you pay by EFT, file your return using the address under
Where To File, earlier. Don't file Form CT-1(V), Payment
Voucher. If you pay by check or money order, make it
payable to “United States Treasury.” Enter your EIN, “Form
CT-1,” and “2020” on your check or money order. Complete
Form CT-1(V) and enclose with Form CT-1.

Line 33—Qualified Health Plan
Expenses Allocable to Compensation
Reported on Line 32

Line 29—Overpayment

If line 27 is more than line 19, enter the difference on line 29.
Never make an entry on both lines 29 and 28. If line 29 is
less than $1, we will send you a refund or apply it to your next
return only if you ask us in writing to do so.

Enter the qualified health plan expenses allocable to qualified
family leave compensation. This amount is also entered on
Worksheet 1, Step 2, line 2f.

If you deposited more than the correct amount for the
year, you can have the overpayment refunded or applied to
your next return by checking the appropriate box on line 29.
Check only one box on line 29. If you don't check either box
or if you check both boxes, generally we will apply the
overpayment to your next return. Regardless of any boxes
you check or don't check, we may apply your overpayment to
any past due tax account that is shown in our records under
your EIN.

Line 34—Qualified Compensation for
the Employee Retention Credit

Enter the qualified compensation for the employee retention
credit (excluding the amount of any qualified health plan
expenses allocable to the compensation). This amount is
also entered on Worksheet 1, Step 3, line 3a. See the
instructions for line 17 for information about the employee
retention credit. For more information about qualified
compensation for the employee retention credit, go to
IRS.gov/ERC.

Lines 30 Through 35
The amounts entered on lines 30 through 35 are
amounts that you use on Worksheet 1 to figure the
CAUTION credit for qualified sick and family leave
compensation and the employee retention credit. If you’re
claiming these credits, you must enter the applicable
amounts.

Line 35—Qualified Health Plan
Expenses Allocable to Compensation
Reported on Line 34

!

Instructions for Form CT-1 (2020)

Enter the qualified health plan expenses for the employee
retention credit. These expenses are generally allocable to
the compensation reported on Form CT-1, line 34. However,
in some circumstances, qualified health plan expenses for
purposes of the employee retention credit are treated as

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Nonrefundable portion of employee retention credit
(line 17). The nonrefundable portion of the employee
retention credit is limited to the Tier 1 employer taxes
reported on Form CT-1, lines 1 and 8, on compensation paid
in the year that is remaining after that share is first reduced
by any credit claimed on Form CT-1, line 16, for the
nonrefundable portion of the credit for qualified sick and
family leave compensation. In completing Part II or Form
945-A, you take into account the nonrefundable portion of the
employee retention credit against the liability for the first
payroll payment of the year, but not below zero. Then reduce
the liability for each successive payroll payment of the year
until the nonrefundable portion of the credit is used. Any
employee retention credit that is remaining at the end of the
year because it exceeds the Tier 1 employer taxes reported
on Form CT-1, lines 1 and 8, is claimed on line 24 as a
refundable credit. The refundable portion of the credit doesn’t
reduce the liability reported on Part II or Form 945-A.

allocable to qualified compensation for the employee
retention credit even if no compensation is paid to the
employees during the applicable period (for example, when
you furlough an employee because your operations are fully
or partially suspended due to a government order but you
continue to pay qualified health plan expenses). For more
information, go to IRS.gov/ERC. The amount from line 35 is
also entered on Worksheet 1, Step 3, line 3b.

Part II. Record of Railroad Retirement
Tax Liability

This is a summary of your yearly tax liability, not a summary
of deposits made. If line 15 is less than $2,500, don't
complete Part II or Form 945-A.

If you’re a monthly schedule depositor, enter your tax
liability for each month and figure the total liability for the
year. If you don't enter your tax liability for each month, the
IRS won't know when you should have made deposits and
may assess an “averaged” FTD penalty. See section 11 of
Pub. 15. If your tax liability for any month is negative, don't
enter a negative amount for the month. Instead, enter zero for
the month and subtract that negative amount from your tax
liability for the next month.

Example. Maple Co. is a monthly schedule depositor that
pays employees every Friday. In 2020, Maple Co. had pay
dates every Friday of 2020 starting January 3, 2020. Maple
Co. paid qualified wages for the employee retention credit on
May 1 and May 8. The nonrefundable portion of the
employee retention credit for the year is $3,000. On Part II,
Maple Co. will use the $3,000 to reduce the liability for the
January 3 pay date, but not below zero. If any nonrefundable
portion of the credit remains, Maple Co. applies it to the
liability for the January 10 pay date, then the January 17 pay
date, and so forth until the entire $3,000 is used.

Adjusting tax liability for nonrefundable credits claimed
on lines 16 and 17. Monthly schedule depositors and
semiweekly schedule depositors must account for
nonrefundable credits claimed on lines 16 and 17 when
reporting their tax liabilities on Part II or Form 945-A. The total
tax liability for the year must equal the amount reported on
line 19. Failure to account for the nonrefundable credits on
Part II or Form 945-A may cause Part II or Form 945-A to
report more than the total tax liability reported on line 19.
Don't reduce your monthly tax liability reported on Part II or
your daily tax liability reported on Form 945-A below zero.
Nonrefundable portion of credit for qualified sick and
family leave compensation (line 16). The nonrefundable
portion of the credit for qualified sick and family leave
compensation is limited to the Tier 1 employer taxes reported
on Form CT-1, lines 1 and 8, on compensation paid in the
year. In completing Part II or Form 945-A, you take into
account the nonrefundable portion of the credit for qualified
sick and family leave compensation (including the qualified
health plan expenses allocable to that compensation) against
the liability for the first payroll payment of the year, but not
below zero. Then reduce the liability for each successive
payroll payment of the year until the nonrefundable portion of
the credit is used. Any credit for qualified sick and family
leave compensation that is remaining at the end of the year
because it exceeds the Tier 1 employer taxes reported on
Form CT-1, lines 1 and 8, is claimed on line 23 as a
refundable credit. The refundable portion of the credit doesn’t
reduce the liability reported on Part II or Form 945-A.

You may reduce your deposits by the amount of the

TIP nonrefundable and refundable portions of the credit

for qualified sick and family leave compensation, the
nonrefundable and refundable portions of the employee
retention credit, and any deferred taxes, as discussed earlier
under Reducing your deposits for COVID-19 credits.
Adjusting tax liability for the deferred amount of taxes
that you pay or deposit in 2020. If you defer the Tier 1
employer taxes reported on lines 1 and 8 and/or the Tier 1
employee taxes reported on lines 4 and 10 and subsequently
pay or deposit that deferred amount during 2020, you should
report the amount of the payment or deposit on Part II or
Form 945-A on the date of the payment or deposit and not
the date of liability. You shouldn’t include any portion of the
deferred amount of taxes already paid or deposited by
December 31, 2020, on Form CT-1, line 21 or 22.
For example, if you're a monthly schedule depositor that
has an RRTA liability of $500 every month in 2020 and you
defer $100 of the Tier 1 employer taxes on your June liability,
but deposit your deferred amount of $100 together with your
$500 deposit for your November tax liability, you would report
$400 for your June tax liability ($500 minus $100) and $600
for your November liability ($500 plus $100) on Part II. Don’t
include the $100 deferral on Form CT-1, line 21.

Example. Maple Co. is a monthly schedule depositor that
pays employees every Friday. In 2020, Maple Co. had pay
dates every Friday of 2020 starting January 3, 2020. Maple
Co. paid qualified sick and family leave compensation on
May 1 and May 8. The nonrefundable portion of the credit for
qualified sick and family leave compensation for the year is
$3,000. On Part II, Maple Co. will use the $3,000 to reduce
the liability for the January 3 pay date, but not below zero. If
any nonrefundable portion of the credit remains, Maple Co.
applies it to the liability for the January 10 pay date, then the
January 17 pay date, and so forth until the entire $3,000 is
used.

!

The amount shown on line V must equal the amount
shown on line 19.

CAUTION

If you’re a semiweekly schedule depositor or if you
accumulate $100,000 or more in tax liability on any day in a
deposit period, you must complete Form 945-A and file it with
Form CT-1. Don't complete lines I–V if you file Form 945-A.
The $100,000 tax liability threshold requiring a next-day
deposit is determined before you consider any reduction of
your liability for nonrefundable credits. See IRS.gov/ETD for
more information.
-14-

Instructions for Form CT-1 (2020)

Third-Party Designee

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.

If you want to allow an employee of your business, a return
preparer, or another third party to discuss your 2020 Form
CT-1 with the IRS, check the “Yes” box in the Third-Party
Designee section. Also, enter the designee's name, phone
number, and any five digits that person chooses as his or her
personal identification number (PIN).

Form CT-1 also may be signed by a duly authorized agent
of the taxpayer if a valid power of attorney has been filed.

By checking “Yes” you authorize the IRS to talk to the
person you named (your designee) about any questions we
may have while we process your return. You also authorize
your designee to do all of the following.
• Give us any information that is missing from your return.
• Call us for information about processing your return.
• Respond to certain IRS notices that you have shared with
the designee about math errors and return preparation. The
IRS won't send notices to your designee.

Alternative signature method. Corporate officers or duly
authorized agents may sign Form CT-1 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 IRS.gov/irb/
2005-28_IRB#RP-2005-39.

Paid Preparer Use Only

A paid preparer must sign Form CT-1 and provide the
information in the Paid Preparer Use Only section of Part I if
the preparer was paid to prepare Form CT-1 and isn't an
employee of the filing entity. The preparer must give you a
copy of the return in addition to the copy to be filed with the
IRS.

You’re not authorizing the designee to receive any refund
check, bind you to anything (including additional tax liability),
or otherwise represent you before the IRS. If you want to
expand the designee's authority, see Pub. 947.
The authorization will automatically expire 1 year from the
due date (without regard to extensions) for filing your 2020
Form CT-1. If you or your designee wants to revoke this
authorization, send the revocation or withdrawal to the IRS
office at which you file your Form CT-1.

If you're a paid preparer, enter your Preparer Tax
Identification Number (PTIN) in the space provided. Include
your complete address. If you work for a firm, enter the firm's
name and the EIN of the firm. You can apply for a PTIN
online or by filing Form W-12. For more information about
applying for a PTIN online, go to IRS.gov/PTIN. You can't use
your PTIN in place of the EIN of the tax preparation firm.

Who Must Sign

The following persons are authorized to sign the return for
each type of business entity.
• 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

Instructions for Form CT-1 (2020)

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

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Worksheet 1. Credit for Qualified Sick and Family Leave Compensation and the Employee Retention
Credit
Determine how you will complete this worksheet
• If you paid both qualified sick and family leave compensation and qualified compensation for purposes of the employee retention credit this
year, complete Step 1, Step 2, and Step 3.
• If you paid qualified sick and family leave compensation this year but you didn't pay any qualified compensation for purposes of the employee
retention credit this year, complete Step1 and Step 2 only.
• If you paid qualified compensation for purposes of the employee retention credit this year but you didn't pay any qualified sick and family
leave compensation this year, complete Step 1, and then Step 3 only.
Step 1.

Step 2.

1a
1b
1c
2a
2a(i)
2a(ii)
2b
2c
2d
2e
2e(i)
2e(ii)
2f
2g
2h
2i
2j
2k

Step 3.

3a
3b
3c
3d
3e
3f
3g
3h
3i

Figure the Tier 1 Employer Tax
Enter the amount from Form CT-1, line 1 (Tax Column) . . . . . . . . . . . . . . . . . . . . . . . 1a
Enter the amount from Form CT-1, line 8 (Tax Column) . . . . . . . . . . . . . . . . . . . . . . . 1b
Tier 1 Employer tax. Add lines 1a and 1b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Figure the credit for qualified sick and family leave compensation
Qualified sick leave compensation reported on Form CT-1, line 30 . . . . . . . . . . . . . .
Enter the amount, if any, included on line 2a that is compensation excluded from the
definition of compensation under section 3231(e)(1) . . . . . . . . . . . . . . . . . . . . . . . . .
Subtract line 2a(i) from line 2a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Qualified health plan expenses allocable to qualified sick leave compensation
reported on Form CT-1, line 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier 1 Employer Medicare tax on qualified sick leave compensation. Multiply line 2a(ii)
by 1.45% (0.0145) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit for qualified sick leave compensation. Add lines 2a, 2b, and 2c . . . . . . . .
Qualified family leave compensation reported on Form CT-1, line 32 . . . . . . . . . . . . .
Enter the amount, if any, included on line 2e that is compensation excluded from the
definition of compensation under section 3231(e)(1) . . . . . . . . . . . . . . . . . . . . . . . . .
Subtract line 2e(i) from line 2e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Qualified health plan expenses allocable to qualified family leave compensation
reported on Form CT-1, line 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier 1 Employer Medicare tax on qualified family leave compensation. Multiply
line 2e(ii) by 1.45% (0.0145) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit for qualified family leave compensation. Add lines 2e, 2f, and 2g . . . . . . .
Credit for qualified sick and family leave compensation. Add lines 2d
and 2h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nonrefundable portion of credit for qualified sick and family leave
compensation. Enter the smaller of line 1c or line 2i. Enter this amount on Form
CT-1, line 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Refundable portion of credit for qualified sick and family leave compensation.
Subtract line 2j from line 2i and enter this amount on Form CT-1, line 23 . . . . . . . . . .
Figure the employee retention credit
Qualified compensation for the employee retention credit reported on Form CT-1,
line 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Qualified health plan expenses allocable to qualified compensation for the employee
retention credit reported on Form CT-1, line 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add lines 3a and 3b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retention credit. Multiply line 3c by 50% (0.50) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Enter the Tier 1 Employer tax from Step 1, line 1c . . . . . . . . . . . . . . . . . . . . . . . . . . .
Enter the amount of the nonrefundable portion of the credit for qualified sick and family
leave compensation from Step 2, line 2j . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subtract line 3f from line 3e. If zero or less, enter zero. . . . . . . . . . . . . . . . . . . . . . . . .
Nonrefundable portion of employee retention credit. Enter the smaller of line 3d
or line 3g. Enter this amount on Form CT-1, line 17 . . . . . . . . . . . . . . . . . . . . . . . . . .
Refundable portion of employee retention credit. Subtract line 3h from line 3d and
enter this amount on Form CT-1, line 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

-16-

1c

2a
2a(i)
2a(ii)
2b
2c
2e
2e(i)

2d

2e(ii)
2f
2g

2h
2i
2j
2k

3a
3b
3c
3e

3d

3f
3g
3h
3i

Instructions for Form CT-1 (2020)