2023

Instructions for Form CT-1

Employer's Annual Railroad Retirement Tax Return

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code unless 

otherwise noted.

Contents Page

Future Developments ........................ 1

What's New ............................... 1

Reminders ................................ 1

General Instructions ......................... 2

Purpose of Form CT-1 ..................... 2

Who Must File .......................... 2

Where To File ........................... 3

When To File ........................... 3

Definitions ............................. 3

Employer and Employee Taxes .............. 4

Depositing Taxes ........................ 4

Penalties and Interest ..................... 6

Specific Instructions ......................... 7

Third-Party Designee ....................... 14

Who Must Sign ............................ 14

Paid Preparer Use Only ...................... 15

Worksheet 1. Credit for Qualified Sick and Family 

Leave Compensation Paid in 2023 for Leave 

Taken After March 31, 2020, and Before April 

1, 2021 .............................. 16

Worksheet 2. Credit for Qualified Sick and Family 

Leave Compensation Paid in 2023 for Leave 

Taken After March 31, 2021, and Before 

October 1, 2021 ........................ 17

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 

2023 tax rates and compensation bases, see Employer and 

Employee Taxes, later.

Credit for COBRA premium assistance payments. The 

COBRA premium assistance credit lines have been 

"Reserved for future use" on Form CT-1 because the first 

quarter of 2022 was the last quarter in which most employers 

may have been eligible to claim the COBRA premium 

assistance credit.

Section 9501 of the American Rescue Plan Act of 2021 

(the ARP) provided for COBRA premium assistance in the 

form of a full reduction in the premium otherwise payable by 

certain individuals and their families who elected COBRA 

continuation coverage due to a loss of coverage as the result 

of a reduction in hours or an involuntary termination of 

employment (assistance eligible individuals). This COBRA 

premium assistance was available for periods of coverage 

beginning on or after April 1, 2021, through periods of 

coverage beginning on or before September 30, 2021. A 

premium payee was entitled to the COBRA premium 

assistance credit at the time an eligible individual elected 

coverage. Therefore, due to the COBRA notice and election 

period requirements (generally, employers had 60 days to 

provide notice and assistance eligible individuals had 60 

days to elect coverage), the first quarter of 2022 was the last 

quarter in which most employers may have been eligible to 

claim the COBRA premium assistance credit.

Reminders

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. 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 

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 2023 for 

leave taken after March 31, 2020, and before October 1, 

2021, are eligible to claim a credit on Form CT-1 filed for 

2023. For more information, see the instructions for line 16, 

line 17b, line 23, and line 24b, later.

Use Worksheet 1 to figure the credit for leave taken after 

March 31, 2020, and before April 1, 2021. Use Worksheet 2 

to figure the credit for leave taken after March 31, 2021, and 

before October 1, 2021. For more information about the 

credit for qualified sick and family leave compensation, go to 

IRS.gov/PLC.

Advance payment of COVID-19 credits ended. Although 

you may pay qualified sick and family leave compensation in 

2023 for leave taken after March 31, 2020, and before 

October 1, 2021, you may no longer request an advance 

payment of any credit on Form 7200, Advance Payment of 

Employer Credits Due to COVID-19.

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 

Sep 26, 2023 Cat. No. 16005H
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 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.

• 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.

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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.

In accordance with Notice 2021-24, 2021-18 I.R.B. 1122, 

available at IRS.gov/irb/2021-18_IRB#NOT-2021-24, 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 

the credit for qualified sick and family leave compensation 

paid in 2023 for leave taken after March 31, 2020, and before 

October 1, 2021. For more information about qualified sick 

and family leave compensation, see the line 1 instructions, 

later. For more information about this credit, see the line 16 

and line 17b instructions, later. Because this credit is 

reported when the 2023 Form CT-1 is filed in 2024, 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.

If you reduced your deposits of employment taxes 

reported on Form 941 in anticipation of the credit for qualified 

sick and family leave compensation paid in 2023 for leave 

taken after March 31, 2020, and before October 1, 2021, 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 paid in 2023 for leave taken after 

March 31, 2020, and before October 1, 2021. Whether you 

owe tax, penalties, and interest will depend upon the credits 

properly claimed on Form CT-1.

Who Must File

For purposes of these instructions, all references to 

"sick pay" mean ordinary sick pay, not “qualified sick 

leave compensation.”

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.

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 

TIP

2 Instructions for Form CT-1 (2023)
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.

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 

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 29, 2024.

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.

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.

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:

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.

Instructions for Form CT-1 (2023) 3
Employer and Employee Taxes

Tax Rates and Compensation Bases

Tax Rates Compensation

 Paid in 2023

Tier 1

Employer and Employee: Each pay 6.2% 

of first ........................... $160,200

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 ............ $118,800

Employee: Pays 4.9% of first ............ $118,800

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 for leave taken after March 31, 2020, 

and before April 1, 2021, 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 the 

table above for the 2023 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 2023 reach $160,200. 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. 

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 

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 

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.

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 

4 Instructions for Form CT-1 (2023)
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 2024 is calendar year 

2022.

Use the table below to determine which deposit schedule 

to follow for 2024.

IF you reported taxes

(Form CT-1, line 19) for the 

lookback period (2022) of...

THEN for 2024 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.

• 2022 Form CT-1, line 19—$49,000.

• 2023 Form CT-1, line 19—$52,000.

Rose Co. is a monthly schedule depositor for 2024 

because its Form CT-1 taxes for its lookback period 

(calendar year 2022) weren't more than $50,000. However, 

for 2025, Rose Co. is a semiweekly schedule depositor 

because the total taxes exceeded $50,000 for its lookback 

period (calendar year 2023).

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 (2022). Maple Co. 

discovered in March 2024 that the tax during the lookback 

period (2022) was understated by $10,000 and will correct 

this error with an adjustment on Form CT-1 X filed for 2022.

Maple Co. is a monthly schedule depositor for 2024 

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 2022 taxes or 2024 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

for payments made on...

No later than...

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 26, 2024 

(Friday), payday must be deposited by May 1, 2024 

(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.

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 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.

CAUTION

!

Instructions for Form CT-1 (2023) 5
$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 remain so for at least 

the rest of the calendar year and for the following calendar 

year. The $100,000 tax liability threshold requiring a next-day 

deposit is determined before you consider any reduction of 

your liability for nonrefundable credits. For more information, 

including an example, see frequently asked question 17 at 

IRS.gov/ETD.

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 6, 2024. Because this was the first year of its 

business, its Form CT-1 taxes for its lookback period (2022) 

are considered to be zero, and Elm, Inc., is a monthly 

schedule depositor. On Wednesday, May 8, it paid 

compensation for the first time and accumulated taxes of 

$40,000. On Friday, May 10, 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 10 (Friday), Elm, Inc., 

must deposit the $100,000 by May 13 (Monday), the next 

business day. Elm, Inc., became a semiweekly schedule 

depositor on May 11. Elm, Inc., will be a semiweekly 

schedule depositor for the rest of 2024 and for 2025.

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.

Reducing your deposits for the credit for qualified 

sick and family leave compensation. Employers eligible 

to claim the credit for qualified sick and family leave 

compensation paid in 2023 for leave taken after March 31, 

2020, and before October 1, 2021, can reduce their deposits 

by the amount of their anticipated credit. 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 17b, later, for more information on this credit. 

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 Notice 2021-24. 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.

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.

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 February 2024, the shortfall 

makeup date is March 15, 2024 (Friday).

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 and Notice 2021-24.

CAUTION

!

6 Instructions for Form CT-1 (2023)
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.

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 

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.

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 

“2023.” 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.

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), 

including qualified sick leave compensation and qualified 

family leave compensation paid in 2023 for leave taken after 

March 31, 2021, and before October 1, 2021, subject to Tier 

1 Employer tax in the Compensation column. Don't include 

qualified sick leave compensation paid in 2023 or qualified 

family leave compensation paid in 2023 for leave taken after 

March 31, 2020, and before April 1, 2021. 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 $160,200 per employee.

CAUTION

!

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) or the Emergency Family and Medical Leave 

Expansion Act (Expanded FMLA) as enacted under the 

FFCRA and amended for purposes of the ARP. See the 

instructions for line 16 for information about the credit for 

qualified sick and family leave compensation paid in 2023 for 

leave taken after March 31, 2020, and before April 1, 2021, 

and the instructions for line 17b for information about the 

credit for qualified sick and family leave compensation paid in 

2023 for leave taken after March 31, 2021, and before 

October 1, 2021.

Although qualified sick leave compensation and 

qualified family leave compensation are defined as 

compensation determined without regard to the 

exclusions under section 3231(e)(1) for purposes 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 1, 2, 3, 4, 5, 

6, and 7.

EPSLA. Employers with fewer than 500 employees and, 

for leave taken after March 31, 2021, and before October 1, 

2021, certain governmental employers without regard to 

number of employees (except for the federal government and 

its agencies and instrumentalities unless described in section 

501(c)(1)) are entitled to a credit if they provide paid sick 

leave to employees that otherwise meets the requirements of 

the EPSLA. Under the EPSLA, as amended for purposes of 

the ARP, compensation is qualified sick leave compensation 

if paid to employees that are unable to work or telework 

before October 1, 2021, 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; or, for leave taken after March 31, 2021, 

and before October 1, 2021, is seeking or awaiting the results 

of a diagnostic test for, or a medical diagnosis of, COVID-19 

(and the employee has been exposed to COVID-19 or the 

employee's employer has requested such test or diagnosis), 

or the employee is obtaining immunizations related to 

COVID-19 or recovering from an injury, disability, illness, or 

condition related to such immunization;

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 son or daughter because the school or 

place of care for that child has been closed, or the childcare 

provider for that child 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, which for leave taken after March 31, 2021, 

and before October 1, 2021, includes to accompany an 

individual to obtain immunization related to COVID-19, or to 

care for an individual who is recovering from any injury, 

disability, illness, or condition related to the immunization.

CAUTION

!

Instructions for Form CT-1 (2023) 7
Son or daughter. A son or daughter must generally have 

been under 18 years of age or incapable of self-care because 

of a mental or physical disability. A son or daughter includes 

a biological child, adopted child, stepchild, foster child, legal 

ward, or child for whom the employee assumes parental 

status and carries out the obligations of a parent.

Limits on qualified sick leave compensation. The 

EPSLA, as amended for purposes of the ARP, 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 in total for leave taken after March 

31, 2020, and before April 1, 2021. The ARP resets this limit 

at 80 hours of paid sick leave for leave taken after March 31, 

2021, and before October 1, 2021. Therefore, for leave taken 

after March 31, 2020, and before April 1, 2021, the maximum 

amount of paid sick leave compensation 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). These maximum amounts also reset and apply to leave 

taken after March 31, 2021, and before October 1, 2021.

For more information about qualified sick leave 

compensation, go to IRS.gov/PLC.

Qualified family leave compensation. For purposes of 

the credit for qualified sick and family leave compensation, 

qualified family leave compensation is compensation 

(determined without regard to the exclusions under section 

3231(e)(1)) paid under the Expanded FMLA as enacted 

under the FFCRA and amended for purposes of the ARP. 

However, some compensation eligible for the credit should 

not be reported as taxable compensation on lines 1, 2, 3, 4, 

5, 6, and 7. See the Caution, earlier, for more information. 

See the instructions for line 16 for information about the credit 

for qualified sick and family leave compensation paid in 2023 

for leave taken after March 31, 2020, and before April 1, 

2021, and the instructions for line 17b for information about 

the credit for qualified sick and family leave compensation 

paid in 2023 for leave taken after March 31, 2021, and before 

October 1, 2021.

Expanded FMLA. Employers with fewer than 500 

employees and, for leave taken after March 31, 2021, and 

before October 1, 2021, certain governmental employers 

without regard to number of employees (except for the 

federal government and its agencies and instrumentalities 

unless described in section 501(c)(1)) are entitled to a credit 

under the FFCRA, as amended for purposes of the ARP, if 

they provide paid family leave to employees that otherwise 

meets the requirements of the Expanded FMLA. For leave 

taken after March 31, 2020, and before April 1, 2021, 

compensation is qualified family leave compensation if paid 

to an employee who has been employed for at least 30 

calendar days when an employee is unable to work due to 

the need to care for a son or daughter under 18 years of age 

or incapable of self-care because of a mental or physical 

disability because the school or place of care for that child 

has been closed, or the childcare provider for that child is 

unavailable, due to a public health emergency. See Son or 

daughter, earlier, for more information. For leave taken after 

March 31, 2021, and before October 1, 2021, the leave can 

be granted for any other reason provided by the EPSLA, as 

amended for purposes of the ARP.

For leave taken after March 31, 2020, and before April 1, 

2021, 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 leave taken after March 31, 2021, and 

before October 1, 2021, the 10-day rule discussed above 

doesn't apply and the paid leave can be provided for up to 12 

weeks.

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 would 

have otherwise been scheduled to work. For leave taken after 

March 31, 2020, and before April 1, 2021, the qualified family 

leave compensation can't exceed $200 per day or $10,000 in 

the aggregate per employee. For leave taken after March 31, 

2021, and before October 1, 2021, the limit resets and the 

total qualified family leave compensation can't exceed $200 

per day or $12,000 in the aggregate per employee.

For more information about qualified family leave 

compensation, go to IRS.gov/PLC.

Line 2—Tier 1 Employer Medicare Tax

Enter the compensation (other than tips and sick pay), 

including qualified sick leave compensation paid in 2023 and 

qualified family leave compensation paid in 2023, 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 paid in 2023 and qualified family 

leave compensation paid in 2023, subject to Tier 2 Employer 

tax in the Compensation column. Don't enter more than 

$118,800 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), qualified sick leave compensation paid in 

2023, and qualified family leave compensation paid in 2023, 

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 $160,200 per 

employee.

Stop collecting the 6.2% Tier 1 Employee tax when the 

employee's compensation (including sick pay), tips, qualified 

sick leave compensation paid in 2023, and qualified family 

leave compensation paid in 2023, reach the maximum for the 

year ($160,200 for 2023). However, your liability for Tier 1 

Employer tax on compensation continues until the 

compensation paid in 2023 (including sick pay), but not 

including tips, totals $160,200 for the year.

8 Instructions for Form CT-1 (2023)
Line 5—Tier 1 Employee Medicare Tax

Enter the compensation, including tips reported (but 

excluding sick pay), qualified sick leave compensation paid in 

2023, and qualified family leave compensation paid in 2023, 

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), qualified sick leave compensation paid in 

2023, and qualified family leave compensation paid in 2023, 

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, qualified 

sick leave compensation paid in 2023, and qualified family 

leave compensation paid in 2023, subject to Tier 2 Employee 

tax in the Compensation column. Only the first $118,800 of 

the employee's compensation (including tips, qualified sick 

leave compensation paid in 2023, and qualified family leave 

compensation paid in 2023) 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 Railroad 

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.

Lines 8–12—Tier 1 Taxes on Sick Pay

Don't include qualified sick leave compensation paid 

in 2023 or qualified family leave compensation paid 

in 2023 on lines 8 through 12.

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 

$160,200 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 $160,200 per employee. 

Tier 1 Medicare taxes aren't subject to a dollar limitation.

CAUTION

!

CAUTION

!

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 

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.

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

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 2022 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.

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.

CAUTION

!

Instructions for Form CT-1 (2023) 9
If this is the only entry on line 14, you’re not required 

to attach a statement explaining the adjustment.

Line 15—Total Taxes After 

Adjustments

Combine the amounts shown on lines 13 and 14 and enter 

the result on line 15.

Form CT-1 and these instructions use the terms 

“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 

taxes. The term “refundable” means the portion of the credit 

which is in excess of those taxes.

Line 16—Nonrefundable Portion of 

Credit for Qualified Sick and Family 

Leave Compensation for Leave Taken 

After March 31, 2020, and Before April 

1, 2021

Complete line 16 only if qualified sick leave 

compensation and/or qualified family leave 

compensation was paid in 2023 for leave taken after 

March 31, 2020, and before April 1, 2021.

Certain private employers with fewer than 500 employees 

that provide paid sick leave under the EPSLA and/or provide 

paid family leave under the Expanded FMLA are eligible to 

claim the credit for qualified sick and family leave 

compensation for leave taken 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 Expanded FMLA. 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).

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 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 

TIP TIP

CAUTION

!

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.

You must include the full amount (both the 

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.

Line 17b—Nonrefundable Portion of 

Credit for Qualified Sick and Family 

Leave Compensation for Leave Taken 

After March 31, 2021, and Before 

October 1, 2021

Complete line 17b only if qualified sick leave 

compensation and/or qualified family leave 

compensation was paid in 2023 for leave taken after 

March 31, 2021, and before October 1, 2021.

Employers with fewer than 500 employees and certain 

governmental employers without regard to number of 

employees (except for the federal government and its 

agencies and instrumentalities unless described in section 

501(c)(1)) are entitled to a credit if they provide paid sick 

leave to employees that otherwise meets the requirements of 

the EPSLA, as amended for purposes of the ARP, and/or 

provide paid family leave to employees that otherwise meets 

the requirements under the Expanded FMLA, as amended 

for purposes of the ARP, for qualified sick and family leave 

compensation for leave taken after March 31, 2021, and 

before October 1, 2021. For purposes of this credit, qualified 

sick leave compensation and qualified family leave 

compensation are compensation determined without regard 

to the exclusions from the definition of compensation under 

section 3231(e)(1), that an employer pays that otherwise 

meet the requirements of the EPSLA or Expanded FMLA, as 

enacted under the FFCRA and amended for purposes of the 

ARP. Enter the nonrefundable portion of the credit for 

qualified sick and family leave compensation from Worksheet 

2, Step 2, line 2p.

The credit for qualified sick and family leave compensation 

consists of the:

• Qualified sick leave compensation and/or qualified family 

leave compensation;

• Qualified health plan expenses allocable to qualified sick 

and family leave compensation;

• Collectively bargained defined benefit pension plan 

contributions, subject to the qualified leave compensation 

limitations, allocable to the qualified sick and family leave 

compensation;

• Collectively bargained apprenticeship program 

contributions, subject to the qualified leave compensation 

limitations, allocable to the qualified sick and family leave 

compensation; and

• Tier 1 Employer tax and Tier 1 Employer Medicare tax 

allocable to the qualified sick and family leave compensation.

The nonrefundable portion of the credit is limited to the 

Tier 1 Employer Medicare tax (line 2) and Tier 1 Employer 

Medicare tax—Sick pay (line 9). You can't claim the credit for 

leave taken after March 31, 2021, and before October 1, 

2021, if you made qualified sick or family leave compensation 

TIP

CAUTION

!

10 Instructions for Form CT-1 (2023)
available in a manner that discriminates in favor of highly 

compensated employees, full-time employees, or employees 

on the basis of employment tenure. See Highly compensated 

employee, later, for the definition.

For leave taken after March 31, 2021, and before October 

1, 2021, the credit for qualified sick and family leave 

compensation is reduced by the amount of the credit allowed 

under section 41 (for the credit for increasing research 

activities) with respect to compensation taken into account 

for determining the credit for qualified sick and family leave 

compensation; and any compensation taken into account in 

determining the credit for qualified sick and family leave 

compensation can't be taken into account as compensation 

for purposes of the credits under sections 45A, 45P, 45S, and 

51. For leave taken after March 31, 2021, and before October 

1, 2021, qualified compensation also doesn't include 

compensation that was used as payroll costs in connection 

with a Shuttered Venue Operator Grant under section 324 of 

the Economic Aid to Hard-Hit Small Businesses, Nonprofits, 

and Venues Act; or a restaurant revitalization grant under 

section 5003 of the ARP. Employers can receive both a Small 

Business Interruption Loan under the Paycheck Protection 

Program (PPP) and the credit for qualified sick and family 

leave compensation; however, employers can't receive both 

loan forgiveness and a credit for the same compensation. 

The same compensation can't be treated as both qualified 

sick leave compensation and qualified family leave 

compensation.

Any credit in excess of the remaining amount of the Tier 1 

Employer Medicare tax (line 2) and Tier 1 Employer Medicare 

tax—Sick pay (line 9) is refundable and reported on Form 

CT-1, line 24b. 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 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, qualified health plan 

expenses don't include amounts that the employee paid for 

with after-tax contributions. For more information, go to 

IRS.gov/PLC.

Collectively bargained defined benefit pension plan 

contributions. For purposes of qualified sick and family 

leave compensation, collectively bargained defined benefit 

pension plan contributions are contributions for a calendar 

quarter:

• Paid or incurred by an employer on behalf of its employees 

to a defined benefit plan, as defined in section 414(j), which 

meets the requirements of section 401(a);

• Made based on a pension contribution rate; and

• Required to be made under the terms of a collective 

bargaining agreement in effect during the quarter.

Pension contribution rate. The pension contribution rate 

is the contribution rate that the employer is obligated to pay 

under the terms of a collective bargaining agreement to a 

defined benefit plan, as the rate is applied to contribution 

base units, as defined by section 4001(a)(11) of the 

Employee Retirement Income Security Act of 1974 (ERISA).

Allocation rules. The amount of collectively bargained 

defined benefit pension plan contributions allocated to 

qualified sick leave compensation and/or qualified family 

leave compensation during a quarter is the pension 

contribution rate (expressed as an hourly rate) multiplied by 

the number of hours qualified sick leave compensation 

and/or qualified family leave compensation was provided to 

employees covered under the collective bargaining 

agreement during the quarter.

Collectively bargained apprenticeship program contributions. For purposes of qualified sick and family leave 

compensation, collectively bargained apprenticeship 

program contributions are contributions for a calendar 

quarter:

• Paid or incurred by an employer on behalf of its employees 

to a registered apprenticeship program, which is an 

apprenticeship registered under the National Apprenticeship 

Act of August 16, 1937, and meets the standards of Federal 

Regulations under subpart A of Part 29 and Part 30 of title 29;

• Made based on an apprenticeship program contribution 

rate; and

• Required to be made under the terms of a collective 

bargaining agreement in effect during the quarter.

Apprenticeship program contribution rate. The 

apprenticeship program contribution rate is the contribution 

rate that the employer is obligated to pay under the terms of a 

collective bargaining agreement for benefits under a 

registered apprenticeship program, as the rate is applied to 

contribution base units, as defined by section 4001(a)(11) of 

ERISA.

Allocation rules. The amount of collectively bargained 

apprenticeship program contributions allocated to qualified 

sick leave compensation and/or qualified family leave 

compensation in a quarter is the apprenticeship program 

contribution rate (expressed as an hourly rate) multiplied by 

the number of hours qualified sick leave compensation 

and/or qualified family leave compensation was provided to 

employees covered under the collective bargaining 

agreement during the quarter.

Highly compensated employee. A highly compensated 

employee is an employee who meets either of the following 

tests.

1. The employee was a 5% owner at any time during the 

year or the preceding year.

2. The employee received more than $135,000 in pay for 

the preceding year.

You can choose to ignore test (2) if the employee wasn't 

also in the top 20% of employees when ranked by pay for the 

preceding year.

Line 18—Total Nonrefundable Credits

Add lines 16 and 17b. 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.

Instructions for Form CT-1 (2023) 11
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 2022 return.

Line 23—Refundable Portion of Credit 

for Qualified Sick and Family Leave 

Compensation for Leave Taken After 

March 31, 2020, and Before April 1, 

2021

Complete line 23 only if qualified sick leave 

compensation and/or qualified family leave 

compensation was paid in 2023 for leave taken after 

March 31, 2020, and before April 1, 2021.

Certain private employers with fewer than 500 employees 

that provide paid sick leave under the EPSLA and/or provide 

paid family leave under the Expanded FMLA are eligible to 

claim the credit for qualified sick and family leave 

compensation. 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 

qualified health plan expenses allocable to that 

compensation, 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.

Line 24b—Refundable Portion of 

Credit for Qualified Sick and Family 

Leave Compensation for Leave Taken 

After March 31, 2021, and Before 

October 1, 2021

Complete line 24b only if qualified sick leave 

compensation and/or qualified family leave 

compensation was paid in 2023 for leave taken after 

March 31, 2021, and before October 1, 2021.

Employers with fewer than 500 employees and certain 

governmental employers without regard to number of 

employees (except for the federal government and its 

agencies and instrumentalities unless described in section 

501(c)(1)) are entitled to a credit if they provide paid sick 

leave to employees that otherwise meets the requirements of 

the EPSLA, as amended for purposes of the ARP, and/or 

provide paid family leave to employees that otherwise meets 

the requirements under the Expanded FMLA, as amended 

for purposes of the ARP, for leave taken after March 31, 2021, 

and before October 1, 2021. Enter the refundable portion of 

the credit for qualified sick and family leave compensation 

from Worksheet 2, Step 2, line 2q. The refundable portion of 

the credit is allowed after the Tier 1 employer Medicare taxes 

from lines 2 and 9 are reduced to zero by nonrefundable 

credits.

Line 25—Total Deposits and 

Refundable Credits

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

CAUTION

!

CAUTION

!

Line 28—Balance Due

If line 19 is more than line 25, enter the difference on line 28. 

Otherwise, see the instructions for line 29, later. You don't 

have to pay if line 28 is under $1. Generally, you should have 

a balance due only if your total railroad retirement taxes 

based on compensation (line 19) 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 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.

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 

“2023” on your check or money order. Complete Form 

CT-1(V) and enclose with Form CT-1.

Line 29—Overpayment

If line 25 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.

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 on line 29, we may apply your overpayment to any past 

due tax account that is shown in our records under your EIN.

Lines 30–33 and Lines 36–41

The amounts entered on lines 30–33 and lines 36–41 are 

amounts that you use on the worksheets at the end of these 

instructions to figure certain credits. If you’re claiming these 

credits, you must enter the applicable amounts.

Complete lines 30–33 only if qualified sick leave 

compensation and/or qualified family leave 

compensation was paid in 2023 for leave taken after 

March 31, 2020, and before April 1, 2021.

Line 30—Qualified Sick Leave 

Compensation for Leave Taken After 

March 31, 2020, and Before April 1, 

2021

Enter the qualified sick leave compensation you paid in 2023 

to your employees for leave taken after March 31, 2020, and 

before April 1, 2021, including any qualified sick leave 

compensation that was above the Tier 1 compensation base 

and any qualified sick leave compensation excluded from the 

definition of compensation under section 3231(e)(1). 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 leave taken 

after March 31, 2020, and before April 1, 2021. For more 

information about qualified sick leave compensation, go to 

IRS.gov/PLC.

CAUTION

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12 Instructions for Form CT-1 (2023)
Line 31—Qualified Health Plan 

Expenses Allocable to Compensation 

Reported on Line 30

Enter the qualified health plan expenses allocable to qualified 

sick leave compensation paid in 2023 for leave taken after 

March 31, 2020, and before April 1, 2021. This amount is 

also entered on Worksheet 1, Step 2, line 2b.

Line 32—Qualified Family Leave 

Compensation for Leave Taken After 

March 31, 2020, and Before April 1, 

2021

Enter the qualified family leave compensation you paid in 

2023 to your employees for leave taken after March 31, 2020, 

and before April 1, 2021, including any qualified family leave 

compensation that was above the Tier 1 compensation base 

and any qualified family leave compensation excluded from 

the definition of compensation under section 3231(e)(1). 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 leave taken 

after March 31, 2020, and before April 1, 2021. For more 

information about qualified family leave compensation, go to 

IRS.gov/PLC.

Line 33—Qualified Health Plan 

Expenses Allocable to Compensation 

Reported on Line 32

Enter the qualified health plan expenses allocable to qualified 

family leave compensation paid in 2023 for leave taken after 

March 31, 2020, and before April 1, 2021. This amount is 

also entered on Worksheet 1, Step 2, line 2f.

Complete lines 36, 37, and 38 only if qualified sick 

leave compensation was paid in 2023 for leave taken 

after March 31, 2021, and before October 1, 2021.

Line 36—Qualified Sick Leave 

Compensation for Leave Taken After 

March 31, 2021, and Before October 

1, 2021

Enter the qualified sick leave compensation you paid in 2023 

to your employees for leave taken after March 31, 2021, and 

before October 1, 2021, including any qualified sick leave 

compensation that was above the Tier 1 compensation base 

and any qualified sick leave compensation excluded from the 

definition of compensation under section 3231(e)(1). See the 

instructions for line 17b, earlier, for more information about 

qualified sick leave compensation for leave taken after March 

31, 2021, and before October 1, 2021. This amount is also 

entered on Worksheet 2, Step 2, line 2a.

Line 37—Qualified Health Plan 

Expenses Allocable to Qualified Sick 

Leave Compensation Reported on 

Line 36

Enter the qualified health plan expenses allocable to qualified 

sick leave compensation paid in 2023 for leave taken after 

CAUTION

!

March 31, 2021, and before October 1, 2021. This amount is 

also entered on Worksheet 2, Step 2, line 2b.

Line 38—Amounts Under Certain 

Collectively Bargained Agreements 

Allocable to Qualified Sick Leave 

Compensation Reported on Line 36

Enter the collectively bargained defined benefit pension plan 

contributions and collectively bargained apprenticeship 

program contributions allocable to qualified sick leave 

compensation paid in 2023 for leave taken after March 31, 

2021, and before October 1, 2021. This amount is also 

entered on Worksheet 2, Step 2, line 2c.

Complete lines 39, 40, and 41 only if qualified family 

leave compensation was paid in 2023 for leave taken 

after March 31, 2021, and before October 1, 2021.

Line 39—Qualified Family Leave 

Compensation for Leave Taken After 

March 31, 2021, and Before October 

1, 2021

Enter the qualified family leave compensation you paid in 

2023 to your employees for leave taken after March 31, 2021, 

and before October 1, 2021, including any qualified family 

leave compensation that was above the Tier 1 compensation 

base and any qualified family leave compensation excluded 

from the definition of compensation under section 3231(e)(1). 

See the instructions for line 17b, earlier, for more information 

about qualified family leave compensation for leave taken 

after March 31, 2021, and before October 1, 2021. This 

amount is also entered on Worksheet 2, Step 2, line 2g.

Line 40—Qualified Health Plan 

Expenses Allocable to Qualified 

Family Leave Compensation Reported 

on Line 39

Enter the qualified health plan expenses allocable to qualified 

family leave compensation paid in 2023 for leave taken after 

March 31, 2021, and before October 1, 2021. This amount is 

also entered on Worksheet 2, Step 2, line 2h.

Line 41—Amounts Under Certain 

Collectively Bargained Agreements 

Allocable to Qualified Family Leave 

Compensation Reported on Line 39

Enter the collectively bargained defined benefit pension plan 

contributions and collectively bargained apprenticeship 

program contributions allocable to qualified family leave 

compensation paid in 2023 for leave taken after March 31, 

2021, and before October 1, 2021. This amount is also 

entered on Worksheet 2, Step 2, line 2i.

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 19 is less than $2,500, don't 

complete Part II or Form 945-A.

CAUTION

!

Instructions for Form CT-1 (2023) 13
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.

Adjusting tax liability for nonrefundable credits claimed 

on lines 16 and 17b. Monthly schedule depositors and 

semiweekly schedule depositors must account for 

nonrefundable credits claimed on lines 16 and 17b 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 for leave taken after March 

31, 2020, and before April 1, 2021 (line 16). The 

nonrefundable portion of the credit for qualified sick and 

family leave compensation paid in 2023 for leave taken after 

March 31, 2020, and before April 1, 2021, 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 

paid in 2023 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 paid in 2023 for 

leave taken after March 31, 2020, and before April 1, 2021, 

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.

Example. Maple Co. is a monthly schedule depositor that 

pays employees every Friday. In 2023, Maple Co. had pay 

dates every Friday starting on January 6, 2023. Maple Co. 

paid qualified sick and family leave compensation on March 

10 and March 17 for leave taken after March 31, 2020, and 

before April 1, 2021. 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 6 pay date, but not below zero. If 

any nonrefundable portion of the credit remains, Maple Co. 

applies it to the liability for the January 13 pay date, then the 

January 20 pay date, and so forth until the entire $3,000 is 

used.

Nonrefundable portion of credit for qualified sick and 

family leave compensation for leave taken after March 

31, 2021, and before October 1, 2021 (line 17b). The 

nonrefundable portion of the credit for qualified sick and 

family leave compensation paid in 2023 for leave taken after 

March 31, 2021, and before October 1, 2021, is limited to the 

Tier 1 employer Medicare tax reported on Form CT-1, lines 2 

and 9, on compensation paid during 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 paid in 2023 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 paid in 2023 for leave taken after March 31, 

2021, and before October 1, 2021, that is remaining at the 

end of the year because it exceeds the Tier 1 employer 

Medicare tax reported on Form CT-1, lines 2 and 9, is 

claimed on line 24b 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 

nonrefundable and refundable portions of the credit 

for qualified sick and family leave compensation, as 

discussed earlier under Reducing your deposits for the credit 

for qualified sick and family leave compensation.

The amount shown on line V must equal the amount 

shown on line 19.

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. For more information, 

including an example, see frequently asked question 17 at 

IRS.gov/ETD.

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, 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, vice 

president, or other principal officer duly authorized to sign.

TIP

CAUTION

!

14 Instructions for Form CT-1 (2023)
• 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 (2023) 15
Worksheet 1. Credit for Qualified Sick and Family Leave 

Compensation Paid in 2023 for Leave Taken After March 31, 2020, 

and Before April 1, 2021 Keep for Your Records

Determine how you will complete this worksheet

If you paid qualified sick leave compensation and/or qualified family leave compensation for leave taken after March 31, 2020, and before April 1, 

2021, complete Step 1 and Step 2. Caution: Use Worksheet 2 to figure the credit for qualified sick and family leave compensation paid in 2023 

for leave taken after March 31, 2021, and before October 1, 2021.

Step 1. Figure the Tier 1 Employer Tax

1a Enter the amount from Form CT-1, line 1 (Tax Column) ....................... 1a

1b Enter the amount from Form CT-1, line 8 (Tax Column) ....................... 1b

1c Tier 1 Employer tax. Add lines 1a and 1b ................................ 1c

Step 2. Figure the credit for qualified sick and family leave compensation

2a Qualified sick leave compensation reported on Form CT-1, line 30 ............... 2a

2a(i) Enter the amount, if any, included on line 2a that is compensation excluded from the 

definition of compensation under section 3231(e)(1) ......................... 2a(i)

2a(ii) Subtract line 2a(i) from line 2a .......................................... 2a(ii)

2b Qualified health plan expenses allocable to qualified sick leave compensation reported 

on Form CT-1, line 31 ................................................ 2b

2c Tier 1 Employer Medicare tax on qualified sick leave compensation. Multiply line 2a(ii) 

by 1.45% (0.0145) ................................................... 2c

2d Credit for qualified sick leave compensation. Add lines 2a, 2b, and 2c ......... 2d

2e Qualified family leave compensation reported on Form CT-1, line 32 ............. 2e

2e(i) Enter the amount, if any, included on line 2e that is compensation excluded from the 

definition of compensation under section 3231(e)(1) .........................

2e(i)

2e(ii) Subtract line 2e(i) from line 2e .......................................... 2e(ii)

2f Qualified health plan expenses allocable to qualified family leave compensation 

reported on Form CT-1, line 33 ......................................... 2f

2g Tier 1 Employer Medicare tax on qualified family leave compensation. Multiply 

line 2e(ii) by 1.45% (0.0145) ........................................... 2g

2h Credit for qualified family leave compensation. Add lines 2e, 2f, and 2g ....... 2h

2i Credit for qualified sick and family leave compensation. Add lines 2d 

and 2h ........................................................... 2i

2j Nonrefundable portion of credit for qualified sick and family leave 

compensation for leave taken after March 31, 2020, and before April 1, 2021.

Enter the smaller of line 1c or line 2i. Enter this amount on Form CT-1, line 16 ...... 2j

2k Refundable portion of credit for qualified sick and family leave compensation 

for leave taken after March 31, 2020, and before April 1, 2021. Subtract line 2j 

from line 2i and enter this amount on Form CT-1, line 23 ...................... 2k

16 Instructions for Form CT-1 (2023)
Worksheet 2. Credit for Qualified Sick and Family Leave 

Compensation Paid in 2023 for Leave Taken After March 31, 2021, 

and Before October 1, 2021 Keep for Your Records

Determine how you will complete this worksheet. 

If you paid qualified sick leave compensation and/or qualified family leave compensation for leave taken after March 31, 2021, and before October 1, 

2021, complete Step 1 and Step 2. Caution: Use Worksheet 1 to figure the credit for qualified sick and family leave compensation paid in 2023 for leave 

taken after March 31, 2020, and before April 1, 2021.

Step 1. Figure the Tier 1 Employer Medicare Tax

1a Enter the amount from Form CT-1, line 2 (Tax Column) ......................... 1a

1b Enter the amount from Form CT-1, line 9 (Tax Column) ......................... 1b

1c Tier 1 Employer Medicare tax. Add lines 1a and 1b .......................... 1c

Step 2. Figure the credit for qualified sick and family leave compensation

2a Qualified sick leave compensation for leave taken after March 31, 2021, and before 

October 1, 2021 (Form CT-1, line 36) ...................................... 2a

2a(i) Enter the amount, if any, included on line 2a that is compensation excluded from the 

definition of compensation under section 3231(e)(1) ........................... 2a(i)

2a(ii) Subtract line 2a(i) from line 2a ........................................... 2a(ii)

2a(iii) Enter the amount, if any, included on line 2a that was not included as compensation on 

Form CT-1, lines 1, 4, 8, and 10, because the qualified sick leave compensation was 

limited by the Tier 1 compensation base .................................... 2a(iii)

2a(iv) Subtract line 2a(iii) from line 2a(ii) ........................................ 2a(iv)

2b Qualified health plan expenses allocable to qualified sick leave compensation taken after 

March 31, 2021, and before October 1, 2021 (Form CT-1, line 37) ................. 2b

2c Amounts under certain collectively bargained agreements allocable to qualified sick leave 

compensation for leave taken after March 31, 2021, and before October 1, 2021 (Form 

CT-1, line 38) ....................................................... 2c

2d Tier 1 Employer tax on qualified sick leave compensation. Multiply line 2a(iv) by 6.2% 

(0.062) ........................................................... 2d

2e Tier 1 Employer Medicare tax on qualified sick leave compensation. Multiply line 2a(ii) by 

1.45% (0.0145) ..................................................... 2e

2f Credit for qualified sick leave compensation. Add lines 2a, 2b, 2c, 2d, and 2e ...... 2f

2g Qualified family leave compensation for leave taken after March 31, 2021, and before 

October 1, 2021 (Form CT-1, line 39) ...................................... 2g

2g(i) Enter the amount, if any, included on line 2g that is compensation excluded from the 

definition of compensation under section 3231(e)(1) ........................... 2g(i)

2g(ii) Subtract line 2g(i) from line 2g .......................................... 2g(ii)

2g(iii) Enter the amount, if any, included on line 2g that was not included as compensation on 

Form CT-1, lines 1, 4, 8, and 10, because the qualified family leave compensation was 

limited by the Tier 1 compensation base .................................... 2g(iii)

2g(iv) Subtract line 2g(iii) from line 2g(ii) ........................................ 2g(iv)

2h Qualified health plan expenses allocable to qualified family leave compensation taken after 

March 31, 2021, and before October 1, 2021 (Form CT-1, line 40) ................. 2h

2i Amounts under certain collectively bargained agreements allocable to qualified family 

leave compensation for leave taken after March 31, 2021, and before October 1, 2021 

(Form CT-1, line 41) .................................................. 2i

2j Tier 1 Employer tax on qualified family leave compensation. Multiply line 2g(iv) by 6.2% 

(0.062) ........................................................... 2j

2k Tier 1 Employer Medicare tax on qualified family leave compensation. Multiply line 2g(ii) by 

1.45% (0.0145) ..................................................... 2k

2l Credit for qualified family leave compensation. Add lines 2g, 2h, 2i, 2j, and 2k ..... 2l

2m Credit for qualified sick and family leave compensation. Add lines 2f and 2l ....... 2m

2n Enter any credit claimed under section 41 for increasing research activities with respect to 

any compensation taken into account for the credit for qualified sick and family leave 

compensation ...................................................... 2n

2o Credit for qualified sick and family leave compensation after adjusting for other 

credits. Subtract line 2n from line 2m ..................................... 2o

2p Nonrefundable portion of credit for qualified sick and family leave compensation 

for leave taken after March 31, 2021, and before October 1, 2021. Enter the smaller of 

line 1c or line 2o. Enter this amount on Form CT-1, line 17b ...................... 2p

2q Refundable portion of credit for qualified sick and family leave compensation for 

leave taken after March 31, 2021, and before October 1, 2021. Subtract line 2p from 

line 2o and enter this amount on Form CT-1, line 24b .......................... 2q

Instructions for Form CT-1 (2023) 17