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IRS Form 941, Employer's Quarterly Federal Tax Return, is a federal tax form used by employers to report income tax, Social Security tax, and Medicare tax withheld from its employee's wages. It is also used to pay the employer's portion of the Social Security and Medicare taxes.
Schedule B, to Form 941 is the Report of Tax Liability for Semiweekly Schedule Depositors. If you were a monthly depositor, you would have three lines directly on the Form 941, Part 2, to enter your monthly tax liability for each month. As a semiweekly depositor, you must use the Schedule B as an attachment to the Form 941. Jump to section below to learn more.
Useful Information
Employers withholding federal income tax from employee wages are required by the IRS to file the Form 941 on a quarterly basis. Once you file your first Form 941, you must continue to file the form quarterly until you file a final return. This applies even if you did not pay wages in a specific quarter, unless you meet certain exceptions.
In general, if you pay wages to an employee or employees, you must file an IRS Form 941 quarterly. However, there are a few exceptions to the requirement to file.
You may not have to file a quarterly Form 941 if you:
The form is used by employers to report to the IRS on wages and tips paid, federal income taxes withheld, and employee and employer's Social security and Medicare taxes.
Other information that is reported on the Form 941 includes:
The top section of IRS Form 941 identifies your business to the IRS. To complete Form 941, you will need a valid Employer Identification Number (EIN) assigned to you by the IRS. The business name associated with your EIN goes in the box labeled Name and a "Doing Business As" (DBA), if applicable, goes in the box for Trade Name. Next, enter your business's address and check the box for the appropriate quarter in the section titled "Report for this Quarter of 20XX."
You can use information from your payroll software to fill in information in Part 1.
Part 2 requests information about your deposit schedule and tax liability for the quarter. Check the correct boxes based on your total tax. Enter your monthly tax liability on the three lines in part 2 if you are a monthly depositor. Complete Schedule B, Report of Tax Liability for Semiweekly Schedule Depositors, and attach to Form 941 if you are a semiweekly depositor.
Part 3 asks questions about your business. If it's your final return, check the box on line 17. If you are a seasonal employer and will be skipping other quarters, check the box on line 18. Lines 19 to 28 ask questions about sick or family leave.
Part 4 designates an employee, a tax preparer, or another person to discuss the form with the IRS.
Part 5 is where you'll need to sign your name to indicate the information is accurate to the best of your knowledge, under penalty of perjury. A paid preparer completes the bottom section, if applicable. You must complete all three pages of the Form 941 and sign on the third page, or your form may not be processed by the IRS.
IRS Form 941 needs to be filed quarterly. It is due at the end of the month following the last day of the quarter. For wages paid during the first quarter of the calendar year, January to March, the due date is April 30. For the second quarter of April to June, the due date is July 31. For the third quarter of July to September, the due date is October 31. For the fourth quarter of October to December, the due date is January 31.
If any filing date falls on a federal holiday or weekend, the Form 941 is due on the following business day. If you made complete and timely deposits of withheld taxes during the previous quarter, you may file by the 10th day of the 2nd month following last day of the quarter. If you mailed the form and it was postmarked by its filing deadline, it will be considered filed on time, even if it does not arrive by that date.
The IRS highly recommends using its e-file, if possible. You can e-file at this IRS link. E-file should still be an option, even if you choose to use a tax preparation software or tax professional.
When filing a hardcopy of the form in the mail, the IRS address you mail it to depends on the state you live in and whether or not you are including tax payments with the form.
You can also make tax payments electronically on the Electronic Federal Tax Payment System (EFTPS).
If you believe your employment taxes will be $1,000 or less for the entire year, you may request to file IRS Form 944, Employer's ANNUAL Federal Tax Return instead of IRS Form 941, Employer's Quarterly Federal Tax Return. You can call the IRS directly at 800-829-4933 between January 1 and April 1 or mail a written request postmarked by the postal service between January 1 and March 15.
The IRS Form 941 treatment for selling, merging, transferring, or closing your business is different.
In the quarter of the sale, both you and the new owners must file a Form 941. You should report only the wages you paid in the quarter.
The continuing business should file a Form 941 for the quarter of the merger. The other business should file a final return.
It is considered a transfer if you change the form of your business. For example, a transfer occurs if you transfer from a sole proprietorship to a partnership.
If this happens, attach a statement to your Form 941 in the quarter of the transfer. The statement should list the new owner's name, new form of business, date of change, and the name and address of person keeping payroll records.
When you close your business, you must file a final return. On the Form 941, check the box on line 17 and enter the final date you paid wages to employees. You should also attach a statement including the name and address of the person who will be keeping payroll records.
You have to deposit federal income tax withheld if your total taxes after adjustments and nonrefundable credits total $2,500 or more for the current and prior quarters.
If your total taxes after adjustments and nonrefundable credits are less than $2,500 and you did not incur a $100,000 next-day deposit obligation during the quarter, you do not have to make employment tax deposits. You can simply pay the tax liability in full when you file your tax return.
The IRS identifies two different categories of businesses: monthly or semiweekly schedule depositor. The deposit schedule is not determined by your business's payroll schedule. The required deposit schedules vary based on the total amount of your employment taxes over the prior four quarters.
If your taxes from the previous four-quarter lookback period totaled $50,000 or less, you are a monthly depositor.
If your taxes from the previous four-quarter lookback period totaled more than $50,000, you are a semiweekly depositor.
You can avoid penalties and interest by depositing your taxes when they are due, filing your Form 941 on time, and accurately reporting all details on tax forms furnished to the IRS and your employees. Penalties and interest charges arise from both filing your 941 late or paying your employment tax deposits late.
If you don't have enough employee funds available to withhold by the 10th of the month following the month you received an employee's report on tips, you no longer have to collect it.
Instead, you should report the entire amount of tips on line 5b Taxable Social Security tips, 5c Taxable Medicare wages & tips, and, if applicable, line 5d Taxable wages & tips subject to Additional Medicare tax withholding. Also include the total uncollected employee's share of the social security and Medicare taxes as a negative adjustment on line 9.
Total tax before adjustments is the sum of your total federal income tax, total social security and Medicare tax, and any tax due under a Section 3121(q) Notice and Demand.
Total tax after adjustments takes into account the adjustments for fractions of cents due to rounding, and adjustments for sick pay, tips, and group-term life insurance.
Enter positive or negative adjustments due to rounding relating to the employee's portion of Medicare and social security taxes withheld on line 7 of Form 941.
Enter a negative adjustment on line 8 of Form 941 if you had a third-party payer of sick pay who isn't your agent, such as an insurance company, who transfers the liability of the employer's portion of Medicare and social security taxes to you.
Enter a negative adjustment on line 9 for any uncollected employee's share of Medicare and social security taxes on tips or group-term life insurance premiums paid for former employees.
To fill out Schedule B, enter your EIN, legal business name, and calendar year at the top of the form. Check the box for the quarter you are filing. Then, enter your daily tax liability into the numbered space that corresponds to the date the wages were paid. There are three months and 31 spaces for each month.
For example, if you were filling out the form for quarter 2, month 1 would correspond with April, month 2 with May, and month 3 with June. Tax liability corresponding with April 15 would be entered in the month 1, number 15 box.
After you've entered the daily tax liability details, you can add up the total tax liability for each month. The sum of the three months is entered in the final box, total liability for the quarter. This information must equal line 12 on Form 941.
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