Enter the compensation (other than tips and sick pay) subject to Tier I tax in the Compensation column. Do not enter more than $87,000 per employee. Multiply by 6.2% and enter the result in the Tax column.

Enter the compensation (other than tips and sick pay) subject to Tier I Medicare tax in the Compensation column. Multiply by 1.45% and enter the result in the Tax column.

Enter the compensation (other than tips) subject to Tier II tax in the Compensation column. Do not enter more than $64,500 per employee. Multiply by 14.2% and enter the result in the Tax column.

Enter the compensation, including tips reported, subject to employee Tier I tax in the Compensation column. Do not enter more than $87,000 per employee. Multiply by 6.2% and enter the result in the Tax column.

Stop collecting the 6.2% Tier I employee tax when the employee's wages and tips reach the maximum for the year ($87,000 for 2003). However, your liability for Tier I employer tax on compensation continues until the compensation, not including tips, totals $87,000 for the year.

Enter the compensation, including tips reported, subject to employee Tier I 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 on page 2.

Enter the compensation, including tips reported, subject to
Tier II employee tax in the Compensation column. Only the first $64,500 of the employee's compensation for 2003 is subject to this tax. Multiply by 4.9% and enter the result in the Tax column. For information on reporting tips, see Tips on page 2.

Any compensation paid during the current year that was earned in prior years (reported to the Railroad Retirement Board on Form BA-4, Report of Creditable Compensation Adjustments) is taxable at the current year tax rates. Include such compensation with current year compensation on lines 1 through 6, as appropriate.

Enter any sick pay payments during the year that are subject to Tier I taxes and Tier I Medicare taxes in the Compensation column. If you are a railroad employer paying your employees sick pay, or a third-party payer who did not notify the employer of the payments (thereby subject to the employee and employer tax), make entries on lines 7 through 10. If you are 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.

Enter on line 12:

Enter the total of these adjustments in the Tax column. If you are reporting both an addition and a subtraction, enter only the difference between the two on line 12.

Do not include on line 12 the 2002 overpayment that is applied to this year's return (this is included on line 14).

Required statement.   Except for adjustments for fractions of cents, explain amounts entered on line 12 in a separate statement. Include your name, employer identification number, 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 I and Tier II taxes and the respective tax rates.
• The year(s) to which the adjustment relates.
• The amount of the adjustment for each year.
• 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.

  

  A timely filed return is considered to be filed on the last day of February of the year after the close of the tax year. Generally, adjustments for prior year returns may be made only within 3 years of that date.

Fractions of cents.   If there is a difference between the total employee tax (lines 4, 5, 6, 9, and 10) and the total actually deducted (employee compensation including tips plus the employer's contribution) due to rounding fractions of cents when collecting the tax, report the deduction or addition on
line 12.

  

  If this is the only entry on line 12, you are not required to attach a statement explaining the adjustment.

If the net adjustment on line 12 is:

Enter the total Form CT-1 taxes you deposited. Also, include any overpayment applied from your 2002 Form CT-1.

Subtract line 14 from line 13. You should have a balance due only if line 13 is less than $2,500, unless the balance due is a shortfall amount for monthly schedule depositors as explained under the Accuracy of deposits rule on page 4.

Form CT-1(V), Payment Voucher, has instructions for making a payment with Form CT-1. You do not have to pay if line 15 is less than $1.

Enter the overpayment on the designated entry line. Then check the appropriate box to have the overpayment applied to your 2004 Form CT-1 or refunded to you. If line 16 is less than $1, we will send you a refund or apply it to your next return only on written request.

If you want to allow an employee of your business, a return preparer, or other third party to discuss your 2003 Form CT-1 with the IRS, check the “Yes” box in the Third Party Designee section of Form CT-1. Also, enter the designee's name, phone number, and any five digits that person chooses as his or her personal identification number (PIN).

By checking the “Yes” box, you are authorizing the IRS to call the designee to answer any questions relating to the information reported on Form CT-1. You are also authorizing the designee to:

You are 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 or would like the designee to receive copies of notices and communications, see Pub. 947, Practice Before the IRS and Power of Attorney.

The authorization will automatically expire one year from the due date (without regard to extensions) for filing your 2003 Form CT-1. If you or your designee wants to revoke this authorization, send a written statement of revocation to the Internal Revenue Service Center, Cincinnati, OH 45999. See Pub. 947 for more information.