Employer's Quarterly Federal Tax Return

2024

Instructions for Form CT-1
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 2024 tax rates and compensation bases, see
Employer and Employee Taxes, later.
The COVID-19 related credit for qualified sick and
family leave compensation is limited to leave taken
after March 31, 2020, and before October 1, 2021,
and may no longer be claimed on Form CT-1.
Generally, the credit for qualified sick and family leave
compensation, as enacted under the Families First
Coronavirus Response Act (FFCRA) and amended and
extended by the COVID-related Tax Relief Act of 2020, for
leave taken after March 31, 2020, and before April 1,
2021, and the credit for qualified sick and family leave
compensation under sections 3131, 3132, and 3133 of
the Internal Revenue Code, as enacted under the
American Rescue Plan Act of 2021 (the ARP), for leave
taken after March 31, 2021, and before October 1, 2021,
have expired. However, employers that pay qualified sick
and family leave compensation in 2024 for leave taken
after March 31, 2020, and before October 1, 2021, are
eligible to claim a credit for qualified sick and family leave
compensation in 2024. Effective for tax years beginning
after 2023, the lines used to claim the credit for qualified
sick and family leave compensation have been removed
from Form CT-1 because it would be extremely rare for an
employer to pay compensation in 2024 for qualified sick
and family leave taken after March 31, 2020, and before
October 1, 2021. If you're eligible to claim the credit for
qualified sick and family leave compensation because you
paid the compensation in 2024 for an earlier applicable
leave period, file Form CT-1 X, Adjusted Employer's
Annual Railroad Retirement Tax Return or Claim for
Refund, after filing Form CT-1 to claim the credit for
qualified sick and family leave compensation paid in 2024.
Filing a Form CT-1 X before filing a Form CT-1 for the year
may result in errors or delays in processing your Form
CT-1 X.

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
Jan 6, 2025

and related tax duties (that is, withholding, reporting, and
paying over income taxes and taxes imposed by the
Railroad Retirement Tax Act (RRTA)) 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.
To get more information about EFTPS or to enroll in
EFTPS, go to EFTPS.gov or call 800-555-4477. To
contact EFTPS using Telecommunications Relay Services
(TRS) for people who are deaf, hard of hearing, or have a
speech disability, dial 711 and then provide the TRS
assistant the 800-555-4477 number above or
800-733-4829. 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.

Instructions for Form CT-1 (2024) Catalog Number 16005H
Department of the Treasury Internal Revenue Service www.irs.gov

• The Railroad Retirement Board (RRB) website at
RRB.gov contains additional employer reporting
information and instructions.
How to get forms and publications. You can download
or print most 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.
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.

Photographs of Missing Children

The IRS is a proud partner with the National Center for
Missing & Exploited Children® (NCMEC). Photographs of
missing children selected by the Center may appear in
instructions on pages that would otherwise be blank. You
can help bring these children home by looking at the
photographs and calling 1-800-THE-LOST
(1-800-843-5678) if you recognize a child.

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 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.

Who Must File

File Form CT-1 if you paid one or more employees
compensation subject to tax under the 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.
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
2

employer identification 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 February 28, 2025.

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.
Income 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.
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 taxes
in a prior year. See the rules for nonqualified deferred
compensation plans in section 5 of Pub. 15-A.
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
Instructions for Form CT-1 (2024)

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:
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.

Employer and Employee Taxes
Tax Rates and Compensation Bases
Tax Rates

Compensation
Paid in 2024

Tier 1
Employer and Employee: Each pay 6.2%
of first . . . . . . . . . . . . . . . . . . . . . . . . . . .

$168,600

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

$125,100

Employee: Pays 4.9% of first

$125,100

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

Instructions for Form CT-1 (2024)

Employer Taxes

Employers must pay both Tier 1 and Tier 2 taxes, except
for 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 the table above for the
2024 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.

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.
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 the employee’s compensation and
tips for tax year 2024 reach $168,600. 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) their 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.

3

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 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.

Depositing Taxes

For Tier 1 and Tier 2 taxes, you’re either a monthly
schedule depositor or a semiweekly schedule depositor.
However, see $2,500 Rule and $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.
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 2025 is
calendar year 2023.
Use the table below to determine which deposit
schedule to follow for 2025.
IF you reported taxes
(Form CT-1, line 19) for the
lookback period (2023) of...

THEN for 2025 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.
• 2023 Form CT-1, line 19—$49,000.
4

• 2024 Form CT-1, line 15—$52,000.

Rose Co. is a monthly schedule depositor for 2025
because its Form CT-1 taxes for its lookback period
(calendar year 2023) weren't more than $50,000.
However, for 2026, Rose Co. is a semiweekly schedule
depositor because the total taxes exceeded $50,000 for
its lookback period (calendar year 2024).
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 and second years of your business. However, see
$100,000 Next-Day Deposit Rule, later.
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 (2023). Maple
Co. discovered in March 2025 that the tax during the
lookback period (2023) was understated by $10,000 and
will correct this error with an adjustment on Form CT-1 X
filed for 2023.
Maple Co. is a monthly schedule depositor for 2025
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 2023 taxes or
2025 taxes. See Treasury Decision 9405, available at
IRS.gov/irb/2008-32_IRB#TD-9405.

When To Deposit
Monthly Schedule Depositor
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 January but didn't pay any
compensation during February. Under the monthly
schedule deposit rule, Spruce Co. must deposit the
combined taxes for the January paydays by February 15.
Spruce Co. doesn't have a deposit requirement for
February (due by March 15) because no compensation
was paid and, therefore, Spruce Co. doesn't have a tax
liability for the month.

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

Instructions for Form CT-1 (2024)

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 May 30, 2025 (Friday), payday must be
deposited by June 4, 2025 (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

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.
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).

Exceptions to the Deposit Rules
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 railroad retirement
taxes based on compensation (line 15) 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. If you're a monthly
schedule depositor and accumulate a $100,000 tax
liability on any day during the deposit period, you become
a semiweekly schedule depositor on the next day and
Instructions for Form CT-1 (2024)

remain so for at least the rest of the calendar year and for
the following calendar year.
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 5, 2025. Because this was the first year
of its business, its Form CT-1 taxes for its lookback period
(2023) are considered to be zero, and Elm, Inc., is a
monthly schedule depositor. On Wednesday, May 7, it
paid compensation for the first time and accumulated
taxes of $40,000. On Friday, May 9, 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 9
(Friday), Elm, Inc., must deposit the $100,000 by May 12
(Monday), the next business day. Elm, Inc., became a
semiweekly schedule depositor on May 10. Elm, Inc., will
be a semiweekly schedule depositor for the rest of 2025
and for 2026.
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.

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. To contact EFTPS using
TRS for people who are deaf, hard of hearing, or have a
speech disability, dial 711 and then provide the TRS
assistant the 800-555-4477 number above or
800-733-4829. Additional information about EFTPS is also
available in Pub. 966.

!

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.
5

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. 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 February
2025, the shortfall makeup date is March 19, 2025
(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.
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 CT-1 X.
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 a failure-to-deposit (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, available on page 579 of Internal Revenue
Bulletin 2001-50 at IRS.gov/pub/irs-irbs/irb01-50.pdf, for
more information.
6

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 U.S. 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.

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
“2024.” 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.

Line 1—Tier 1 Employer Tax

Enter the compensation (other than tips and sick pay)
subject to Tier 1 Employer 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 1 and 8 combined may not be more than
$168,600 per employee.

Line 2—Tier 1 Employer Medicare Tax

Enter the compensation (other than tips and sick pay)
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) subject to Tier 2
Employer tax in the Compensation column. Don't enter
more than $125,100 per employee. Multiply by 13.1% and
enter the result in the Tax column.

Line 4—Tier 1 Employee Tax

Enter the compensation, including tips reported (but
excluding sick pay), 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 $168,600 per employee.

Instructions for Form CT-1 (2024)

Stop collecting the 6.2% Tier 1 Employee tax when the
employee's compensation (including sick pay) and tips
reach the maximum for the year ($168,600 for 2024).
However, your liability for Tier 1 Employer tax on
compensation continues until the compensation paid in
2024 (including sick pay), but not including tips, totals
$168,600 for the year.

Line 5—Tier 1 Employee Medicare Tax

Enter the compensation, including tips reported (but
excluding sick pay), 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.

Line 6—Tier 1 Employee Additional
Medicare Tax Withholding

Enter the compensation, including tips reported (but
excluding sick pay), that is subject to Tier 1 Employee
Additional Medicare Tax withholding. You’re required to
begin withholding Tier 1 Employee Additional 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.
Go to IRS.gov/ADMTfaqs for more information on Tier 1
Employee Additional Medicare Tax.

Line 7—Tier 2 Employee Tax

Enter the compensation, including tips reported, subject to
Tier 2 Employee tax in the Compensation column. Only
the first $125,100 of the employee's compensation
(including tips) 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.

Any compensation paid during the current year
that was earned in prior years (reported to the
CAUTION RRB 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.

!

Lines 8–12—Tier 1 Taxes on Sick Pay

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 $168,600 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 $168,600 per employee. Tier 1 Medicare
taxes aren't subject to a dollar limitation.
Instructions for Form CT-1 (2024)

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.
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 taxes), 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.

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

!

CAUTION

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

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.
Don't include on line 14 any 2023 overpayment that is
applied to this year's return (this is included on line 16).
Required statement. Except for adjustments for
fractions of cents, explain amounts entered on line 14 in a
separate statement. Include your name, your EIN, the
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.
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
7

the actual amount withheld is less, report a negative
adjustment in the entry space. If the actual amount is
more, report a positive adjustment.
If this is the only entry on line 14, you’re not

TIP required to attach a statement explaining the
adjustment.

Line 15—Total Railroad Retirement
Taxes Based on Compensation
Combine the amounts shown on lines 13 and 14 and
enter the result on line 15.

Line 16—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 2023
return.

Line 17—Balance Due

If line 15 is more than line 16, enter the difference on
line 17. Otherwise, see the instructions for line 18, later.
You don't have to pay if line 17 is under $1. Generally, you
should have a balance due only if your total railroad
retirement taxes based on compensation (line 15) are less
than $2,500. However, see Accuracy of deposits rule,
earlier, regarding payments made under the accuracy of
deposits rule.
If you were required to make federal tax deposits, pay
the amount shown on line 17 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 17 by EFT, check, or money order. For more
information on electronic payment options, go to IRS.gov/
Payments.
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 “2024” on your check or money
order. Complete Form CT-1(V) and enclose with Form
CT-1.

Line 18—Overpayment

If line 16 is more than line 15, enter the difference on
line 18. Never make an entry on both lines 18 and 17.
If line 18 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.
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 18. Check only one box on line 18. 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 on line 18, we may
apply your overpayment to any past due tax account that
is shown in our records under your EIN.

8

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.

!

The amount shown on line V must equal the
amount shown on line 15.

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.

Third-Party Designee

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

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, the
vice president, or another principal officer duly authorized
to sign.
Instructions for Form CT-1 (2024)

• Partnership (including an LLC treated as a
partnership) or unincorporated organization—A
responsible and duly authorized partner, member, or
officer having knowledge of its affairs.
• Single-member LLC treated as a disregarded entity
for federal income tax purposes—The owner of the
LLC or a principal officer duly authorized to sign.
• Trust or estate—The fiduciary.
Form CT-1 may also be signed by a duly authorized
agent of the taxpayer if a valid power of attorney has been
filed.
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.
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.
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.

Instructions for Form CT-1 (2024)

Privacy Act and Paperwork Reduction Act Notice. We
ask for the information on Form CT-1 to carry out the
Internal Revenue laws of the United States. You're
required to give us this information. We need it to ensure
that you're complying with these laws and to allow us to
figure and collect the right amount of tax. Our authority to
ask for information is found in sections 6001, 6011, and
6012(a) and their regulations. Section 6109 requires you
to provide your identifying number on the return. If you
don't provide the information we ask for, or provide false or
fraudulent information, you may be subject to penalties.
You're not required to provide the information requested
on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number.
Books and records relating to a form or its instructions
must be retained as long as their contents may become
material in the administration of any Internal Revenue law.
Generally, tax returns and return information are
confidential, as required by section 6103. However,
section 6103 allows or requires the IRS to disclose or give
the information shown on your tax return to others as
described in the Code. For example, we may disclose your
tax information to the Department of Justice for civil and
criminal litigation, and to cities, states, the District of
Columbia, and U.S. commonwealths and territories for use
in administering their tax laws. We may also disclose this
information to other countries under a tax treaty, to federal
and state agencies to enforce federal nontax criminal
laws, or to federal law enforcement and intelligence
agencies to combat terrorism
The time needed to complete and file Form CT-1 will
vary depending on individual circumstances. The
estimated burden for employers filing Form CT-1 is
approved under OMB control number 1545-0029 and is
included in the estimates shown in the Instructions for
Form 941 and the Instructions for Form 944.

9