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                                                                                                              Department of the Treasury
                                                                                                              Internal Revenue Service
2023

Instructions for Form CT-1

Employer's Annual Railroad Retirement Tax Return

Section references are to the Internal Revenue Code unless                    coverage beginning on or before September 30, 2021. A 
otherwise noted.                                                              premium payee was entitled to the COBRA premium 
                                                                              assistance credit at the time an eligible individual elected 
Contents                                                               Page
                                                                              coverage. Therefore, due to the COBRA notice and election 
Future Developments      . . . . . . . . . . . . . . . . . . . . . . . .   1  period requirements (generally, employers had 60 days to 
What's New   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1  provide notice and assistance eligible individuals had 60 
Reminders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1  days to elect coverage), the first quarter of 2022 was the last 
General Instructions   . . . . . . . . . . . . . . . . . . . . . . . . .   2  quarter in which most employers may have been eligible to 
Purpose of Form CT-1 . . . . . . . . . . . . . . . . . . . . .             2  claim the COBRA premium assistance credit.

Who Must File        . . . . . . . . . . . . . . . . . . . . . . . . . .   2  Reminders
Where To File . . . . . . . . . . . . . . . . . . . . . . . . . . .        3
                                                                              The COVID-19 related credit for qualified sick and family 
When To File       . . . . . . . . . . . . . . . . . . . . . . . . . . .   3  leave compensation is limited to leave taken after March 
Definitions    . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3  31, 2020, and before October 1, 2021.   Generally, the 
Employer and Employee Taxes                  . . . . . . . . . . . . . .   4  credit for qualified sick and family leave compensation, as 
Depositing Taxes         . . . . . . . . . . . . . . . . . . . . . . . .   4  enacted under the Families First Coronavirus Response Act 
                                                                              (FFCRA) and amended and extended by the COVID-related 
Penalties and Interest         . . . . . . . . . . . . . . . . . . . . .   6
                                                                              Tax Relief Act of 2020, for leave taken after March 31, 2020, 
Specific Instructions  . . . . . . . . . . . . . . . . . . . . . . . . .   7  and before April 1, 2021, and the credit for qualified sick and 
Third-Party Designee     . . . . . . . . . . . . . . . . . . . . . . .     14 family leave compensation under sections 3131, 3132, and 
Who Must Sign . . . . . . . . . . . . . . . . . . . . . . . . . . . .      14 3133 of the Internal Revenue Code, as enacted under the 
Paid Preparer Use Only . . . . . . . . . . . . . . . . . . . . . .         15 ARP, for leave taken after March 31, 2021, and before 
                                                                              October 1, 2021, have expired. However, employers that pay 
Worksheet 1. Credit for Qualified Sick and Family                             qualified sick and family leave compensation in 2023 for 
Leave Compensation Paid in 2023 for Leave                                     leave taken after March 31, 2020, and before October 1, 
Taken After March 31, 2020, and Before April                                  2021, are eligible to claim a credit on Form CT-1 filed for 
1, 2021      . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16 2023. For more information, see the instructions for line 16, 
Worksheet 2. Credit for Qualified Sick and Family                             line 17b line 23, , and line 24b, later.
Leave Compensation Paid in 2023 for Leave                                     Use Worksheet 1 to figure the credit for leave taken after 
Taken After March 31, 2021, and Before                                        March 31, 2020, and before April 1, 2021. Use Worksheet 2 
October 1, 2021 . . . . . . . . . . . . . . . . . . . . . . . .            17 to figure the credit for leave taken after March 31, 2021, and 
                                                                              before October 1, 2021. For more information about the 
Future Developments                                                           credit for qualified sick and family leave compensation, go to 
For the latest information about developments related to                      IRS.gov/PLC.
Form CT-1 and its instructions, such as legislation enacted 
after they were published, go to IRS.gov/CT1.                                 Advance payment of COVID-19 credits ended.    Although 
                                                                              you may pay qualified sick and family leave compensation in 
What's New                                                                    2023 for leave taken after March 31, 2020, and before 
                                                                              October 1, 2021, you may no longer request an advance 
Changes to tax rates and compensation bases.                     For the      payment of any credit on Form 7200, Advance Payment of 
2023 tax rates and compensation bases, see             Employer and           Employer Credits Due to COVID-19.
Employee Taxes, later.
                                                                              Outsourcing payroll duties.     Generally, as an employer, 
Credit for COBRA premium assistance payments.                        The      you’re responsible to ensure that tax returns are filed and 
COBRA premium assistance credit lines have been                               deposits and payments are made, even if you contract with a 
"Reserved for future use" on Form CT-1 because the first                      third party to perform these acts. You remain responsible if 
quarter of 2022 was the last quarter in which most employers                  the third party fails to perform any required action. Before you 
may have been eligible to claim the COBRA premium                             choose to outsource any of your payroll and related tax duties 
assistance credit.                                                            (that is, withholding, reporting, and paying over income taxes 
Section 9501 of the American Rescue Plan Act of 2021                          and taxes imposed by the Railroad Retirement Tax Act) to a 
(the ARP) provided for COBRA premium assistance in the                        third-party payer, such as a payroll service provider or 
form of a full reduction in the premium otherwise payable by                  reporting agent, go to IRS.gov/OutsourcingPayrollDuties for 
certain individuals and their families who elected COBRA                      helpful information on this topic. For more information on the 
continuation coverage due to a loss of coverage as the result                 different types of third-party payer arrangements, see section 
of a reduction in hours or an involuntary termination of                      16 of Pub. 15.
employment (assistance eligible individuals). This COBRA 
                                                                              Correcting a previously filed Form CT-1. If you discover 
premium assistance was available for periods of coverage 
                                                                              an error on a previously filed Form CT-1, make the correction 
beginning on or after April 1, 2021, through periods of 
                                                                              using Form CT-1 X. Form CT-1 X is filed separately from 

Sep 26, 2023                                                           Cat. No. 16005H

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Form CT-1. For more information, see the Instructions for and calling 1-800-THE-LOST (1-800-843-5678) if you
Form CT-1 X or go to IRS.gov/CorrectingEmploymentTaxes. recognize a child.
Change of address. Use Form 8822-B to notify the IRS of
an address change. General Instructions
Federal tax deposits must be made by electronic funds
transfer (EFT). You must use EFT to make all federal tax Purpose of Form CT-1
deposits. Generally, an EFT is made using the Electronic These instructions give you some background information
Federal Tax Payment System (EFTPS). If you don't want to about Form CT-1. They tell you who must file Form CT-1, how
use EFTPS, you can arrange for your tax professional, to complete it line by line, and when and where to file it.
financial institution, payroll service, or other trusted third party Use Form CT-1 to report taxes imposed by the Railroad
to make electronic deposits on your behalf. Also, you may Retirement Tax Act (RRTA). Use Form 941, Employer's
arrange for your financial institution to initiate a same-day QUARTERLY Federal Tax Return, or, if applicable, Form 944,
wire payment on your behalf. EFTPS is a free service Employer's ANNUAL Federal Tax Return, to report federal
provided by the Department of the Treasury. Services income taxes withheld from your employees' wages and
provided by your tax professional, financial institution, payroll other compensation.
service, or other third party may have a fee.
To get more information about EFTPS or to enroll in In accordance with Notice 2021-24, 2021-18 I.R.B. 1122,
EFTPS, go to EFTPS.gov or call 800-555-4477. To contact available at IRS.gov/irb/2021-18_IRB#NOT-2021-24, you
EFTPS using TRS for people who are deaf, hard of hearing, may have reduced deposits of employment taxes otherwise
or have a speech disability, dial 711 and then provide the required to be made that are reported on Form 941
TRS assistant the 800-555-4477 number above or (generally, income tax withholding) in anticipation of claiming
800-733-4829. Additional information about EFTPS is also the credit for qualified sick and family leave compensation
available in Pub. 966. paid in 2023 for leave taken after March 31, 2020, and before
October 1, 2021. For more information about qualified sick
Paid preparers. If you use a paid preparer to complete and family leave compensation, see the line 1 instructions,
Form CT-1, the paid preparer must complete and sign the later. For more information about this credit, see the line 16
paid preparer's section of Form CT-1. and line 17b instructions, later. Because this credit is
Additional information. For more information, see one of reported when the 2023 Form CT-1 is filed in 2024, a
the resources discussed next. reduction in deposits of income tax withholding as described
above may have resulted in the issuance of a balance due
• Pub. 15 contains information for withholding, depositing,
notice and the imposition of penalties and interest when the
reporting, and paying over employment taxes.
Form 941 quarterly return was processed.
• Pub. 15-A contains specialized and detailed employment
tax information supplementing the basic information provided If you reduced your deposits of employment taxes
in Pub. 15. reported on Form 941 in anticipation of the credit for qualified
• Pub. 15-B contains information about the employment tax sick and family leave compensation paid in 2023 for leave
treatment of various types of noncash compensation. taken after March 31, 2020, and before October 1, 2021, and
• Pub. 915 contains the federal income tax rules for social this resulted in those amounts being included as a balance
security benefits and equivalent Tier 1 railroad retirement due in a notice, contact us as soon as possible by either (1)
benefits. writing to the address shown on your notice, or (2) calling the
• The Railroad Retirement Board (RRB) website at RRB.gov telephone number shown on your notice. If you contact us in
contains additional employer reporting information and writing, include a copy of your notice and the amount of
instructions. employment tax deposits reported on Form 941 that you
How to get forms and publications. You can download or reduced in anticipation of the credit for qualified sick and
print most of the forms and publications you may need at family leave compensation paid in 2023 for leave taken after
IRS.gov/Forms. Otherwise, you can go to IRS.gov/ March 31, 2020, and before October 1, 2021. Whether you
OrderForms to place an order and have forms mailed to you. owe tax, penalties, and interest will depend upon the credits
The IRS will process your order as soon as possible. Don't properly claimed on Form CT-1.
resubmit requests you've already sent us. You can get forms
and publications faster online. Who Must File
Where can you get telephone help? You can call the IRS For purposes of these instructions, all references to
Business and Specialty Tax Line at 800-829-4933 or TIP "sick pay" mean ordinary sick pay, not “qualified sick
800-829-4059 (TDD/TTY for persons who are deaf, hard of leave compensation.”
hearing, or have a speech disability) Monday–Friday from File Form CT-1 if you paid one or more employees
7:00 a.m. to 7:00 p.m. local time (Alaska and Hawaii follow compensation subject to tax under RRTA.
Pacific time) for answers to your questions about completing
Form CT-1 or tax deposit rules. 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
Photographs of Missing Children taxes. Include sick pay payments on lines 8–11 and, if the
The IRS is a proud partner with the National Center for withholding threshold is met, line 12 of Form CT-1. Follow the
Missing & Exploited Children® (NCMEC). Photographs of reporting procedures for sick pay reporting in section 6 of
missing children selected by the Center may appear in Pub. 15-A.
instructions on pages that would otherwise be blank. You can If a third-party payer of sick pay is also paying qualified
help bring these children home by looking at the photographs sick leave compensation on behalf of an employer, the third
party would be making the payments as an agent of the

2 Instructions for Form CT-1 (2023)

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employer. The employer is required to do the reporting and Timing. Compensation is considered paid when it is actually
payment of railroad retirement taxes with respect to the paid or when it is constructively paid. It is constructively paid
qualified sick leave compensation and claim the credit for the when it is set apart for the employee, or credited to an
qualified sick leave compensation unless the employer has account the employee can control, without any substantial
an agency agreement with the third-party payer that requires limit or condition on how and when the payment is to be
the third-party payer to do the collecting, reporting, and/or made.
paying or depositing railroad retirement taxes on the qualified
sick leave compensation. If the employer has an agency Any compensation paid during the current year that was
agreement with the third-party payer, the third-party payer earned in a prior year is taxable at the current year's tax
includes the qualified sick leave compensation on the Form rates; you must include the compensation with the current
CT-1 filed by the third party and claims the sick leave credit year's compensation on Form CT-1, lines 1–12, as
on behalf of the employer on Form CT-1. appropriate. An exception applies to nonqualified deferred
compensation that was subject to Tier 1 and Tier 2 tax in a
After you file your first Form CT-1, you must file a return for prior year. See the rules for nonqualified deferred
each year, even if you didn’t pay taxable compensation compensation plans in section 5 of Pub. 15-A.
during the year, until you file a final return.
Exceptions. Compensation doesn't include the following.
Disregarded entities and qualified subchapter S subsid- • Certain benefits provided to or on behalf of an employee if
iaries (QSubs). Eligible single-owner disregarded entities at the time the benefits are provided it is reasonable to
and QSubs are treated as separate entities for employment believe the employee can exclude such benefits from
tax purposes. Eligible single-member entities that haven’t income. For information on what benefits are excludable, see
elected to be taxed as corporations must report and pay Pub. 15-B. Examples of this type of benefit include:
employment taxes on compensation paid to their employees 1. Certain employee achievement awards under section
using the entities' own names and employer identification 74(c),
numbers (EINs). See Regulations sections 1.1361-4(a)(7)
and 301.7701-2(c)(2)(iv). 2. Certain scholarship and fellowship grants under
section 117,
Where To File 3. Certain fringe benefits under section 132, and
Send Form CT-1 to: 4. Employer payments to an Archer MSA under section
220 or health savings accounts (HSAs) under section 223.
Department of the Treasury • Stock or stock options.
Internal Revenue Service Center • Payments made specifically for traveling or other bona fide
Kansas City, MO 64999-0048 and necessary expenses that meet the rules in the
regulations under section 62.
When To File • Payments for services performed by a nonresident alien
temporarily present in the United States as a nonimmigrant
File Form CT-1 by February 29, 2024. under subparagraphs (F), (J), (M), or (Q) of the Immigration
Definitions and Nationality Act.
• Compensation under $25 earned in any month by an
The terms “employer” and “employee” used in these employee in the service of a local lodge or division of a
instructions are defined in section 3231 and in its regulations. railway-labor-organization employer.
Compensation Exceptions for sickness or accident disability
payments. For purposes of employee and employer Tier 1
Compensation means payment in money, meaning currency taxes, compensation doesn't include sickness or accident
issued by a recognized authority as a medium of exchange, disability payments made to or on behalf of an employee or
for services performed as an employee of one or more dependents:
employers. It includes payment for time lost as an employee. • Under a workers' compensation law,
A few exceptions are described later under Exceptions. • Under section 2(a) of the Railroad Unemployment
Group-term life insurance. Include in compensation the Insurance Act for days of sickness due to an on-the-job injury,
cost of group-term life insurance over $50,000 you provide to • Under the Railroad Retirement Act, or
an employee. This amount is subject to Tier 1 and Tier 2 • More than 6 months after the calendar month the
taxes, but not to federal income tax withholding. Include this employee last worked.
amount on your employee's Form W-2, Wage and Tax For purposes of Tier 2 taxes, compensation doesn't
Statement. include payments made to or on behalf of an employee or
Former employees for whom you paid the cost of dependents under a sickness or accident disability plan or a
group-term life insurance over $50,000 must pay the medical or hospitalization plan in connection with sickness or
employee's share of these taxes with their Form 1040, U.S. accident disability.
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.

Instructions for Form CT-1 (2023) 3

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Employer and Employee Taxes Tips. Your employee must report cash tips to you by the 10th
day of the month following the month the tips are received.
Tax Rates and Compensation Bases The report should include charged tips you paid over to the
employee for charge customers, tips the employee received
Tax Rates Compensation directly from customers, and tips received from other
Paid in 2023 employees under any tip-sharing arrangement. Both directly
Tier 1 and indirectly tipped employees must report tips to you. Cash
tips must be reported for every month, unless the cash tips
Employer and Employee: Each pay 6.2% for the month are less than $20. Stop collecting the Tier 1
of first . . . . . . . . . . . . . . . . . . . . . . . . . . . $160,200 Employee tax when the employee’s compensation and tips
Tier 1 Medicare for tax year 2023 reach $160,200. Collect the Tier 1
Employer and Employee: Each pay 1.45% of . . All Employee Medicare tax for the whole year on all
Tier 1 Employee Additional Medicare Tax compensation and tips. Collect the Tier 1 Employee
withholding Additional Medicare Tax withholding on compensation and
tips that exceed $200,000 for the calendar year.
Employee: Pays 0.9% on
compensation exceeding . . . . . . . . . . . . . $200,000 An employee must furnish you with a written (or electronic)
statement of cash tips, signed by the employee, showing (a)
Tier 2 their name, address, and social security number; (b) your
Employer: Pays 13.1% of first . . . . . . . . . . . . $118,800 name and address; (c) the month or period for which the
Employee: Pays 4.9% of first . . . . . . . . . . . . $118,800 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.
Employer Taxes Tips are considered to be paid at the time the employee
Employers must pay both Tier 1 and Tier 2 taxes, except for reports them to you. You must collect both employee railroad
the Tier 1 Employer tax (line 1) on qualified sick and family retirement tax and federal income tax on cash tips reported to
leave compensation for leave taken after March 31, 2020, you from the employee's compensation (after withholding
and before April 1, 2021, and the Tier 1 Employee Additional employee railroad retirement and federal income tax related
Medicare Tax. Tier 1 tax is divided into two parts. The amount to the nontip compensation) or from other funds the
of compensation subject to each tax is different. See the employee makes available. Apply the compensation or other
table above for the 2023 tax rates and compensation bases. funds first to the railroad retirement tax and then to federal
Concurrent employment. If two or more related income tax. You don't have to pay employer railroad
corporations that are rail employers employ the same retirement taxes on tips.
individual at the same time and pay that individual through a If, by the 10th of the month after the month you received
common paymaster that is one of the corporations, the an employee's tip income report, you don't have enough
corporations are considered a single employer. They have to employee funds available to withhold the employee tax, you
pay, in total, no more in railroad retirement taxes than a single may report the excess amount without withholding the related
employer would. See Regulations section 31.3121(s)-1 for tax. Include the tips your employees report to you on lines 4,
more information. 5, 6, and 7, even if you were unable to withhold the
employee's share of tax. Then report the uncollected Tier 1
Successor employers. Successor employers should see
Employee tax, Tier 1 Employee Medicare tax, Tier 1
section 3231(e)(2)(C) and Pub. 15 to see if they can use the
Employee Additional Medicare Tax withholding, and Tier 2
predecessor's compensation paid against the maximum
Employee tax on tips on line 14. See section 6 of Pub. 15.
compensation bases.
Depositing Taxes
Employee Taxes
For Tier 1 and Tier 2 taxes, you’re either a monthly schedule
You must withhold the employee's part of Tier 1 and Tier 2 depositor or a semiweekly schedule depositor. However, see
taxes. See the table under Employer and Employee Taxes, the $2,500 Rule and the $100,000 Next-Day Deposit Rule
earlier, for the tax rates and compensation bases. See Tips, under Exceptions to the Deposit Rules, later. The terms
later, for information on the employee tax on tips. “monthly schedule depositor” and “semiweekly schedule
Withholding or payment of employee tax by employer. depositor” identify which set of rules you must follow when a
You must collect the employee railroad retirement tax from tax liability arises (for example, when you have a payday).
each employee by withholding it from employee They don't refer to how often your business pays its
compensation. If you don't withhold the employee tax, you employees or to how often you’re required to make deposits.
must still pay the tax. If you withhold too much or too little tax If you were a monthly schedule depositor for the entire
because you can't determine the correct amount, correct the year, complete the Monthly Summary of Railroad Retirement
amount withheld by an adjustment, credit, or refund Tax Liability in Part II of Form CT-1. If you were a semiweekly
according to the applicable regulations. schedule depositor during any part of the year or you
If you pay the railroad retirement tax for your employee accumulated $100,000 or more on any day during a deposit
rather than withholding it, the amount of the employee's period, you must complete Form 945-A, Annual Record of
compensation is increased by the amount of that tax. See Federal Tax Liability.
Rev. Proc. 83-43,1983-1 C.B. 778, for information on how to
figure and report the proper amounts. 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)

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calendar year. This is determined from the total taxes Semiweekly Schedule Depositor
reported on your Form CT-1 for the calendar year lookback
period. The lookback period is the second calendar year If you’re a semiweekly schedule depositor, use the table
preceding the current calendar year. For example, the below to determine when to make deposits.
lookback period for calendar year 2024 is calendar year
2022. Deposit Tier 1 and Tier 2 taxes No later than...
Use the table below to determine which deposit schedule for payments made on...
to follow for 2024. Wednesday, Thursday, and/or The following Wednesday
Friday
IF you reported taxes THEN for 2024 you’re a...
(Form CT-1, line 19) for the Saturday, Sunday, Monday, The following Friday
lookback period (2022) of... and/or Tuesday
$50,000 or less Monthly schedule depositor
More than $50,000 Semiweekly schedule depositor
Example. Green, Inc., a semiweekly schedule depositor,
pays compensation on the last Friday of each month.
Although Green, Inc., is a semiweekly schedule depositor,
Example. Rose Co. reported Form CT-1 taxes as follows. Green, Inc., will deposit just once a month because Green,
• 2022 Form CT-1, line 19—$49,000. Inc., pays compensation only once a month. The deposit,
• 2023 Form CT-1, line 19—$52,000. however, will be made under the semiweekly deposit
Rose Co. is a monthly schedule depositor for 2024 schedule as follows: Green, Inc.’s taxes for the April 26, 2024
because its Form CT-1 taxes for its lookback period (Friday), payday must be deposited by May 1, 2024
(calendar year 2022) weren't more than $50,000. However, (Wednesday). Under the semiweekly deposit rule, taxes
for 2025, Rose Co. is a semiweekly schedule depositor arising on Wednesday through Friday must be deposited by
because the total taxes exceeded $50,000 for its lookback the following Wednesday.
period (calendar year 2023). The last day of the calendar year ends the
New employer. If you’re a new employer, your taxes for both ! semiweekly deposit period and begins a new one.
CAUTION
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 Deposits Due on Business Days Only
Next-Day Deposit Rule, later.
Adjustments and the lookback rule. To determine the If a deposit is required to be made on a day that isn't a
amount of taxes paid for the lookback period, use only the business day, the deposit is considered to have been made
Form CT-1 taxes reported on your original return. timely if it is made by the close of the next business day. A
Adjustments to a return for a prior period aren't taken into business day is any day other than a Saturday, Sunday, or
account in determining the taxes for that prior period. legal holiday. For example, if a deposit is due on a Friday and
Example. Maple Co. originally reported Form CT-1 taxes Friday is a legal holiday, the deposit will be considered timely
of $45,000 for the lookback period (2022). Maple Co. if it is made by the following Monday (if that Monday is a
discovered in March 2024 that the tax during the lookback business day). The term “legal holiday” for deposit purposes
period (2022) was understated by $10,000 and will correct includes only those legal holidays in the District of Columbia.
this error with an adjustment on Form CT-1 X filed for 2022. For a list of legal holidays, see section 11 of Pub. 15.

Maple Co. is a monthly schedule depositor for 2024 Semiweekly schedule depositors will always have at least
because the lookback period Form CT-1 taxes are based on 3 business days following the close of the semiweekly period
the amount originally reported ($45,000), which wasn't more to make a deposit. If any of the 3 weekdays after the end of a
than $50,000. For purposes of the lookback rule, the $10,000 semiweekly period is a legal holiday, you have 1 additional
adjustment doesn't affect either 2022 taxes or 2024 taxes. day to deposit. For example, if you have Form CT-1 taxes
See Treasury Decision 9405, available at IRS.gov/irb/ accumulated for payments made on Friday and the following
2008-32_IRB#TD-9405. Monday is a legal holiday, the deposit normally due on
Wednesday may be made on Thursday (allowing 3 business
When To Deposit days to make the deposit).
Monthly Schedule Depositor
Exceptions to the Deposit Rules
If you’re a monthly schedule depositor, deposit employer and
employee Tier 1 and Tier 2 taxes accumulated during a
calendar month by the 15th day of the following month. The two exceptions that apply to the deposit rules are the:
Example. Spruce Co. is a monthly schedule depositor • $2,500 Rule, and
with seasonal employees. Spruce Co. paid compensation • $100,000 Next-Day Deposit Rule.
each Friday during January but didn't pay any compensation $2,500 Rule. If your total Form CT-1 taxes after adjustments
during February. Under the monthly schedule deposit rule, and nonrefundable credits (line 19) for the year are less than
Spruce Co. must deposit the combined taxes for the January $2,500 and the taxes are fully paid with a timely filed Form
paydays by February 15. Spruce Co. doesn't have a deposit CT-1, no deposits are required. However, if you’re unsure that
requirement for February (due by March 15) because no you will accumulate less than $2,500, deposit under the
compensation was paid and, therefore, Spruce Co. doesn't appropriate deposit rules so that you won't be subject to
have a tax liability for the month. deposit penalties.

Instructions for Form CT-1 (2023) 5

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$100,000 Next-Day Deposit Rule. If you accumulate line 16 and line 17b, later, for more information on this credit.
undeposited taxes of $100,000 or more on any day during a For more information on reducing deposits, see Notice 2020-
deposit period, you must deposit the taxes by the next 22, 2020-17 I.R.B. 664, available at IRS.gov/irb/
business day regardless of whether you’re a monthly or 2020-17_IRB#NOT-2020-22 and Notice 2021-24. See the
semiweekly schedule depositor. If you're a monthly schedule instructions for Part II, later, for instructions on how to adjust
depositor and accumulate a $100,000 tax liability on any day your tax liabilities reported on Part II or Form 945-A for
during the deposit period, you become a semiweekly nonrefundable credits.
schedule depositor on the next day and remain so for at least
the rest of the calendar year and for the following calendar Electronic Deposit Requirement
year. The $100,000 tax liability threshold requiring a next-day You must use EFT to make all federal tax deposits. Generally,
deposit is determined before you consider any reduction of an EFT is made using EFTPS. To get more information about
your liability for nonrefundable credits. For more information, EFTPS or to enroll in EFTPS, go to EFTPS.gov or call
including an example, see frequently asked question 17 at 800-555-4477. To contact EFTPS using TRS for people who
IRS.gov/ETD. are deaf, hard of hearing, or have a speech disability, dial 711
If you’re a monthly schedule depositor and you and then provide the TRS assistant the 800-555-4477
accumulate $100,000 or more on any day during the month, number above or 800-733-4829. Additional information about
you become a semiweekly schedule depositor on the next EFTPS is also available in Pub. 966.
day for the remainder of the calendar year and for the For an EFTPS deposit to be on time, you must submit
following year. ! the deposit by 8 p.m. Eastern time the day before the
Once a semiweekly schedule depositor accumulates CAUTION date the deposit is due.
$100,000 or more in a deposit period, it must stop
accumulating at the end of that day and begin to accumulate Same-day wire payment option. If you fail to submit a
anew on the next day. The following examples explain this deposit transaction on EFTPS by 8 p.m. Eastern time the day
rule. before the date a deposit is due, you can still make your
Example of $100,000 Next-Day Deposit Rule. deposit on time by using the Federal Tax Collection Service
Fir Co. is a semiweekly schedule depositor. On Monday, Fir (FTCS) to make a same-day wire payment. To use the
Co. accumulates taxes of $110,000 and must deposit this same-day wire payment method, you will need to make
amount by Tuesday, the next business day. On Tuesday, Fir arrangements with your financial institution ahead of time.
Co. accumulates additional taxes of $30,000. Because the Please check with your financial institution regarding
$30,000 isn't added to the previous $110,000, Fir Co. must availability, deadlines, and costs. Your financial institution
deposit the $30,000 by Friday using the semiweekly deposit may charge you a fee for payments made this way. To learn
schedule. more about the information you will need to give your
financial institution to make a same-day wire payment, go to
Example of $100,000 Next-Day Deposit Rule during
IRS.gov/SameDayWire.
the first year of business. Elm, Inc., started its business on
Monday, May 6, 2024. Because this was the first year of its Accuracy of Deposits Rule. You’re required to deposit
business, its Form CT-1 taxes for its lookback period (2022) 100% of your railroad retirement taxes on or before the
are considered to be zero, and Elm, Inc., is a monthly deposit due date. However, penalties won't be applied for
schedule depositor. On Wednesday, May 8, it paid depositing less than 100% if both of the following conditions
compensation for the first time and accumulated taxes of are met.
$40,000. On Friday, May 10, it paid compensation and 1. Any deposit shortfall doesn't exceed the greater of
accumulated taxes of $60,000, bringing its total accumulated $100 or 2% of the amount of taxes otherwise required to be
(undeposited) taxes to $100,000. Because Elm, Inc., deposited.
accumulated $100,000 or more on May 10 (Friday), Elm, Inc.,
2. The deposit shortfall is paid or deposited by the
must deposit the $100,000 by May 13 (Monday), the next
shortfall makeup date for each type of depositor as described
business day. Elm, Inc., became a semiweekly schedule
below.
depositor on May 11. Elm, Inc., will be a semiweekly
schedule depositor for the rest of 2024 and for 2025. • Monthly schedule depositor. Deposit the shortfall or pay
it with your return by the due date of Form CT-1. You may pay
Example of when $100,000 Next-Day Deposit Rule the shortfall with Form CT-1 even if the amount is $2,500 or
doesn't apply. Oak Co., a semiweekly schedule depositor, more.
accumulated taxes of $95,000 on a Tuesday (of a Semiweekly schedule depositor. Deposit the shortfall
•
Saturday-through-Tuesday deposit period) and accumulated by the earlier of the first Wednesday or Friday on or after the
$10,000 on Wednesday (of a Wednesday-through-Friday 15th of the month following the month in which the shortfall
deposit period). Because the $10,000 was accumulated in a occurred. For example, if a semiweekly schedule depositor
deposit period different from the one in which the $95,000 has a deposit shortfall during February 2024, the shortfall
was accumulated, the $100,000 Next-Day Deposit Rule makeup date is March 15, 2024 (Friday).
doesn’t apply. Thus, Oak Co. must deposit $95,000 by Friday
and $10,000 by the following Wednesday.
Penalties and Interest
Reducing your deposits for the credit for qualified
sick and family leave compensation. Employers eligible The law provides penalties for failure to file a return, late filing
to claim the credit for qualified sick and family leave of a return, late payment of taxes, failure to make deposits,
compensation paid in 2023 for leave taken after March 31, and late deposits unless filing and/or paying late is due to
2020, and before October 1, 2021, can reduce their deposits reasonable cause and not due to willful neglect. Interest is
by the amount of their anticipated credit. Employers won't be charged on taxes paid late at the rate set by law. For more
subject to a failure-to-deposit (FTD) penalty for reducing their information, see Pub. 15. Deposit or pay your taxes when
deposits if certain conditions are met. See the instructions for they are due, unless you meet the requirements discussed in
Notice 2020-22 and Notice 2021-24.

6 Instructions for Form CT-1 (2023)

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If you receive a notice about a penalty after you file this Qualified Sick Leave Compensation and
return, reply to the notice with an explanation and we will Qualified Family Leave Compensation
determine if you meet reasonable cause criteria. Don't attach
an explanation when you file your return. Qualified sick leave compensation. For purposes of the
credit for qualified sick and family leave compensation,
Use Form 843 to request abatement of assessed qualified sick leave compensation is compensation
penalties or interest. Don't request abatement of assessed (determined without regard to the exclusions under section
penalties or interest on Form CT-1 or Form CT-1 X. 3231(e)(1)) paid under the Emergency Paid Sick Leave Act
Order in which deposits are applied. Generally, tax (EPSLA) or the Emergency Family and Medical Leave
deposits are applied first to the most recent tax liability within Expansion Act (Expanded FMLA) as enacted under the
the specified tax period to which the deposit relates. If you FFCRA and amended for purposes of the ARP. See the
receive an FTD penalty notice, you may designate how your instructions for line 16 for information about the credit for
payment is to be applied in order to minimize the amount of qualified sick and family leave compensation paid in 2023 for
the penalty. You must respond within 90 days of the date of leave taken after March 31, 2020, and before April 1, 2021,
the notice. Follow the instructions on the notice you received. and the instructions for line 17b for information about the
See Rev. Proc. 2001-58 for more information. You can find credit for qualified sick and family leave compensation paid in
Rev. Proc. 2001-58 on page 579 of Internal Revenue Bulletin 2023 for leave taken after March 31, 2021, and before
2001-50 at IRS.gov/pub/irs-irbs/irb01-50.pdf. October 1, 2021.
Trust fund recovery penalty. If taxes that must be withheld Although qualified sick leave compensation and
(that is, trust fund taxes) aren't withheld or aren't deposited or ! qualified family leave compensation are defined as
paid to the United States Treasury, the trust fund recovery CAUTION compensation determined without regard to the
penalty may apply. The penalty is 100% of the unpaid trust exclusions under section 3231(e)(1) for purposes of the
fund tax. If these unpaid taxes can't be immediately collected credit for qualified sick and family leave compensation, don't
from the employer or business, the trust fund recovery include any compensation otherwise excluded under section
penalty may be imposed on all persons who are determined 3231(e)(1) when reporting qualified sick leave compensation
by the IRS to be responsible for collecting, accounting for, or and qualified family leave compensation on lines 1, 2, 3, 4, 5,
paying over these taxes, and who acted willfully in not doing 6, and 7.
so. For more information, see Trust Fund Recovery Penalty in EPSLA. Employers with fewer than 500 employees and,
section 11 of Pub. 15. The trust fund recovery penalty won't for leave taken after March 31, 2021, and before October 1,
apply to any amount of trust fund taxes an employer holds 2021, certain governmental employers without regard to
back in anticipation of any credits they are entitled 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
Specific Instructions
leave to employees that otherwise meets the requirements of
Final Return the EPSLA. Under the EPSLA, as amended for purposes of
the ARP, compensation is qualified sick leave compensation
If you stop paying taxable compensation and won't have to if paid to employees that are unable to work or telework
file Form CT-1 in the future, you must file a final return and before October 1, 2021, because the employee:
check the final return box at the top of Form CT-1 under
“2023.” The final return should be accompanied by a 1. Is subject to a federal, state, or local quarantine or
statement providing the last date on which you paid isolation order related to COVID-19;
compensation that you reported on Form CT-1, the address 2. Has been advised by a health care provider to
at which the records for your Forms CT-1 will be kept, and the self-quarantine due to concerns related to COVID-19;
name of the person keeping the records. If the business has 3. Is experiencing symptoms of COVID-19 and seeking a
been transferred to another person, the statement should medical diagnosis; or, for leave taken after March 31, 2021,
include the name and address of the transferee and the date and before October 1, 2021, is seeking or awaiting the results
of the transfer. If the business wasn't transferred or the of a diagnostic test for, or a medical diagnosis of, COVID-19
transferee isn't known, the statement should so state. (and the employee has been exposed to COVID-19 or the
Processing of your return may be delayed if you don't employee's employer has requested such test or diagnosis),
or the employee is obtaining immunizations related to
CAUTION and Tax columns.
! provide the required amounts in the Compensation COVID-19 or recovering from an injury, disability, illness, or
condition related to such immunization;
Line 1—Tier 1 Employer Tax 4. Is caring for an individual subject to an order described
Enter the compensation (other than tips and sick pay), in (1) or who has been advised as described in (2);
including qualified sick leave compensation and qualified 5. Is caring for son or daughter because the school or
family leave compensation paid in 2023 for leave taken after place of care for that child has been closed, or the childcare
March 31, 2021, and before October 1, 2021, subject to Tier provider for that child is unavailable, due to COVID-19
1 Employer tax in the Compensation column. Don't include precautions; or
qualified sick leave compensation paid in 2023 or qualified 6. Is experiencing any other substantially similar
family leave compensation paid in 2023 for leave taken after condition specified by the U.S. Department of Health and
March 31, 2020, and before April 1, 2021. Multiply by 6.2% Human Services, which for leave taken after March 31, 2021,
and enter the result in the Tax column. The total amount and before October 1, 2021, includes to accompany an
listed in the Compensation column for lines 1 and 8 individual to obtain immunization related to COVID-19, or to
combined may not be more than $160,200 per employee. care for an individual who is recovering from any injury,
disability, illness, or condition related to the immunization.

Instructions for Form CT-1 (2023) 7

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Son or daughter. A son or daughter must generally have unavailable, due to a public health emergency. See Son or
been under 18 years of age or incapable of self-care because daughter, earlier, for more information. For leave taken after
of a mental or physical disability. A son or daughter includes March 31, 2021, and before October 1, 2021, the leave can
a biological child, adopted child, stepchild, foster child, legal be granted for any other reason provided by the EPSLA, as
ward, or child for whom the employee assumes parental amended for purposes of the ARP.
status and carries out the obligations of a parent. For leave taken after March 31, 2020, and before April 1,
Limits on qualified sick leave compensation. The 2021, the first 10 days for which an employee takes leave
EPSLA, as amended for purposes of the ARP, provides may be unpaid. During this period, employees may use other
different limitations for different circumstances under which forms of paid leave, such as qualified sick leave, accrued sick
qualified sick leave compensation is paid. For paid sick leave leave, annual leave, or other paid time off. After an employee
qualifying under (1), (2), or (3) above, the amount of qualified takes leave for 10 days, the employer provides the employee
sick leave compensation is determined at the employee's paid leave (that is, qualified family leave compensation) for
regular rate of pay, but the compensation may not exceed up to 10 weeks. For leave taken after March 31, 2021, and
$511 for any day (or portion of a day) for which the individual before October 1, 2021, the 10-day rule discussed above
is paid sick leave. For paid sick leave qualifying under (4), (5), doesn't apply and the paid leave can be provided for up to 12
or (6) above, the amount of qualified sick leave compensation weeks.
is determined at two-thirds the employee's regular rate of pay, Rate of pay and limit on compensation. The rate of pay
but the compensation may not exceed $200 for any day (or must be at least two-thirds of the employee's regular rate of
portion of a day) for which the individual is paid sick leave. pay (as determined under the Fair Labor Standards Act of
The EPSLA also limits each individual to a maximum of up to 1938), multiplied by the number of hours the employee would
80 hours of paid sick leave in total for leave taken after March have otherwise been scheduled to work. For leave taken after
31, 2020, and before April 1, 2021. The ARP resets this limit March 31, 2020, and before April 1, 2021, the qualified family
at 80 hours of paid sick leave for leave taken after March 31, leave compensation can't exceed $200 per day or $10,000 in
2021, and before October 1, 2021. Therefore, for leave taken the aggregate per employee. For leave taken after March 31,
after March 31, 2020, and before April 1, 2021, the maximum 2021, and before October 1, 2021, the limit resets and the
amount of paid sick leave compensation can't exceed $5,110 total qualified family leave compensation can't exceed $200
for an employee for leave under (1), (2), or (3), and it can't per day or $12,000 in the aggregate per employee.
exceed $2,000 for an employee for leave under (4), (5), or
(6). These maximum amounts also reset and apply to leave For more information about qualified family leave
taken after March 31, 2021, and before October 1, 2021. compensation, go to IRS.gov/PLC.

For more information about qualified sick leave Line 2—Tier 1 Employer Medicare Tax
compensation, go to IRS.gov/PLC. Enter the compensation (other than tips and sick pay),
Qualified family leave compensation. For purposes of including qualified sick leave compensation paid in 2023 and
the credit for qualified sick and family leave compensation, qualified family leave compensation paid in 2023, subject to
qualified family leave compensation is compensation Tier 1 Employer Medicare tax in the Compensation column.
(determined without regard to the exclusions under section Multiply by 1.45% and enter the result in the Tax column.
3231(e)(1)) paid under the Expanded FMLA as enacted
under the FFCRA and amended for purposes of the ARP. Line 3—Tier 2 Employer Tax
However, some compensation eligible for the credit should Enter the compensation (other than tips), including qualified
not be reported as taxable compensation on lines 1, 2, 3, 4, sick leave compensation paid in 2023 and qualified family
5, 6, and 7. See the Caution, earlier, for more information. leave compensation paid in 2023, subject to Tier 2 Employer
See the instructions for line 16 for information about the credit tax in the Compensation column. Don't enter more than
for qualified sick and family leave compensation paid in 2023 $118,800 per employee. Multiply by 13.1% and enter the
for leave taken after March 31, 2020, and before April 1, result in the Tax column.
2021, and the instructions for line 17b for information about
the credit for qualified sick and family leave compensation Line 4—Tier 1 Employee Tax
paid in 2023 for leave taken after March 31, 2021, and before Enter the compensation, including tips reported (but
October 1, 2021. excluding sick pay), qualified sick leave compensation paid in
Expanded FMLA. Employers with fewer than 500 2023, and qualified family leave compensation paid in 2023,
employees and, for leave taken after March 31, 2021, and subject to Tier 1 Employee tax in the Compensation column.
before October 1, 2021, certain governmental employers Multiply by 6.2% and enter the result in the Tax column. The
without regard to number of employees (except for the total amount listed in the Compensation column for lines 4
federal government and its agencies and instrumentalities and 10 combined may not be more than $160,200 per
unless described in section 501(c)(1)) are entitled to a credit employee.
under the FFCRA, as amended for purposes of the ARP, if Stop collecting the 6.2% Tier 1 Employee tax when the
they provide paid family leave to employees that otherwise employee's compensation (including sick pay), tips, qualified
meets the requirements of the Expanded FMLA. For leave sick leave compensation paid in 2023, and qualified family
taken after March 31, 2020, and before April 1, 2021, leave compensation paid in 2023, reach the maximum for the
compensation is qualified family leave compensation if paid year ($160,200 for 2023). However, your liability for Tier 1
to an employee who has been employed for at least 30 Employer tax on compensation continues until the
calendar days when an employee is unable to work due to compensation paid in 2023 (including sick pay), but not
the need to care for a son or daughter under 18 years of age including tips, totals $160,200 for the year.
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

8 Instructions for Form CT-1 (2023)

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All compensation (including sick pay) that is subject to Tier
Line 5—Tier 1 Employee Medicare Tax
1 Medicare tax is subject to Tier 1 Employee Additional
Enter the compensation, including tips reported (but Medicare Tax if paid in excess of the $200,000 withholding
excluding sick pay), qualified sick leave compensation paid in threshold.
2023, and qualified family leave compensation paid in 2023,
subject to Tier 1 Employee Medicare tax in the If you’re a railroad employer paying your employees sick
Compensation column. Multiply by 1.45% and enter the pay, or a third-party payer who didn't notify the employer of
result in the Tax column. For information on reporting tips, the payments (thereby subject to the employee and employer
see Tips, earlier. tax), make entries on lines 8–12. If you’re subject to only the
employer or employee tax, complete only the applicable
Line 6—Tier 1 Employee Additional lines. Multiply by the appropriate rates and enter the results in
the Tax column.
Medicare Tax Withholding
Enter the compensation, including tips reported (but Line 13—Total Tax Based on
excluding sick pay), qualified sick leave compensation paid in
2023, and qualified family leave compensation paid in 2023, Compensation
that is subject to Tier 1 Employee Additional Medicare Tax Add lines 1 through 12 and enter the result on line 13.
withholding. You’re required to begin withholding Tier 1
Employee Additional Medicare Tax in the pay period in which Line 14—Adjustments to Taxes Based
you pay compensation in excess of $200,000 to an employee on Compensation
and continue to withhold it each pay period until the end of
the calendar year. Tier 1 Employee Additional Medicare Tax Don't use line 14 for prior period adjustments. Make
is only imposed on the employee. There is no employer share ! all prior period adjustments on Form CT-1 X.
of Tier 1 Additional Medicare Tax. All compensation CAUTION
(including sick pay) that is subject to Tier 1 Medicare tax is Enter on line 14:
subject to Tier 1 Employee Additional Medicare Tax if paid in • A fractions-of-cents adjustment (see Adjustment for
excess of the $200,000 withholding threshold. fractions of cents, later);
Go to IRS.gov/ADMTfaqs for more information on Tier 1 • Credits for overpayments of penalty or interest paid on tax
for earlier years; and
Employee Additional Medicare Tax.
• Any uncollected Tier 1 Employee tax, Tier 1 Employee
Line 7—Tier 2 Employee Tax Medicare tax, Tier 1 Employee Additional Medicare Tax, and
Tier 2 Employee tax on tips.
Enter the compensation, including tips reported, qualified
sick leave compensation paid in 2023, and qualified family Enter the total of these adjustments in the Tax column. If
leave compensation paid in 2023, subject to Tier 2 Employee you’re reporting both an addition and a subtraction, enter only
tax in the Compensation column. Only the first $118,800 of the difference between the two on line 14. If the net
the employee's compensation (including tips, qualified sick adjustment is negative, report the amount on line 14 using a
leave compensation paid in 2023, and qualified family leave minus sign, if possible. If your computer software doesn't
compensation paid in 2023) is subject to this tax. Multiply by allow the use of minus signs, you may use parentheses.
4.9% and enter the result in the Tax column. For information
on reporting tips, see Tips, earlier. Don't include on line 14 any 2022 overpayment that is
applied to this year's return (this is included on line 20).
Any compensation paid during the current year that
Required statement. Except for adjustments for fractions of
! was earned in prior years (reported to the Railroad cents, explain amounts entered on line 14 in a separate
CAUTION Retirement Board on Form BA-4, Report of
Creditable Compensation Adjustments) is taxable at the statement. Include your name, EIN, calendar year of the
current year tax rates, unless special timing rules for return, and “Form CT-1” on each page you attach. Include in
nonqualified deferred compensation apply. See Pub.15-A. the statement the following information.
Include such compensation with current year compensation • An explanation of the item the adjustment is intended to
on lines 1–7, as appropriate. correct showing the compensation subject to Tier 1 and Tier
2 taxes and their respective tax rates.
• The amount of the adjustment.
Lines 8–12—Tier 1 Taxes on Sick Pay • The name and account number of any employee from
Don't include qualified sick leave compensation paid whom employee tax was undercollected or overcollected.
• How you and the employee have settled any
! in 2023 or qualified family leave compensation paid undercollection or overcollection of employee tax.
CAUTION in 2023 on lines 8 through 12.
Enter any sick pay payments during the year that are Adjustment for fractions of cents. If there is a small
subject to Tier 1 taxes, Tier 1 Medicare taxes, and Tier 1 difference between the total employee tax (lines 4–7 and 10–
Employee Additional Medicare Tax withholding in the 12) and the total actually withheld from employee
Compensation column. Multiply by the rate for the line and compensation including tips, it may be caused by rounding to
enter the result in the Tax column for that line. For Tier 1 the nearest cent each time you figured payroll. The
Employer taxes, the total amount listed in the Compensation difference, positive or negative, is your fractions-of-cents
column for lines 1 and 8 combined may not be more than adjustment to be reported on line 14. If the actual amount
$160,200 per employee. For Tier 1 Employee taxes, the total withheld is less, report a negative adjustment in the entry
amount listed in the Compensation column for lines 4 and 10 space. If the actual amount is more, report a positive
combined may not be more than $160,200 per employee. adjustment.
Tier 1 Medicare taxes aren't subject to a dollar limitation.

Instructions for Form CT-1 (2023) 9

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        If this is the only entry on line 14, you’re not required  salary reduction contributions. However, the qualified health 
TIP     to attach a statement explaining the adjustment.           plan expenses shouldn't include amounts that the employee 
                                                                   paid for with after-tax contributions. For more information, go 
                                                                   to IRS.gov/PLC.
Line 15—Total Taxes After 
                                                                           You must include the full amount (both the 
Adjustments                                                        TIP     nonrefundable and refundable portions) of the credit 
Combine the amounts shown on lines 13 and 14 and enter                     for qualified sick and family leave compensation in 
the result on line 15.                                             your gross income for the tax year that includes the last day 
                                                                   of any calendar quarter in which a credit is allowed.
        Form CT-1 and these instructions use the terms 
TIP     “nonrefundable” and “refundable” when discussing 
        credits. The term “nonrefundable” means the portion        Line 17b—Nonrefundable Portion of 
of the credit which is limited by law to the amount of certain     Credit for Qualified Sick and Family 
taxes. The term “refundable” means the portion of the credit 
which is in excess of those taxes.                                 Leave Compensation for Leave Taken 
                                                                   After March 31, 2021, and Before 
Line 16—Nonrefundable Portion of 
                                                                   October 1, 2021
Credit for Qualified Sick and Family 
                                                                           Complete line 17b only if qualified sick leave 
Leave Compensation for Leave Taken                                    !    compensation and/or qualified family leave 
                                                                   CAUTION compensation was paid in 2023 for leave taken after 
After March 31, 2020, and Before April                             March 31, 2021, and before October 1, 2021.
1, 2021                                                               Employers with fewer than 500 employees and certain 
        Complete line 16 only if qualified sick leave              governmental employers without regard to number of 
                                                                   employees (except for the federal government and its 
CAUTION compensation was paid in 2023 for leave taken after 
!       compensation and/or qualified family leave                 agencies and instrumentalities unless described in section 
March 31, 2020, and before April 1, 2021.                          501(c)(1)) are entitled to a credit if they provide paid sick 
                                                                   leave to employees that otherwise meets the requirements of 
Certain private employers with fewer than 500 employees            the EPSLA, as amended for purposes of the ARP, and/or 
that provide paid sick leave under the EPSLA and/or provide        provide paid family leave to employees that otherwise meets 
paid family leave under the Expanded FMLA are eligible to          the requirements under the Expanded FMLA, as amended 
claim the credit for qualified sick and family leave               for purposes of the ARP, for qualified sick and family leave 
compensation for leave taken after March 31, 2020, and             compensation for leave taken after March 31, 2021, and 
before April 1, 2021. For purposes of this credit, qualified sick  before October 1, 2021. For purposes of this credit, qualified 
leave compensation and qualified family leave compensation         sick leave compensation and qualified family leave 
are compensation (determined without regard to the                 compensation are compensation determined without regard 
exclusions under section 3231(e)(1)) paid under the EPSLA          to the exclusions from the definition of compensation under 
and Expanded FMLA. Enter the nonrefundable portion of the          section 3231(e)(1), that an employer pays that otherwise 
credit for qualified sick and family leave compensation from       meet the requirements of the EPSLA or Expanded FMLA, as 
Worksheet 1, Step 2, line 2j. The credit for qualified sick and    enacted under the FFCRA and amended for purposes of the 
family leave compensation consists of the qualified sick leave     ARP. Enter the nonrefundable portion of the credit for 
compensation, the qualified family leave compensation, the         qualified sick and family leave compensation from Worksheet 
qualified health plan expenses allocable to that                   2, Step 2, line 2p.
compensation, and the Tier 1 Employer Medicare tax 
allocable to that compensation. The nonrefundable portion of          The credit for qualified sick and family leave compensation 
the credit is limited to the Tier 1 Employer tax (line 1) and Tier consists of the:
1 Employer tax—Sick Pay (line 8).                                  •  Qualified sick leave compensation and/or qualified family 
Any credit in excess of the remaining amount of the Tier 1         leave compensation;
Employer tax (line 1) and Tier 1 Employer tax—Sick Pay             •  Qualified health plan expenses allocable to qualified sick 
(line 8) is refundable and reported on Form CT-1, line 23. For     and family leave compensation;
more information on the credit for qualified sick and family       •  Collectively bargained defined benefit pension plan 
leave compensation, go to IRS.gov/PLC.                             contributions, subject to the qualified leave compensation 
                                                                   limitations, allocable to the qualified sick and family leave 
Qualified health plan expenses allocable to qualified              compensation;
sick and family leave compensation.    The credit for              •  Collectively bargained apprenticeship program 
qualified sick leave compensation and qualified family leave       contributions, subject to the qualified leave compensation 
compensation is increased to cover the qualified health plan       limitations, allocable to the qualified sick and family leave 
expenses that are properly allocable to the qualified leave        compensation; and
compensation for which the credit is allowed. These qualified      •  Tier 1 Employer tax and Tier 1 Employer Medicare tax 
health plan expenses are amounts paid or incurred by the           allocable to the qualified sick and family leave compensation.
employer to provide and maintain a group health plan but 
only to the extent such amounts are excluded from the                 The nonrefundable portion of the credit is limited to the 
employees’ income as coverage under an accident or health          Tier 1 Employer Medicare tax (line 2) and Tier 1 Employer 
plan. The amount of qualified health plan expenses generally       Medicare tax—Sick pay (line 9). You can't claim the credit for 
includes both the portion of the cost paid by the employer         leave taken after March 31, 2021, and before October 1, 
and the portion of the cost paid by the employee with pre-tax      2021, if you made qualified sick or family leave compensation 

10                                                                                           Instructions for Form CT-1 (2023)

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available in a manner that discriminates in favor of highly      base units, as defined by section 4001(a)(11) of the 
compensated employees, full-time employees, or employees         Employee Retirement Income Security Act of 1974 (ERISA).
on the basis of employment tenure. See Highly compensated          Allocation rules. The amount of collectively bargained 
employee, later, for the definition.                             defined benefit pension plan contributions allocated to 
  For leave taken after March 31, 2021, and before October       qualified sick leave compensation and/or qualified family 
1, 2021, the credit for qualified sick and family leave          leave compensation during a quarter is the pension 
compensation is reduced by the amount of the credit allowed      contribution rate (expressed as an hourly rate) multiplied by 
under section 41 (for the credit for increasing research         the number of hours qualified sick leave compensation 
activities) with respect to compensation taken into account      and/or qualified family leave compensation was provided to 
for determining the credit for qualified sick and family leave   employees covered under the collective bargaining 
compensation; and any compensation taken into account in         agreement during the quarter.
determining the credit for qualified sick and family leave       Collectively bargained apprenticeship program contri-
compensation can't be taken into account as compensation         butions. For purposes of qualified sick and family leave 
for purposes of the credits under sections 45A, 45P, 45S, and    compensation, collectively bargained apprenticeship 
51. For leave taken after March 31, 2021, and before October     program contributions are contributions for a calendar 
1, 2021, qualified compensation also doesn't include             quarter:
compensation that was used as payroll costs in connection        • Paid or incurred by an employer on behalf of its employees 
with a Shuttered Venue Operator Grant under section 324 of       to a registered apprenticeship program, which is an 
the Economic Aid to Hard-Hit Small Businesses, Nonprofits,       apprenticeship registered under the National Apprenticeship 
and Venues Act; or a restaurant revitalization grant under       Act of August 16, 1937, and meets the standards of Federal 
section 5003 of the ARP. Employers can receive both a Small      Regulations under subpart A of Part 29 and Part 30 of title 29;
Business Interruption Loan under the Paycheck Protection         • Made based on an apprenticeship program contribution 
Program (PPP) and the credit for qualified sick and family       rate; and
leave compensation; however, employers can't receive both        • Required to be made under the terms of a collective 
loan forgiveness and a credit for the same compensation.         bargaining agreement in effect during the quarter.
The same compensation can't be treated as both qualified           Apprenticeship program contribution rate.       The 
sick leave compensation and qualified family leave               apprenticeship program contribution rate is the contribution 
compensation.                                                    rate that the employer is obligated to pay under the terms of a 
  Any credit in excess of the remaining amount of the Tier 1     collective bargaining agreement for benefits under a 
Employer Medicare tax (line 2) and Tier 1 Employer Medicare      registered apprenticeship program, as the rate is applied to 
tax—Sick pay (line 9) is refundable and reported on Form         contribution base units, as defined by section 4001(a)(11) of 
CT-1, line 24b. For more information on the credit for qualified ERISA.
sick and family leave compensation, go to IRS.gov/PLC.             Allocation rules. The amount of collectively bargained 
                                                                 apprenticeship program contributions allocated to qualified 
Qualified health plan expenses allocable to qualified 
                                                                 sick leave compensation and/or qualified family leave 
sick and family leave compensation.    The credit for 
                                                                 compensation in a quarter is the apprenticeship program 
qualified sick leave compensation and qualified family leave 
                                                                 contribution rate (expressed as an hourly rate) multiplied by 
compensation is increased to cover the qualified health plan 
                                                                 the number of hours qualified sick leave compensation 
expenses that are properly allocable to the qualified leave 
                                                                 and/or qualified family leave compensation was provided to 
compensation for which the credit is allowed. These qualified 
                                                                 employees covered under the collective bargaining 
health plan expenses are amounts paid or incurred by the 
                                                                 agreement during the quarter.
employer to provide and maintain a group health plan but 
only to the extent such amounts are excluded from the            Highly compensated employee. A highly compensated 
employees' income as coverage under an accident or health        employee is an employee who meets either of the following 
plan. The amount of qualified health plan expenses generally     tests.
includes both the portion of the cost paid by the employer         1. The employee was a 5% owner at any time during the 
and the portion of the cost paid by the employee with pre-tax    year or the preceding year.
salary reduction contributions. However, qualified health plan 
                                                                   2. The employee received more than $135,000 in pay for 
expenses don't include amounts that the employee paid for 
                                                                 the preceding year.
with after-tax contributions. For more information, go to 
IRS.gov/PLC.                                                       You can choose to ignore test (2) if the employee wasn't 
Collectively bargained defined benefit pension plan              also in the top 20% of employees when ranked by pay for the 
contributions. For purposes of qualified sick and family         preceding year.
leave compensation, collectively bargained defined benefit 
                                                                 Line 18—Total Nonrefundable Credits
pension plan contributions are contributions for a calendar 
quarter:                                                         Add lines 16 and 17b. Enter the total on line 18.
• Paid or incurred by an employer on behalf of its employees 
to a defined benefit plan, as defined in section 414(j), which   Line 19—Total Taxes After 
meets the requirements of section 401(a);                        Adjustments and Nonrefundable 
• Made based on a pension contribution rate; and
• Required to be made under the terms of a collective            Credits
bargaining agreement in effect during the quarter.               Subtract line 18 from line 15 and enter the result on line 19.
  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 

Instructions for Form CT-1 (2023)                                                                                          11

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Line 20—Total Deposits for the Year Line 28—Balance Due
Enter the total Form CT-1 deposits for the year, including any If line 19 is more than line 25, enter the difference on line 28.
overpayment that you applied from filing Form CT-1 X and Otherwise, see the instructions for line 29, later. You don't
any overpayment that you applied from your 2022 return. have to pay if line 28 is under $1. Generally, you should have
a balance due only if your total railroad retirement taxes
Line 23—Refundable Portion of Credit based on compensation (line 19) are less than $2,500.
for Qualified Sick and Family Leave However, see Accuracy of Deposits Rule, earlier, regarding
payments made under the accuracy of deposits rule.
Compensation for Leave Taken After If you were required to make federal tax deposits, pay the
March 31, 2020, and Before April 1, amount shown on line 28 by EFT. If you weren't required to
make federal tax deposits or you're a monthly schedule
2021 depositor making a payment under the accuracy of deposits
Complete line 23 only if qualified sick leave rule, you may pay the amount shown on line 28 by EFT,
check, or money order. For more information on electronic
! compensation and/or qualified family leave payment options, go to IRS.gov/Payments.
CAUTION compensation was paid in 2023 for leave taken after
March 31, 2020, and before April 1, 2021. If you pay by EFT, file your return using the address under
Certain private employers with fewer than 500 employees Where To File, earlier. Don't file Form CT-1(V), Payment
that provide paid sick leave under the EPSLA and/or provide Voucher. If you pay by check or money order, make it payable
paid family leave under the Expanded FMLA are eligible to to “United States Treasury.” Enter your EIN, “Form CT-1,” and
claim the credit for qualified sick and family leave “2023” on your check or money order. Complete Form
compensation. Enter the refundable portion of the credit for CT-1(V) and enclose with Form CT-1.

qualified sick and family leave compensation from Worksheet Line 29—Overpayment
1, Step 2, line 2k. The credit for qualified sick and family
leave compensation consists of the qualified sick leave If line 25 is more than line 19, enter the difference on line 29.
compensation, the qualified family leave compensation, the Never make an entry on both lines 29 and 28. If line 29 is
qualified health plan expenses allocable to that less than $1, we will send you a refund or apply it to your next
compensation, and the Tier 1 Employer Medicare tax return only if you ask us in writing to do so.
allocable to that compensation. The refundable portion of the If you deposited more than the correct amount for the year,
credit is allowed after the Tier 1 employer taxes from lines 1 you can have the overpayment refunded or applied to your
and 8 are reduced to zero by nonrefundable credits. 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
Line 24b—Refundable Portion of check both boxes, generally we will apply the overpayment to
Credit for Qualified Sick and Family your next return. Regardless of any boxes you check or don't
check on line 29, we may apply your overpayment to any past
Leave Compensation for Leave Taken due tax account that is shown in our records under your EIN.

After March 31, 2021, and Before Lines 30–33 and Lines 36–41
October 1, 2021 The amounts entered on lines 30–33 and lines 36–41 are
amounts that you use on the worksheets at the end of these
Complete line 24b only if qualified sick leave instructions to figure certain credits. If you’re claiming these
! compensation and/or qualified family leave credits, you must enter the applicable amounts.
CAUTION compensation was paid in 2023 for leave taken after
March 31, 2021, and before October 1, 2021. Complete lines 30–33 only if qualified sick leave
compensation and/or qualified family leave
Employers with fewer than 500 employees and certain CAUTION! compensation was paid in 2023 for leave taken after
governmental employers without regard to number of March 31, 2020, and before April 1, 2021.
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 Line 30—Qualified Sick Leave
leave to employees that otherwise meets the requirements of Compensation for Leave Taken After
the EPSLA, as amended for purposes of the ARP, and/or
provide paid family leave to employees that otherwise meets March 31, 2020, and Before April 1,
the requirements under the Expanded FMLA, as amended 2021
for purposes of the ARP, for leave taken after March 31, 2021,
Enter the qualified sick leave compensation you paid in 2023
and before October 1, 2021. Enter the refundable portion of
to your employees for leave taken after March 31, 2020, and
the credit for qualified sick and family leave compensation
before April 1, 2021, including any qualified sick leave
from Worksheet 2, Step 2, line 2q. The refundable portion of
compensation that was above the Tier 1 compensation base
the credit is allowed after the Tier 1 employer Medicare taxes
and any qualified sick leave compensation excluded from the
from lines 2 and 9 are reduced to zero by nonrefundable
definition of compensation under section 3231(e)(1). This
credits.
amount is also entered on Worksheet 1, Step 2 , line 2a. See
Line 25—Total Deposits and the instructions for line 16 for information about the credit for
qualified sick and family leave compensation for leave taken
Refundable Credits after March 31, 2020, and before April 1, 2021. For more
Add lines 20, 23, and 24b. Enter the total on line 25. information about qualified sick leave compensation, go to
IRS.gov/PLC.

12 Instructions for Form CT-1 (2023)

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                                                                  March 31, 2021, and before October 1, 2021. This amount is 
Line 31—Qualified Health Plan 
                                                                  also entered on Worksheet 2, Step 2, line 2b.
Expenses Allocable to Compensation 
                                                                  Line 38—Amounts Under Certain 
Reported on Line 30
Enter the qualified health plan expenses allocable to qualified   Collectively Bargained Agreements 
sick leave compensation paid in 2023 for leave taken after        Allocable to Qualified Sick Leave 
March 31, 2020, and before April 1, 2021. This amount is 
also entered on Worksheet 1, Step 2, line 2b.                     Compensation Reported on Line 36
                                                                  Enter the collectively bargained defined benefit pension plan 
Line 32—Qualified Family Leave                                    contributions and collectively bargained apprenticeship 
                                                                  program contributions allocable to qualified sick leave 
Compensation for Leave Taken After 
                                                                  compensation paid in 2023 for leave taken after March 31, 
March 31, 2020, and Before April 1,                               2021, and before October 1, 2021. This amount is also 
                                                                  entered on Worksheet 2, Step 2, line 2c.
2021
Enter the qualified family leave compensation you paid in                 Complete lines 39, 40, and 41 only if qualified family 
2023 to your employees for leave taken after March 31, 2020,      !       leave compensation was paid in 2023 for leave taken 
and before April 1, 2021, including any qualified family leave    CAUTION after March 31, 2021, and before October 1, 2021.
compensation that was above the Tier 1 compensation base 
and any qualified family leave compensation excluded from         Line 39—Qualified Family Leave 
the definition of compensation under section 3231(e)(1). This 
                                                                  Compensation for Leave Taken After 
amount is also entered on Worksheet 1, Step 2, line 2e. See 
the instructions for line 16 for information about the credit for March 31, 2021, and Before October 
qualified sick and family leave compensation for leave taken 
after March 31, 2020, and before April 1, 2021. For more          1, 2021
information about qualified family leave compensation, go to      Enter the qualified family leave compensation you paid in 
IRS.gov/PLC.                                                      2023 to your employees for leave taken after March 31, 2021, 
                                                                  and before October 1, 2021, including any qualified family 
Line 33—Qualified Health Plan                                     leave compensation that was above the Tier 1 compensation 
                                                                  base and any qualified family leave compensation excluded 
Expenses Allocable to Compensation                                from the definition of compensation under section 3231(e)(1). 
Reported on Line 32                                               See the instructions for line 17b, earlier, for more information 
Enter the qualified health plan expenses allocable to qualified   about qualified family leave compensation for leave taken 
family leave compensation paid in 2023 for leave taken after      after March 31, 2021, and before October 1, 2021. This 
March 31, 2020, and before April 1, 2021. This amount is          amount is also entered on Worksheet 2, Step 2, line 2g.
also entered on Worksheet 1, Step 2, line 2f.
                                                                  Line 40—Qualified Health Plan 
        Complete lines 36, 37, and 38 only if qualified sick 
                                                                  Expenses Allocable to Qualified 
!       leave compensation was paid in 2023 for leave taken 
CAUTION after March 31, 2021, and before October 1, 2021.         Family Leave Compensation Reported 
                                                                  on Line 39
Line 36—Qualified Sick Leave 
                                                                  Enter the qualified health plan expenses allocable to qualified 
Compensation for Leave Taken After                                family leave compensation paid in 2023 for leave taken after 
                                                                  March 31, 2021, and before October 1, 2021. This amount is 
March 31, 2021, and Before October 
                                                                  also entered on Worksheet 2, Step 2, line 2h.
1, 2021
Enter the qualified sick leave compensation you paid in 2023      Line 41—Amounts Under Certain 
to your employees for leave taken after March 31, 2021, and       Collectively Bargained Agreements 
before October 1, 2021, including any qualified sick leave 
compensation that was above the Tier 1 compensation base          Allocable to Qualified Family Leave 
and any qualified sick leave compensation excluded from the       Compensation Reported on Line 39
definition of compensation under section 3231(e)(1). See the 
instructions for line 17b, earlier, for more information about    Enter the collectively bargained defined benefit pension plan 
qualified sick leave compensation for leave taken after March     contributions and collectively bargained apprenticeship 
31, 2021, and before October 1, 2021. This amount is also         program contributions allocable to qualified family leave 
entered on Worksheet 2, Step 2, line 2a.                          compensation paid in 2023 for leave taken after March 31, 
                                                                  2021, and before October 1, 2021. This amount is also 
Line 37—Qualified Health Plan                                     entered on Worksheet 2, Step 2, line 2i.

Expenses Allocable to Qualified Sick                              Part II. Record of Railroad Retirement 
Leave Compensation Reported on                                    Tax Liability
Line 36                                                           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 
Enter the qualified health plan expenses allocable to qualified   complete Part II or Form 945-A.
sick leave compensation paid in 2023 for leave taken after 

Instructions for Form CT-1 (2023)                                                                                            13

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If you’re a monthly schedule depositor, enter your tax for the first payroll payment of the year, but not below zero.
liability for each month and figure the total liability for the year. Then reduce the liability for each successive payroll payment
If you don't enter your tax liability for each month, the IRS of the year until the nonrefundable portion of the credit is
won't know when you should have made deposits and may used. Any credit for qualified sick and family leave
assess an “averaged” FTD penalty. See section 11 of Pub. compensation paid in 2023 for leave taken after March 31,
15. If your tax liability for any month is negative, don't enter a 2021, and before October 1, 2021, that is remaining at the
negative amount for the month. Instead, enter zero for the end of the year because it exceeds the Tier 1 employer
month and subtract that negative amount from your tax Medicare tax reported on Form CT-1, lines 2 and 9, is
liability for the next month. claimed on line 24b as a refundable credit. The refundable
portion of the credit doesn't reduce the liability reported on
Adjusting tax liability for nonrefundable credits claimed
Part II or Form 945-A.
on lines 16 and 17b. Monthly schedule depositors and
semiweekly schedule depositors must account for You may reduce your deposits by the amount of the
nonrefundable credits claimed on lines 16 and 17b when TIP nonrefundable and refundable portions of the credit
reporting their tax liabilities on Part II or Form 945-A. The total for qualified sick and family leave compensation, as
tax liability for the year must equal the amount reported on discussed earlier under Reducing your deposits for the credit
line 19. Failure to account for the nonrefundable credits on for qualified sick and family leave compensation.
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. The amount shown on line V must equal the amount
Don't reduce your monthly tax liability reported on Part II or ! shown on line 19.
your daily tax liability reported on Form 945-A below zero. CAUTION
Nonrefundable portion of credit for qualified sick and If you’re a semiweekly schedule depositor or if you
family leave compensation for leave taken after March accumulate $100,000 or more in tax liability on any day in a
31, 2020, and before April 1, 2021 (line 16). The deposit period, you must complete Form 945-A and file it with
nonrefundable portion of the credit for qualified sick and Form CT-1. Don't complete lines I–V if you file Form 945-A.
family leave compensation paid in 2023 for leave taken after The $100,000 tax liability threshold requiring a next-day
March 31, 2020, and before April 1, 2021, is limited to the deposit is determined before you consider any reduction of
Tier 1 employer taxes reported on Form CT-1, lines 1 and 8, your liability for nonrefundable credits. For more information,
on compensation paid in the year. In completing Part II or including an example, see frequently asked question 17 at
Form 945-A, you take into account the nonrefundable portion IRS.gov/ETD.
of the credit for qualified sick and family leave compensation
paid in 2023 against the liability for the first payroll payment of Third-Party Designee
the year, but not below zero. Then reduce the liability for each
If you want to allow an employee of your business, a return
successive payroll payment of the year until the
preparer, or another third party to discuss your Form CT-1
nonrefundable portion of the credit is used. Any credit for
with the IRS, check the “Yes” box in the Third-Party Designee
qualified sick and family leave compensation paid in 2023 for
section. Also, enter the designee's name, phone number, and
leave taken after March 31, 2020, and before April 1, 2021,
any five digits that person chooses as their personal
that is remaining at the end of the year because it exceeds
identification number (PIN).
the Tier 1 employer taxes reported on Form CT-1, lines 1 and
8, is claimed on line 23 as a refundable credit. The By checking “Yes” you authorize the IRS to talk to the
refundable portion of the credit doesn’t reduce the liability person you named (your designee) about any questions we
reported on Part II or Form 945-A. may have while we process your return. You also authorize
Example. Maple Co. is a monthly schedule depositor that your designee to do all of the following.
pays employees every Friday. In 2023, Maple Co. had pay • Give us any information that is missing from your return.
dates every Friday starting on January 6, 2023. Maple Co. • Call us for information about processing your return.
paid qualified sick and family leave compensation on March • Respond to certain IRS notices that you have shared with
10 and March 17 for leave taken after March 31, 2020, and the designee about math errors and return preparation. The
before April 1, 2021. The nonrefundable portion of the credit IRS won't send notices to your designee.
for qualified sick and family leave compensation for the year You’re not authorizing the designee to receive any refund
is $3,000. On Part II, Maple Co. will use the $3,000 to reduce check, bind you to anything (including additional tax liability),
the liability for the January 6 pay date, but not below zero. If or otherwise represent you before the IRS. If you want to
any nonrefundable portion of the credit remains, Maple Co. expand the designee's authority, see Pub. 947.
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 The authorization will automatically expire 1 year from the
used. due date (without regard to extensions) for filing your Form
Nonrefundable portion of credit for qualified sick and CT-1. If you or your designee wants to revoke this
family leave compensation for leave taken after March authorization, send the revocation or withdrawal to the IRS
31, 2021, and before October 1, 2021 (line 17b). The office at which you file your Form CT-1.
nonrefundable portion of the credit for qualified sick and
family leave compensation paid in 2023 for leave taken after Who Must Sign
March 31, 2021, and before October 1, 2021, is limited to the The following persons are authorized to sign the return for
Tier 1 employer Medicare tax reported on Form CT-1, lines 2 each type of business entity.
and 9, on compensation paid during the year. In completing • Sole proprietorship—The individual who owns the
Part II or Form 945-A, you take into account the business.
nonrefundable portion of the credit for qualified sick and • Corporation (including a limited liability company
family leave compensation paid in 2023 against the liability (LLC) treated as a corporation)—The president, vice
president, or other principal officer duly authorized to sign.

14 Instructions for Form CT-1 (2023)

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• Partnership (including an LLC treated as a the preparer was paid to prepare Form CT-1 and isn't an
partnership) or unincorporated organization —A employee of the filing entity. The preparer must give you a
responsible and duly authorized partner, member, or officer copy of the return in addition to the copy to be filed with the
having knowledge of its affairs. IRS.
• Single-member LLC treated as a disregarded entity
for federal income tax purposes—The owner of the LLC or If you're a paid preparer, enter your Preparer Tax
a principal officer duly authorized to sign. Identification Number (PTIN) in the space provided. Include
• Trust or estate—The fiduciary. 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
Form CT-1 may also be signed by a duly authorized agent or by filing Form W-12. For more information about applying
of the taxpayer if a valid power of attorney has been filed. for a PTIN online, go to IRS.gov/PTIN. You can't use your
Alternative signature method. Corporate officers or duly PTIN in place of the EIN of the tax preparation firm.
authorized agents may sign Form CT-1 by rubber stamp, Generally, you’re not required to complete this section if
mechanical device, or computer software program. For you’re filing the return as a reporting agent and have a valid
details and required documentation, see Rev. Proc. 2005-39, Form 8655 on file with the IRS. However, a reporting agent
2005-28 I.R.B. 82, available at IRS.gov/irb/ must complete this section if the reporting agent offered legal
2005-28_IRB#RP-2005-39. advice, for example, by advising the client on determining
whether its workers are employees or independent
Paid Preparer Use Only
contractors for federal tax purposes.
A paid preparer must sign Form CT-1 and provide the
information in the Paid Preparer Use Only section of Part I if

Instructions for Form CT-1 (2023) 15

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

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Page 17 of 15            Fileid: … ions/ict-1/2023/a/xml/cycle05/source                                                                              11:40 - 19-Dec-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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

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