What This Notice Means
Next year, the deposit requirements for your Form CT-1, Employer's Annual Railroad Retirement Tax Return, are changing. The IRS set them based on the tax on last year's Form CT-1. The CP137A shows your new requirements.
Your Deposit Schedule
- Last year's liability was $50,000 or less: you are a monthly depositor next year. Deposit taxes for wages paid during a month by the 15th day of the following month.
- Last year's liability was over $50,000: you are a semi-weekly depositor next year. For wages paid Saturday, Sunday, Monday, or Tuesday, deposit by the following Friday. For wages paid Wednesday, Thursday, or Friday, deposit by the following Wednesday.
What to Do
- Check your records against the liability shown on the notice. If they differ, you must determine and follow the correct deposit schedule.
- The notice uses only the liability on your original Form CT-1 for last year. Don't include amended returns. Base your deposit requirements on the original liability.
- If the tax amount shown is zero, you may need to file last year's Form CT-1. If you weren't required to file, or you filed one showing no tax, no action is needed.
Paying and Reporting
- All deposits must be made electronically unless your tax liability is less than $2,500. If your tax for the year is under $2,500, you can pay with Form CT-1(V), the payment voucher attached to Form CT-1.
- EFTPS, the Electronic Federal Tax Payment System, is how most employers make electronic deposits.
- On Form CT-1, show your tax liabilities, not your payments. Monthly depositors enter Tier 1 and Tier 2 taxes for each month in Part II. Semi-weekly depositors use Form 945-A to report tax due for each payday.
The $100,000 Rule
If your accumulated tax liability reaches $100,000, you must deposit the next business day. You immediately become a semi-weekly depositor for the rest of the current year and the next year.
If you received a CP137A notice and need help with railroad retirement tax deposits, call us at (813) 229-7100.