APPENDIX IV:  INSTRUCTIONS for FORM OE-1A  (Revised 2002)

Some examples are missing from this appendix because they could not be created in a web format.  The complete instructions are available in a printable format .

The following instructions are to assist system subordinate units in reporting creditable service and compensation and taxable earnings to the National Secretary-Treasurer or National Reporting Officer of your labor organization and in reporting and paying retirement taxes and unemployment contributions.

Form OE-1a is used to report creditable compensation and service for local units of national rail labor organizations covered under the Railroad Retirement Act (RRA).   Local lodges, divisions, unions, and federations, along with district councils, should report only employees who were previously in an employment relation to a railroad carrier and whose earnings were $25.00 or more per month.

Form OE-1a should be sent to your National Secretary-Treasurer or National Reporting Officer within 15 days after the end of the period covered by the report. DO NOT SEND FORM OE-1a TO THE RAILROAD RETIREMENT BOARD (RRB) OR TO THE INTERNAL REVENUE SERVICE (IRS).

 WHERE TO GO FOR ADDITIONAL INFORMATION

• For additional forms or questions about these instructions, contact your national organization or call a Compensation Reporting Specialist at the Railroad Retirement Board's Quality Reporting Service Center at (312) 751- 4992 or e-mail at qrsc@rrb.gov. 
  
• For questions about tax deposits, contact the CT-1 Specialist at the IRS at (913) 345-5622.

1. Name of your national organization.

2. Page number and the total number of pages included in this report.  Example:   Page 1 of 2.

3. Name and/or number of your reporting unit.

4. RRB code assigned to your type of unit. To obtain your unit code, contact your national organization.

5. Appropriate month or quarter and year. Example: Jan. 2002 or 1st Q 2002.

6. Employee's last name followed by initials of first and middle names. Also, enter employee's nine-digit social  security number.

7. Gross earnings and Tier I Medicare earnings both consist of all taxable compensation. Include only amounts earned for service to your unit.

8. Employee Medicare tax withheld from the employee's earnings. Instructions for calculating withholding amounts are in Part B of these instructions.

9. Tier I creditable retirement compensation.

10. Tier I taxes withheld from the employee's earnings.

11. Tier II creditable retirement compensation.

12. Tier II taxes withheld from the employee's earnings.

Sign and date the form. The box entitled "Date Received by NRO" is for use by the national organization.

B. INSTRUCTIONS FOR CALCULATING WITHHOLDING AMOUNTS

In October of each year, the RRB sends to each National Reporting Officer or National Secretary-Treasurer, notices of the earnings maximums and the Tier I, Tier II, and Medicare tax rates for the following year.

Enter the annual compensation maximums in the corresponding boxes on the OE-1a. Compensation should not be taxed or reported in excess of the annual compensation maximums. Tier I taxes are not assessed on earnings above the Tier I annual maximum limit and Tier II taxes are not assessed on earnings above the Tier II annual maximum limit. There is no compensation maximum for Medicare tax.

The employee pays three payroll taxes, Tier I, Tier II, and Medicare tax.  The employee and employer tax rates are the same for Tier I and Medicare taxes, but are different for Tier II.  To calculate withholding, multiply the taxable earnings by:

1. The employee Tier I tax rate to obtain the Tier I tax;
2. The employee Tier II tax rate to obtain the Tier II tax; and
3. The Medicare tax rate to obtain the Medicare tax.

The following is a calculation of employee tax withholding based upon $50.00 in earnings in a month and employee tax rates of 1.45% for Medicare, 6.2% for Tier I and 4.9% for Tier II.

C. INSTRUCTIONS FOR USE OF FORM OE-1a IN COMPLETING FORM CT-1

Form CT-1 is the IRS form used to report railroad retirement taxes. Form CT-1 is filed annually for taxes imposed on earnings paid in a calendar year. If all employees' cumulative earnings are less than the Tier II maximum, the cumulative gross earnings will also be the cumulative Tier I and cumulative Tier II earnings.

Enter the cumulative earnings totals and withholding totals in the appropriate spaces in the TAX CALCULATION WORKSHEET on the back of Form OE-1a. The cumulative totals are the sums of the totals from all Forms OE-1a filed in the year. Enter the tax rates in Items A, B, and C on the worksheet and multiply by the earnings. The items from the TAX CALCULATION WORKSHEET are in the same order and directly correspond to items on Form CT-1. Transcribe the amounts from the worksheet to Form CT-1 using the "CT-1 references" column on the worksheet as a guide.

The cumulative yearly totals reported on the CT-1 should be equal to the totals of all four (4) OE-1a's for the calendar year.

D. INSTRUCTIONS FOR USE OF FORM OE-1a IN DETERMINING TAX LIABILITY

CT-1 taxes are paid monthly with two exceptions, 1) your tax liability is more than $50,000, in which case taxes are paid more often than monthly, or 2) your tax liability is less than $2,500, in which case taxes may be paid annually. Deposits are made with a Federal Reserve Bank using Form 8109, Federal Tax Deposit Coupon or electronically using RRBLINK. Contact the IRS for Form 8109 and deposit information.

The frequency, monthly or quarterly, for filing Form OE-1a is determined by your national organization. If you file Form OE-1a monthly, the form can be used to calculate your monthly tax liability by completing Items A through G on the TAX CALCULATION WORKSHEET that is on the back of Form OE-1a. If you file Form OE-1a quarterly, the form will not have the monthly totals needed to determine monthly tax liability. If you develop the monthly earnings and withholding totals, you can enter the monthly totals in the TAX CALCULATION WORKSHEET to calculate the monthly tax liability.

If all employees' earnings are less than the Tier II maximum, another option for determining monthly tax liability is to multiply the monthly gross earnings by the combined tax rate. The combined tax rate is the sum of the six tax rates: Employee and Employer-Medicare rates, Tier I rates, and Tier II rates.  For example, the sum of the six tax rates for 2002 is 35.8%.   Multiply the monthly 2002 gross earnings by .358 to obtain the 2002 CT-1 tax liability. However, the tax rates are subject to change annually.  (See Section B of these instructions).

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