IRS Form CT-1 – Railroad employers have unique tax obligations under the Railroad Retirement Tax Act (RRTA). IRS Form CT-1 (Employer’s Annual Railroad Retirement Tax Return) is the official annual return used to report and pay Tier 1, Tier 2, and Medicare taxes on railroad employee compensation.
This guide covers everything you need to know for tax year 2025: who must file, tax rates and compensation bases, filing deadlines, deposit rules, how to complete the form, and where to download the latest version.
What Is IRS Form CT-1?
Form CT-1 reports taxes imposed by the RRTA. It covers:
- Tier 1 taxes (Social Security-equivalent + Medicare)
- Tier 2 taxes (railroad-specific retirement benefits)
- Additional Medicare Tax withholding (employee share only)
You report these taxes separately from regular federal income tax withholding (reported on Form 941 or 944). Railroad employers also report creditable compensation and service to the Railroad Retirement Board (RRB) on Form BA-3.
Download the official 2025 Form CT-1 here:
https://www.irs.gov/pub/irs-pdf/fct1.pdf
Download the 2025 Instructions for Form CT-1:
https://www.irs.gov/instructions/ict1 (HTML) or https://www.irs.gov/pub/irs-pdf/ict1.pdf (PDF)
Who Must File Form CT-1?
File Form CT-1 if you are a railroad employer (including system units, local lodges, or third-party sick pay payers) and paid one or more employees compensation subject to RRTA taxes during the year.
- After filing your first return, you must file every year—even if no taxable compensation was paid—until you file a final return.
- Disregarded entities and QSubs file under their own EIN.
- Third-party sick pay payers report sick pay subject to Tier 1 taxes on lines 8–12 (and line 12 if the $200,000 Additional Medicare threshold is met for an employee).
2025 Tax Rates and Compensation Bases
| Tax Type | Employer Rate | Employee Rate | Compensation Base (2025) |
|---|---|---|---|
| Tier 1 (Social Security portion) | 6.2% | 6.2% | First $176,100 |
| Tier 1 Medicare | 1.45% | 1.45% | All compensation |
| Additional Medicare Tax | — | 0.9% | Over $200,000 |
| Tier 2 | 13.1% | 4.9% | First $130,800 |
Tips are included in the employee’s Tier 1 and Tier 2 wage bases but excluded from the employer’s Tier 1 and Tier 2 bases (except for certain calculations).
When and Where to File Form CT-1 (2025)?
- Deadline: March 2, 2026 (for the 2025 tax year)
- Mailing address: Internal Revenue Service Center, Kansas City, MO 64999-0048
Deposit and Payment Requirements
Railroad retirement taxes are deposited electronically via EFTPS (Electronic Federal Tax Payment System).
- Deposit schedule is determined by the lookback period (2024 Form CT-1, line 15):
- Monthly if ≤ $50,000
- Semiweekly if > $50,000
- $100,000 Next-Day Rule and $2,500 de minimis rule still apply.
- Balance due on the return must be paid electronically (per Executive Order 14247).
- Overpayments can be refunded by direct deposit (new for Form CT-1) or applied to next year’s return.
How to Complete Form CT-1 (Key Sections)?
Part I – Railroad Retirement Taxes
- Lines 1–7: Compensation and taxes for regular employees (employer and employee shares)
- Lines 8–12: Sick pay compensation and taxes
- Line 13: Total tax
- Line 14: Adjustments (fractions of cents, uncollected employee tax on tips, etc.)
- Line 15: Total taxes after adjustments
- Line 16: Total deposits made
- Line 17: Balance due (pay electronically)
- Line 18: Overpayment (refund or apply to next year + direct deposit info)
Part II – Monthly tax liability summary (only required for monthly depositors with total taxes ≥ $2,500).
Related Forms You May Need
- Form CT-1-X → Correct errors or claim refunds on a previously filed CT-1
- Form 945-A → Annual record of federal tax liability (required for semiweekly depositors)
- Form BA-3 (RRB) → Report creditable compensation and service to the Railroad Retirement Board
Recent Developments (2025)
- Direct deposit refunds are now available.
- All balance-due payments must be made electronically.
- Qualified tips and overtime compensation have special federal income tax withholding rules under new legislation (but remain subject to RRTA taxes).
Common Mistakes to Avoid
- Forgetting to file when no compensation was paid (until final return is filed)
- Using the wrong compensation base or omitting sick pay
- Missing the next-day deposit when $100,000+ is accumulated
- Failing to reconcile deposits (line 16) with actual EFTPS payments
Final Tips
Always use the latest form and instructions from IRS.gov. Keep detailed records of compensation, deposits, and sick pay. If you outsource payroll, you remain ultimately responsible for correct filing and payment.
Official IRS Resources
- About Form CT-1: https://www.irs.gov/forms-pubs/about-form-ct-1
- Instructions (2025): https://www.irs.gov/instructions/ict1
Download Form CT-1 directly: https://www.irs.gov/pub/irs-pdf/fct1.pdf
This guide is based on the official 2025 IRS Form CT-1 and Instructions (published January 2026) and Railroad Retirement Board guidance. Tax rules can change—always verify with the latest IRS publications before filing.