Table of Contents
- What Is the Purpose of Form CT-1 X?
- Where Can You Get Help?
- When Should You File Form CT-1 X?
- Is There a Deadline for Filing Form CT-1 X?
- Where Should You File Form CT-1 X?
- How Should You Complete Form CT-1 X?
- Use a Separate Form CT-1 X for Each Year You Are Correcting
- EIN, RRB Number, Name, and Address
- Return You Are Correcting
- Enter the Date You Discovered Errors
- Must You Make an Entry on Each Line?
- How Should You Report Negative Amounts?
- How Should You Make Entries on Form CT-1 X?
- What About Penalties and Interest?
- Overview of the Process
Use Form CT-1 X to correct errors on a previously filed Form CT-1. Use Form CT-1 X to correct:
Tier 1 Employee tax, Tier 1 Employee Medicare tax, Tier 1 Employee Additional Medicare Tax, and Tier 2 Employee tax; and
Tier 1 Employer tax, Tier 1 Employer Medicare tax, and Tier 2 Employer tax.
Use Form 843, Claim for Refund and Request for Abatement, to request a refund or abatement of assessed interest or penalties. Do not request a refund or abatement of assessed interest or penalties on Form CT-1 or Form CT-1 X.
When you discover an error on a previously filed Form CT-1, you must:
Correct that error using Form CT-1 X,
File a separate Form CT-1 X for each Form CT-1 that you are correcting, and
File Form CT-1 X separately. Do not file Form CT-1 X with Form CT-1.
If you did not file a Form CT-1 for one or more years, do not use Form CT-1 X. Instead, file Form CT-1 for each of those years. See also When Should You File Form CT-1 X, later. However, if you did not file Forms CT-1 because you improperly treated workers as independent contractors or nonemployees and are now reclassifying them as employees, see the instructions for line 22, later.
Report the correction of underreported and overreported amounts for the same tax period on a single Form CT-1 X, unless you are requesting a refund or abatement. If you are requesting a refund or abatement and are correcting both underreported and overreported amounts, file one Form CT-1 X correcting the underreported amounts only and a second Form CT-1 X correcting the overreported amounts.
You will use the adjustment process if you underreported employment taxes and are making a payment, or if you overreported employment taxes and will be applying the credit to Form CT-1 for the period during which you file Form CT-1 X. However, see the Caution under Is There a Deadline for Filing Form CT-1 X, later, if you are correcting overreported amounts during the last 90 days of a period of limitations. You will use the claim process if you overreported employment taxes and are requesting a refund or abatement of the overreported amount. Follow the chart on the back of Form CT-1 X for help in choosing whether to use the adjustment process or the claim process. Be sure to provide a detailed explanation on line 23 for each correction that you show on Form CT-1 X.
Continue to report current year adjustments on Form CT-1, line 14.
You have additional requirements to complete when filing Form CT-1 X, such as certifying that you filed (or will file) all applicable Forms W-2, Wage and Tax Statements, and Forms W-2c, Corrected Wage and Tax Statements, with the Social Security Administration (SSA). For corrections of overreported Tier 1 and Tier 2 taxes, you must make any certifications that apply to your situation.
Be sure to give us a detailed explanation on line 23 for each correction you show on Form CT-1 X.
For help filing Form CT-1 X or for questions about RRTA taxes and tax corrections, you can:
Visit the IRS website at www.irs.gov/businesses and click on the Employment Taxes link under Businesses Topics,
See Pub. 15 (Circular E), Employer's Tax Guide, or
Call the IRS Business and Specialty Tax Line toll free at 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability) Monday–Friday from 7:00 a.m. – 7:00 p.m. local time (Alaska and Hawaii follow Pacific time).
See also How Can You Order Forms, Instructions, and Publications from the IRS, later.
File Form CT-1 X when you discover an error on a previously filed Form CT-1.
However, if your only errors on Form CT-1 relate to RRTA tax liabilities reported in Part II of Form CT-1 or on Form 945-A, Annual Record of Federal Tax Liability, do not file Form CT-1 X. To correct federal tax liabilities reported in Part II of Form CT-1, file Form 945-A, but only enter the monthly totals. The daily entries are not required. For more information about correcting RRTA tax liabilities reported on Form 945-A, see the Form 945-A instructions.
Example—You owe tax.
On March 11, 2014, you discovered that you underreported $1,000 of RRTA compensation on your 2013 Form CT-1. File Form CT-1 X and pay the amount you owe by March 2, 2015, because you discovered the error in 2014, and March 2, 2015, is the due date for that year. If you file Form CT-1 X before March 2, 2015, pay the amount you owe by the time you file.
Example—You want your credit applied to Form CT-1.
You filed your 2014 Form CT-1 on February 25, 2015, and payments were timely made. On May 4, 2015, you discover that you overreported tax on your 2014 Form CT-1. You file Form CT-1 X on June 3, 2015. The IRS treats your credit as a tax deposit made on January 1, 2015. When you file your 2015 Form CT-1, include the amount from Form CT-1 X, line 20, on the “Total railroad retirement tax deposits” line of your 2015 Form CT-1.
Generally, you may correct overreported taxes on a previously filed Form CT-1 if you file Form CT-1 X within 3 years of the date Form CT-1 was filed or 2 years from the date you paid the tax reported on Form CT-1, whichever is later. You may correct underreported taxes on a previously filed Form CT-1 if you file Form CT-1 X within 3 years of the date the Form CT-1 was filed. We call each of these time frames a “period of limitations.” For purposes of the period of limitations, Form CT-1 is considered filed on the last day in February of the succeeding year if filed before that date.
You filed your 2013 Form CT-1 on January 28, 2014, and payments were timely made. The IRS treats the return as if it were filed on February 28, 2014. On January 13, 2017, you discover that you overreported RRTA compensation on that form by $10,000. To correct the error you must file Form CT-1 X by February 28, 2017, which is the end of the period of limitations, and use the claim process.
Send your completed Form CT-1 X to:
Department of the Treasury
Internal Revenue Service Center
Cincinnati, OH 45999-0007
Use a separate Form CT-1 X for each Form CT-1 that you are correcting. For example, if you found errors on your Forms CT-1 for 2013 and 2014, file one Form CT-1 X to correct the 2013 Form CT-1. File a second Form CT-1 X to correct the 2014 Form CT-1.
Enter your EIN, RRB number, name, and address in the spaces provided. Also enter your name and EIN on the top of pages 2 and 3. Be sure to write your name, EIN, “Form CT-1 X,” and the calendar year you are correcting on the top of any attachments. If your address has changed since you filed your Form CT-1, enter the corrected information and the IRS will update your address of record.
Enter the calendar year of the Form CT-1 you are correcting at the top of page 1. Enter the calendar year on pages 2 and 3 and on any attachments. Be sure to write your name, EIN, “Form CT-1 X,” and the calendar year you are correcting on the top of any attachments.
You must enter the date you discovered errors. You discover an error when you have enough information to be able to correct it. If you are reporting several errors that you discovered at different times, enter the earliest date you discovered an error here. Report any subsequent dates and related errors on line 23.
You must provide all of the information requested at the top of page 1 of Form CT-1 X. You must check one box (but not both) in Part 1. In Part 2, you must check the box on line 3 and any applicable boxes on lines 4 and 5. In Part 3, if any line does not apply, leave it blank. Complete Parts 4 and 5 as instructed.
Form CT-1 X uses negative numbers to show reductions in tax (credits) and positive numbers to show additional tax (amounts you owe).
When reporting a negative amount in columns 3 and 4, use a minus sign instead of parentheses. For example, enter “-10.59” instead of “(10.59).” However, if you are completing the return on your computer and your software only allows you to use parentheses to report negative amounts, you may use them.
You can help the IRS process Form CT-1 X timely and accurately if you follow these guidelines.
Type or print your entries.
Use Courier font (if possible) for all typed or computer-generated entries.
Omit dollar signs. You may use commas and decimal points, if desired. Enter dollar amounts to the left of any preprinted decimal point and cents to the right of it.
Always show an amount for cents. Do not round entries to whole dollars.
Complete all three pages and sign Form CT-1 X on page 3.
Staple multiple sheets in the upper-left corner.
Generally, your correction of an underreported amount will not be subject to a failure-to-pay penalty, FTD penalty, or interest if you:
File on time (by the due date of the year in which you discover the error),
Pay the amount shown on line 20 by the time you file Form CT-1 X,
Enter the date you discovered the error, and
Explain in detail the grounds and facts relied on to support the correction.
No correction will be eligible for interest-free treatment if any of the following apply.
The underreported amounts relate to an issue that was raised in an examination of a prior period.
You knowingly underreported your employment tax liability.
You received a notice and demand for payment.
You received a Notice of Determination of Worker Classification.
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. Do not attach an explanation when you file your return.
The process to correct a previously filed Form CT-1 or file a claim is outlined below.
If you underreported the tax on a previously filed Form CT-1, check the box on line 1 and pay any additional amount you owe by the time you file Form CT-1 X. For details on how to make a payment, see the instructions for line 20, later.
Example—You underreported RRTA taxes.
On June 23, 2014, you discovered an error that results in additional tax on your 2013 Form CT-1. File Form CT-1 X by March 2, 2015, and pay the amount you owe by the time you file. See When Should You File Form CT-1 X, earlier. Do not attach Form CT-1 X to your 2014 Form CT-1.
If you overreported the tax on a previously filed Form CT-1, choose one of the following options.
Use the adjustment process. Check the box on line 1 to apply any credit (negative amount) from line 20 to Form CT-1 for the year during which you file Form CT-1 X.
Use the claim process. Check the box on line 2 to file a claim on Form CT-1 X requesting a refund or abatement of the amount shown on line 20.
Example—You want your overreported tax applied as a credit on Form CT-1.
On December 18, 2015, you discover you overreported your tax on your 2014 Form CT-1 and want to choose the adjustment process. To allow the IRS enough time to process the credit, you file Form CT-1 X on February 8, 2016, and take the credit on your 2016 Form CT-1.
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