Rev. Proc. 75-9

Section 1. Purpose

The purpose of this Revenue Procedure is to provide instructions for the computation of employer tax and employee tax to be reported on Form CT-1, Employer's Quarterly Railroad Retirement Tax Return--1975, and employee representative tax to be reported on Form CT-2, Employee Representative's Quarterly Railroad Retirement Tax Return--1975, under the Railroad Retirement Tax Act (chapter 22, subtitle C, Internal Revenue Code of 1954), with respect to compensation paid during 1975 for services rendered after 1969 and before 1974. (For services rendered before 1970 see Rev. Proc. 71-3, 1971-1 C.B. 659.)

Sec. 2. Background

The January 1975 revision of Form CT-1 and Form CT-2 will provide entry spaces and rates for computing tax with respect to compensation for services rendered after 1973. Because of the infrequency of payments of compensation for services rendered before 1974, the forms do not provide a schedule for computation of tax with respect to such compensation. Instead, a single entry line is provided for the reporting of such tax, which may be computed by reference to this Revenue Procedure. Forms CT-1 and CT-2 provide space for computation of the supplemental tax based on man-hours, for services rendered after October 31, 1966. Accordingly, no provision is made in this Revenue Procedure for the computation of the supplemental tax.

Sec. 3. Maximum Amount of Compensation Earned in a Month That is Subject to Tax

The employee tax, employer tax, and employee representative tax apply to compensation that does not exceed the amount shown below, for services rendered in a calendar month:

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If in any calendar month an individual renders services as an employee representative and as an employee, and if the total compensation paid to him for the services exceeds the monthly maximum, the measure of the employee representative tax is the monthly maximum minus the amount of compensation paid to him for services rendered during the month as an employee.

Sec. 4. Computation of Employer Tax and Employee Tax

The schedule shown below is provided as a guide for computing the employer tax and employee tax applicable to compensation paid during 1975 for services rendered after 1969 and before 1974.

1. Computation of employee tax on compensation for services rendered after 1969 and before 1974:

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Sec. 5. Computation of Employee Representative Tax

The rates shown below are applicable to compensation paid during 1975 for services rendered after 1969 and before 1974 as an employee representative.

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