Irs form 491

Irs form 491 DEFAULT

 

Question

We're about to hire employees and need to know how much federal income tax to withhold and where to send this money along with other employment taxes?

Answer

You'll need to:

  • Secure a completed Form W-4, Employee's Withholding Certificate from each employee to know how much federal income tax to withhold from your employee's wages.
  • Use Publication 15, (Circular E), Employer's Tax Guide, Publication 15-A, Employer's Supplemental Tax Guide, and Publication 15-T, Federal Income Tax Withholding Methods to determine the amount of withholding and the directions on depositing the withheld amounts and other employment taxes.  Also, refer to Form 941, Employer's QUARTERLY Federal Tax Return and the Instructions for Form 941, or Form 944, Employer's ANNUAL Federal Tax Return and the Instructions for Form 944, or Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return and the Instructions for Form 940.

Generally, employers are required to file Forms 941 quarterly. However, some small employers (those whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less for the year) may file Form 944 annually instead of Forms 941. See the Instructions for Form 944 for more information. Employers are also generally required to file Form 940 annually. See Topic 759 for more information about Form 940. Employers must also file a Form W-2, Wage and Tax Statement annually for each employee along with a Form W-3, Transmittal of Wage and Tax Statements, and furnish a copy of the Form W-2 to the employee.

Monthly or semiweekly deposits may be required for taxes reported on Form 941 (or Form 944), and quarterly deposits may be required for taxes reported on Form 940. Employers should consult each form’s instructions or Publication 15 to determine when and how to make deposits.

The Modernized e-File (MeF) for Employment Taxes and E-File Employment Tax Forms pages offer ways to file Forms 940, 941, and 944 electronically. Prospective participants must first complete and submit an IRS e-file application. You can complete the IRS e-file application online after registering for e-services. Employers must deposit all employment taxes electronically by electronic funds transfer (EFT). For more information on making federal tax deposits, see section 11 of Publication 15.

Sours: https://www.irs.gov/faqs/small-business-self-employed-other-business/forms-940-941-944-and-1040-sch-h-employment-taxes/forms-940-941-944-and-1040-sch-h-employment-taxes

Topic No. 758 Form 941 – Employer's Quarterly Federal Tax Return and Form 944 – Employer's Annual Federal Tax Return

Generally, you must file Form 941, Employer's QUARTERLY Federal Tax Return or Form 944, Employer's ANNUAL Federal Tax Return to report wages you've paid and tips your employees have reported to you, as well as employment taxes (federal income tax withheld, social security and Medicare taxes withheld, and your share of social security and Medicare taxes). Only small business employers who've been notified by the IRS to file Form 944 may file it. To report wages and taxes for farm employees, you must file Form 943, Employer's Annual Tax Return for Agricultural Employees. See Topic No. 760 for reporting and deposit requirements for agricultural employers. For information about e-filing, please see E-file Employment Tax Forms.

Form 941

You're required to file a separate Form 941 for each quarter (first quarter - January through March, second quarter - April through June, third quarter - July through September, fourth quarter - October through December). Form 941 is generally due by the last day of the month following the end of the quarter. For example, you're required to file Form 941 by April 30 for wages you pay during the first quarter, January through March.

If the due date for filing a return falls on a Saturday, Sunday, or legal holiday, you may file the return on the next business day. The term legal holiday means any legal holiday in the District of Columbia. For a list of legal holidays, see Chapter 11 of Publication 15, (Circular E), Employer's Tax Guide.

Form 944

Some employers with small payrolls, including government employers, may file an annual return, Form 944 instead of Form 941 each quarter, if you are eligible and properly so indicated on your Form SS-4, Application for an Employer Identification Number. Form 944 is designed for employers with an annual employment tax liability of $1,000 or less. Form 944 generally is due on January 31 of the following year. The purpose of Form 944 is to reduce burden on small employers by allowing them to file one return per year, and in most cases pay the employment tax with the return.

Employers may be eligible to file Form 944 if their estimated annual employment tax liability is $1,000 or less. If an employer's employment tax liability is expected to be $1,000 or less and the employer wants to file Form 944, but did not indicate this on the Form SS-4, the employer must contact the IRS to request to file Form 944. Employers aren't permitted to file Form 944 unless they are notified by the IRS to do so. Employers required to file Form 944, who want to file Forms 941 instead, must notify the IRS to request to file quarterly Forms 941 and receive approval to do so. See the Instructions for Form 944 for more information.

Employers notified to file Form 944, whose businesses grow during the year and whose employment tax liability exceeds the $1,000 threshold, must still file Form 944 for the year. Employers who exceed the eligibility threshold must not file Form 941 until the IRS notifies them that their filing requirement has been changed to Form 941. For information on requesting to file Forms 941 quarterly or Form 944 annually to report your social security, Medicare, and withheld federal income taxes, refer to the Instructions for Form 944 PDF and the Instructions for Form 941 PDF.

Depositing Taxes

Generally, employers are required to deposit their employment taxes rather than pay the taxes when the Form 941 or Form 944 is filed. For the rules for making deposits, refer to Publication 15,Topic No. 757 and Deferral of employment tax deposits and payments through December 31, 2020. If you've deposited all your taxes on time, you have ten additional days after the due date of the return to file.

Adjustments and Corrections - In certain cases, you must adjust amounts reported as social security and Medicare taxes to arrive at your correct tax liability. For example, the total social security and Medicare taxes on Form 941 or Form 944 may differ by a small amount from the total on your payroll records due to fractions of cents that you gained or lost by rounding each time you computed payroll for each individual employee. You may add or subtract this difference on the line for fractions-of-cents adjustments. You may also use an adjustment line to report the social security and Medicare taxes you were unable to collect on employees' tips, or for sick pay wages for which social security and Medicare taxes were withheld by a third party, such as an insurance company. If you wish to correct an error on a previously filed Form 941 or Form 944, use Form 941-X, Adjusted Employer's QUARTERLY Federal Tax Return or Claim for Refund or Form 944-X, Adjusted Employer's ANNUAL Federal Tax Return or Claim for Refund, respectively.

Calculating the Taxes - The federal income tax withheld and social security and Medicare taxes are added together on Form 941 and Form 944. The resulting net tax is the amount of employment taxes you owe for the quarter (Form 941) or the year (Form 944). Refer to Notice 2020-65 PDF and Notice 2021-11 PDF for information allowing employers to defer withholding and payment of the employee's share of Social Security taxes of certain employees. If this amount is $2,500 or more, complete the tax liability for each month in Part 2 of Form 941 and Form 944, if you're a monthly schedule depositor. If you file Form 941 and are a semiweekly depositor, then report your tax liability on Schedule B (Form 941), Report of Tax Liability for Semiweekly Schedule Depositors. If you file Form 944 and are a semiweekly depositor, then report your tax liability on Form 945-A, Annual Record of Federal Tax Liability. The purpose of Part 2 of Form 941, Part 2 of Form 944, Schedule B (Form 941), and Form 945-A (if filing Form 944) is to show the tax liability for that payday. The IRS uses this information to determine if you deposited your employment taxes on time.

Deposit Schedules - For monthly depositors, you must show the combined amount of social security, Medicare and withheld federal income taxes owed for each month in Part 2 of Form 941 or Part 2 of Form 944. For semiweekly depositors, you must show the combined amount of social security, Medicare and withheld federal income taxes owed for each day on Schedule B (Form 941) or Form 945-A (if filing Form 944). You become liable for employment taxes when you pay the employees their wages, not when the pay period ends. For example, if your pay period ends September 24 but you don't pay the employees until October 1, their wages would be reported in the fourth quarter when you actually paid the employees their wages and became liable for the tax, not the third quarter when the pay period ended.

Penalties - It's very important that you complete Part 2 of Form 941 or Form 944, Schedule B (Form 941), or Form 945-A (if filing Form 944) correctly, or it may appear that you didn't deposit your taxes when due. There's a late deposit penalty ranging from 2% to 15% depending on the length of time the deposit is late.

Generally, unless you're eligible to pay taxes with your return, you should have deposited your taxes and shouldn't have a balance due with Form 941 and Form 944. If you pay taxes with your tax return that should have been deposited, you may be subject to a penalty. See Topic No. 757 and Publication 15 for rules on deposits and payment of tax with your return. Be sure to sign and date Form 941 or Form 944 before mailing.

Additional Information

See Publication 15, (Circular E), Employer's Tax Guide for more information on filing requirements for Form 941 and Form 944.

Sours: https://www.irs.gov/taxtopics/tc758
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Instructions for Form 941 (06/2021)

 

  • Instructions for Form 941 - Introductory Material
  • General Instructions:
  • Specific Instructions:
    • Part 1: Answer These Questions for This Quarter
      • 1. Number of Employees Who Received Wages, Tips, or Other Compensation
      • 2. Wages, Tips, and Other Compensation
      • 3. Federal Income Tax Withheld From Wages, Tips, and Other Compensation
      • 4. If No Wages, Tips, and Other Compensation Are Subject to Social Security or Medicare Tax . . .
      • 5a–5e. Taxable Social Security and Medicare Wages and Tips
      • 5f. Section 3121(q) Notice and Demand—Tax Due on Unreported Tips
      • 6. Total Taxes Before Adjustments
      • 7–9. Tax Adjustments
      • 10. Total Taxes After Adjustments
      • 11a. Qualified Small Business Payroll Tax Credit for Increasing Research Activities
      • 11b. Nonrefundable Portion of Credit for Qualified Sick and Family Leave Wages for Leave Taken Before April 1, 2021
      • 11c. Nonrefundable Portion of Employee Retention Credit
      • 11d. Nonrefundable Portion of Credit for Qualified Sick and Family Leave Wages for Leave Taken After March 31, 2021
      • 11e. Nonrefundable Portion of COBRA Premium Assistance Credit
      • 11f. Number of Individuals Provided COBRA Premium Assistance
      • 11g. Total Nonrefundable Credits
      • 12. Total Taxes After Adjustments and Nonrefundable Credits
      • 13a. Total Deposits for This Quarter
      • 13c. Refundable Portion of Credit for Qualified Sick and Family Leave Wages for Leave Taken Before April 1, 2021
      • 13d. Refundable Portion of Employee Retention Credit
      • 13e. Refundable Portion of Credit for Qualified Sick and Family Leave Wages for Leave Taken After March 31, 2021
      • 13f. Refundable Portion of COBRA Premium Assistance Credit
      • 13g. Total Deposits and Refundable Credits
      • 13h. Total Advances Received From Filing Form(s) 7200 for the Quarter
      • 13i. Total Deposits and Refundable Credits Less Advances
      • 14. Balance Due
      • What if you can't pay in full?
      • 15. Overpayment
    • Part 2: Tell Us About Your Deposit Schedule and Tax Liability for This Quarter
      • 16. Tax Liability for the Quarter
        • De minimis exception.
        • Monthly schedule depositor.
        • Semiweekly schedule depositor.
        • Adjusting tax liability for nonrefundable credits claimed on lines 11a, 11b, 11c, 11d, and 11e.
    • Part 3: Tell Us About Your Business
    • Part 4: May We Speak With Your Third-Party Designee?
    • Part 5: Sign Here (Approved Roles)
    • How To Get Forms, Instructions, and Publications
    • Worksheet 1. Credit for Qualified Sick and Family Leave Wages for Leave Taken Before April 1, 2021
    • Worksheet 2. Employee Retention Credit for the Second Quarter of 2021 Only (Wages Paid After March 31, 2021, and Before July 1, 2021)
    • Worksheet 3. Credit for Qualified Sick and Family Leave Wages for Leave Taken After March 31, 2021
    • Worksheet 4. Employee Retention Credit for Third and Fourth Quarters of 2021 Only (Qualified Wages Paid After June 30, 2021)
    • Worksheet 5. COBRA Premium Assistance Credit

Employer's QUARTERLY Federal Tax Return

Section references are to the Internal Revenue Code unless otherwise noted.


Future Developments

For the latest information about developments related to Form 941 and its instructions, such as legislation enacted after they were published, go to IRS.gov/Form941.

What's New

The COVID-19 related credit for qualified sick and family leave wages has been extended and amended.

The American Rescue Plan Act of 2021 (the ARP) adds new sections 3131, 3132, and 3133 to the Internal Revenue Code to provide credits for qualified sick and family leave wages similar to the credits that were previously enacted under the Families First Coronavirus Response Act (FFCRA) and amended and extended by the COVID-related Tax Relief Act of 2020. The credits under sections 3131 and 3132 are available for qualified leave wages paid for leave taken after March 31, 2021, and before October 1, 2021. Below are the major changes made under the ARP.

  • The ARP keeps the daily wage thresholds that previously existed. The aggregate cap on qualified sick leave wages remains at 80 hours (10 days), but the limitation on the number of days resets with respect to leave taken by employees beginning on April 1, 2021. The aggregate cap on qualified family leave wages increases to $12,000 from the previous cap of $10,000, and the aggregate cap resets with respect to leave taken by employees beginning on April 1, 2021.

  • The ARP also created a new category of leave under the Emergency Paid Sick Leave Act (EPSLA) and the Expanded Family and Medical Leave Act (Expanded FMLA) to include the time the employee is seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19 (and the employee has been exposed to COVID-19 or the employee’s employer has requested such test or diagnosis), or the employee is obtaining immunizations related to COVID-19 or recovering from an injury, disability, illness, or condition related to such immunization. Additionally, employers may provide employees with paid family leave if the employee is unable to work due to any of the conditions for which eligible employers may provide paid sick leave under the EPSLA.

  • The credits are still increased by the qualified health plan expenses allocable to the qualified sick and family leave wages, but the credits are now also increased, subject to the qualified leave wage limitations, by certain amounts paid under collective bargaining agreements that are properly allocable to the qualified leave wages. The collectively bargained contributions paid by an eligible employer that are eligible for the credit are collectively bargained defined benefit pension plan contributions and collectively bargained apprenticeship program contributions that are properly allocable to qualified leave wages.

  • Under section 3133, the credits are increased by the amount of the employer share of social security tax and Medicare tax on the qualified sick and family leave wages.

  • Governmental employers (except for the federal government and its agencies and instrumentalities unless described in section 501(c)(1)) may now claim the credits.

  • Generally, the same wages can’t be used as both qualified sick leave wages and qualified family leave wages. Additionally, you may not benefit from both the credit for qualified sick and family leave wages and the employee retention credit with respect to the same wages. The credit for qualified sick leave wages and qualified family leave wages doesn't apply to wages taken into account as payroll costs for a Small Business Interruption Loan under the Paycheck Protection Program (PPP) that is forgiven or in connection with shuttered operator grants and restaurant revitalization grants.

  • The credit for qualified sick and family leave wages isn’t allowed in a quarter in which the employer provides the leave in a manner that discriminates in favor of highly compensated employees, full-time employees, or employees on the basis of employment tenure. See Highly compensated employee, later, for the definition.

How you report qualified sick and family leave wages and the credit for qualified sick and family leave wages has changed. Taxable qualified sick and family leave wages for leave taken after March 31, 2021, are included on line 5a and taxed at 12.4% for social security tax purposes. However, if you’re reporting any qualified sick and family leave wages for leave taken before April 1, 2021, these wages are reported on lines 5a(i) and 5a(ii), respectively, and taxed at 6.2% for social security tax purposes. For leave taken before April 1, 2021, the credit for qualified sick and family leave wages is reported on line 11b (nonrefundable portion) and, if applicable, line 13c (refundable portion). For leave taken after March 31, 2021, the credit for qualified sick and family leave wages is reported on line 11d (nonrefundable portion) and, if applicable, line 13e (refundable portion); and the nonrefundable portion of the credit is against the employer share of Medicare tax. For more information, see the instructions for line 11b, line 11d, line 13c, and line 13e, later.

Use Worksheet 1 to figure the credit for leave taken before April 1, 2021. Use Worksheet 3 to figure the credit for leave taken after March 31, 2021. For more information about the credit for qualified sick and family leave wages, go to IRS.gov/PLC.

The COVID-19 related employee retention credit has been extended and amended.

The ARP adds new section 3134 to the Internal Revenue Code to provide an employee retention credit similar to the credit that was previously enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and amended and extended by the Taxpayer Certainty and Disaster Tax Relief Act of 2020. The employee retention credit is available for qualified wages paid before January 1, 2022. Generally, the rules for the employee retention credit for the second quarter of 2021 and third and fourth quarters of 2021 are substantially similar. However, the following changes under the ARP begin July 1, 2021, and are applicable for only the third and fourth quarters of 2021.

  • The ARP creates a new category of an eligible employer called a recovery startup business. For more information, see Recovery startup business, later.

  • Qualified wages for the employee retention credit under section 3134 don't include wages taken into account for credits under sections 41, 45A, 45P, 45S, 51, 1396, 3131, and 3132. Additionally, qualified wages for the employee retention credit can't include amounts used as payroll costs for a Small Business Interruption Loan under the PPP that is forgiven or amounts used as payroll costs for shuttered operator grants and restaurant revitalization grants.

For wages paid before July 1, 2021, the nonrefundable portion of the employee retention credit is against the employer share of social security tax. However, for wages paid after June 30, 2021, the nonrefundable portion of the employee retention credit is against the employer share of Medicare tax. The nonrefundable portion of the credit is still claimed on line 11c and, if applicable, the refundable portion of the credit is still claimed on line 13d. For more information, see the instructions for line 11c and line 13d, later. Use Worksheet 2 to figure the credit for wages paid before July 1, 2021 (second quarter). Use Worksheet 4 to figure the credit for wages paid after June 30, 2021, and before January 1, 2022 (third and fourth quarters).

See Notice 2021-23, 2021-16 I.R.B. 1113, available at IRS.gov/irb/2021-16_IRB#NOT-2021-23, for guidance on the employee retention credit provided under section 2301 of the CARES Act, as amended by section 207 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, for qualified wages paid after December 31, 2020, and before July 1, 2021. The IRS expects to issue guidance about the employee retention credit provided under the ARP for wages paid after June 30, 2021, and before January 1, 2022, later this year. A link to any new guidance issued will be posted at IRS.gov/ERC.

New credit for COBRA premium assistance payments.

Section 9501 of the ARP provides for COBRA premium assistance in the form of a full reduction in the premium otherwise payable by certain individuals and their families who elect COBRA continuation coverage due to a loss of coverage as the result of a reduction in hours or an involuntary termination of employment (assistance eligible individuals). This COBRA premium assistance is available for periods of coverage beginning on or after April 1, 2021, through periods of coverage beginning on or before September 30, 2021. However, the COBRA premium assistance credit could be claimed on employment tax returns for the second, third, or fourth quarter of 2021, depending on when the employer (or other person) becomes entitled to the credit. Some multiemployer plans and insurers don't normally file an employment tax return but will need to file one if they want to claim the COBRA premium assistance credit.

Section 9501(b) of the ARP adds new section 6432 to the Internal Revenue Code that allows a credit (COBRA premium assistance credit) against the employer share of Medicare tax for each calendar quarter in an amount equal to the premiums not paid by assistance eligible individuals for COBRA continuation coverage by reason of section 9501(a)(1) of the ARP. The nonrefundable portion of the credit is reported on line 11e and, if applicable, the refundable portion of the credit is reported on line 13f. If you claim this credit, you must also report the number of individuals provided COBRA premium assistance on line 11f. Use Worksheet 5 to figure the credit. For more information, see the instructions for line 11e, line 11f, and line 13f, later. For more information on COBRA premium assistance payments and the credit, see Notice 2021-31, 2021-23 I.R.B. 1173, available at IRS.gov/irb/2021-23_IRB#NOT-2021-31.

Advance payment of COVID-19 credits extended.

Based on the extensions of the credit for qualified sick and family leave wages and the employee retention credit, and the new credit for COBRA premium assistance payments, discussed above, Form 7200, Advance Payment of Employer Credits Due to COVID-19, may be filed to request an advance payment. For more information, including information on which employers are eligible to request an advance payment, the deadlines for requesting an advance, and the amount that can be advanced, see the Instructions for Form 7200.

Reminders

.This is an Image: caution.gifDon't use an earlier revision of Form 941 to report taxes for 2021. Use the March 2021 revision of Form 941 only to report taxes for the quarter ending March 31, 2021. The IRS expects the June 2021 revision of Form 941 and these instructions to be used for the second, third, and fourth quarters of 2021. If changes in law require additional changes to Form 941, the form and/or these instructions may be revised. Prior revisions of Form 941 are available at IRS.gov/Form941 (select the link for "All Form 941 Revisions" under "Other Items You May Find Useful")..

Social security and Medicare tax for 2021.

The rate of social security tax on taxable wages, including qualified sick leave wages and qualified family leave wages for leave taken after March 31, 2021, is 6.2% each for the employer and employee or 12.4% for both. Qualified sick leave wages and qualified family leave wages for leave taken before April 1, 2021, aren't subject to the employer share of social security tax; therefore, the tax rate on these wages is 6.2%. The social security wage base limit is $142,800.

The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2020. There is no wage base limit for Medicare tax.

Social security and Medicare taxes apply to the wages of household workers you pay $2,300 or more in cash wages in 2021. Social security and Medicare taxes apply to election workers who are paid $2,000 or more in cash or an equivalent form of compensation in 2021.

New payroll tax credit for certain tax-exempt organizations affected by qualified disasters.

Section 303(d) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 allows for a new payroll tax credit for certain tax-exempt organizations affected by certain qualified disasters not related to COVID-19. This new credit will be claimed on new Form 5884-D (not on Form 941). Form 5884-D is filed after the Form 941 for the quarter for which the credit is being claimed has been filed. If you will claim this credit on Form 5884-D for a calendar quarter of 2021 and you're also claiming a credit for qualified sick and family leave wages for leave taken before April 1, 2021, and/or the employee retention credit in the second quarter of 2021, you must include any credit that will be claimed on Form 5884-D on Worksheet 1 and/or Worksheet 2, respectively, for that quarter. For more information about this credit, go to IRS.gov/Form5884D.

Deferral of the employer share of social security tax expired.

The CARES Act allowed employers to defer the deposit and payment of the employer share of social security tax. The deferred amount of the employer share of social security tax was only available for deposits due on or after March 27, 2020, and before January 1, 2021, as well as deposits and payments due after January 1, 2021, that are required for wages paid on or after March 27, 2020, and before January 1, 2021. One‐half of the employer share of social security tax is due by December 31, 2021, and the remainder is due by December 31, 2022. Because both December 31, 2021, and December 31, 2022, are nonbusiness days, payments made on the next business day will be considered timely. Any payments or deposits you make before December 31, 2021, are first applied against your payment due on December 31, 2021, and then applied against your payment due on December 31, 2022. For more information about the deferral of employment tax deposits, go to IRS.gov/ETD. See Paying the deferred amount of the employer share of social security tax and How to pay the deferred amount of the employer and employee share of social security tax, later, for information about paying the deferred amount of the employer share of social security tax.

Deferral of the employee share of social security tax expired.

The Presidential Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID‐19 Disaster, issued on August 8, 2020, directed the Secretary of the Treasury to defer the withholding, deposit, and payment of the employee share of social security tax on wages paid during the period from September 1, 2020, through December 31, 2020. The deferral of the withholding and payment of the employee share of social security tax was available for employees whose social security wages paid for a biweekly pay period were less than $4,000, or the equivalent threshold amount for other pay periods. The COVID-related Tax Relief Act of 2020 defers the due date for the withholding and payment of the employee share of social security tax until the period beginning on January 1, 2021, and ending on December 31, 2021. For more information about the deferral of employee social security tax, see Notice 2020‐65, 2020‐38 I.R.B. 567, available at IRS.gov/irb/2020-38_IRB#NOT-2020-65, and Notice 2021-11, 2021-06 I.R.B. 827, available at IRS.gov/irb/2021-06_IRB#NOT-2021-11. Also see Paying the deferred amount of the employee share of social security tax and How to pay the deferred amount of the employer and employee share of social security tax, later, for information about paying the deferred amount of the employee share of social security tax. For information about how to report the deferred amount of the employee share of social security tax on Form W‐2 and Form W‐2c for 2020, see IRS.gov/FormW2 and the 2021 General Instructions for Forms W‐2 and W‐3.

Paying the deferred amount of the employer share of social security tax.

One-half of the employer share of social security tax is due by December 31, 2021, and the remainder is due by December 31, 2022. Because both December 31, 2021, and December 31, 2022, are nonbusiness days, payments made on the next business day will be considered timely. Any payments or deposits you make before December 31, 2021, are first applied against your payment due on December 31, 2021, and then applied against your payment due on December 31, 2022. For example, if your employer share of social security tax for the third quarter of 2020 was $20,000 and you deposited $5,000 of the $20,000 during the third quarter of 2020 and you deferred $15,000 on Form 941, line 13b, then you must pay $5,000 by December 31, 2021, and $10,000 by December 31, 2022. However, if your employer share of social security tax for the third quarter of 2020 was $20,000 and you deposited $15,000 of the $20,000 during the third quarter of 2020 and you deferred $5,000 on Form 941, line 13b, then you don’t need to pay any deferred amount by December 31, 2021, because 50% of the amount that could have been deferred ($10,000) has already been paid and is first applied against your payment that would be due on December 31, 2021. Accordingly, you must pay the $5,000 deferral by December 31, 2022. Payment of the deferral isn't reported on Form 941. For additional information, go to IRS.gov/ETD.

Paying the deferred amount of the employee share of social security tax.

The due date for the withholding and payment of the employee share of social security tax is postponed until the period beginning on January 1, 2021, and ending on December 31, 2021. The employer must withhold and pay the total deferred employee share of social security tax ratably from wages paid to the employee between January 1, 2021, and December 31, 2021. If necessary, the employer may make arrangements to otherwise collect the total deferred taxes from the employee. The employer is liable to pay the deferred taxes to the IRS and must do so before January 1, 2022, to avoid interest, penalties, and additions to tax on those amounts. Because January 1, 2022, is a nonbusiness day, payments made on January 3, 2022, will be considered timely. Payment of the deferral isn't reported on Form 941. For more information about the deferral of the employee share of social security tax, see Notice 2020-65 and Notice 2021-11.

How to pay the deferred amount of the employer and employee share of social security tax.

You may pay the amount you owe electronically using the Electronic Federal Tax Payment System (EFTPS), by credit or debit card, or by a check or money order. The preferred method of payment is EFTPS. For more information, go to EFTPS.gov, or call 800- 555-4477 or 800-733-4829 (TDD). To pay the deferred amount using EFTPS, select Form 941, the calendar quarter in 2020 to which the payment relates, and the option to pay the deferred amount.

To pay by credit or debit card, go to IRS.gov/PayByCard. If you pay by check or money order, include a 2020 Form 941-V, Payment Voucher, for the quarter in which you originally deferred the deposit and payment. Darken the circle identifying the quarter for which the payment is being made. The 2020 Form 941-V is on page 5 of Form 941 and is available at IRS.gov/Form941 (select the link for "All Form 941 Revisions" under "Other Items You May Find Useful"). Make the check or money order payable to "United States Treasury." Enter your EIN, "Form 941," and the calendar quarter in which you originally deferred the deposit and payment (for example, "2nd Quarter 2020").

Payments should be sent to:

Department of the Treasury Department of the Treasury
Internal Revenue Serviceor Internal Revenue Service
Ogden, UT 84201-0030Kansas City, MO 64999-0030

Send your payment to the address above that is in the same state as the address to which you would mail returns filed without a payment, as shown under Where Should You File, later. For more information about the deferral of social security tax, go to IRS.gov/ETD and see Notice 2020-65 and Notice 2021-11.

2021 withholding tables.

The federal income tax withholding tables are included in Pub. 15-T, Federal Income Tax Withholding Methods.

Qualified small business payroll tax credit for increasing research activities.

For tax years beginning after 2015, a qualified small business may elect to claim up to $250,000 of its credit for increasing research activities as a payroll tax credit against the employer share of social security tax. The payroll tax credit election must be made on or before the due date of the originally filed income tax return (including extensions). The portion of the credit used against the employer share of social security tax is allowed in the first calendar quarter beginning after the date that the qualified small business filed its income tax return. The election and determination of the credit amount that will be used against the employer share of social security tax are made on Form 6765, Credit for Increasing Research Activities. The amount from Form 6765, line 44, must then be reported on Form 8974, Qualified Small Business Payroll Tax Credit for Increasing Research Activities. Form 8974 is used to determine the amount of the credit that can be used in the current quarter. The amount from Form 8974, line 12, is reported on Form 941, line 11a. If you’re claiming the research payroll tax credit on your Form 941, you must attach Form 8974 to that Form 941. For more information about the payroll tax credit, see Notice 2017-23, 2017-16 I.R.B. 1100, available at IRS.gov/irb/2017-16_IRB#NOT-2017-23, and IRS.gov/ResearchPayrollTC. Also see Adjusting tax liability for nonrefundable credits claimed on lines 11a, 11b, 11c, 11d, and 11e, later.

Certification program for professional employer organizations (PEOs).

The Stephen Beck, Jr., ABLE Act of 2014 required the IRS to establish a voluntary certification program for PEOs. PEOs handle various payroll administration and tax reporting responsibilities for their business clients and are typically paid a fee based on payroll costs. To become and remain certified under the certification program, certified professional employer organizations (CPEOs) must meet various requirements described in sections 3511 and 7705 and related published guidance. Certification as a CPEO may affect the employment tax liabilities of both the CPEO and its customers. A CPEO is generally treated for employment tax purposes as the employer of any individual who performs services for a customer of the CPEO and is covered by a contract described in section 7705(e)(2) between the CPEO and the customer (CPEO contract), but only for wages and other compensation paid to the individual by the CPEO. To become a CPEO, the organization must apply through the IRS Online Registration System. For more information or to apply to become a CPEO, go to IRS.gov/CPEO.

CPEOs must generally file Form 941 and Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers, electronically. For more information about a CPEO’s requirement to file electronically, see Rev. Proc. 2017-14, 2017-3 I.R.B. 426, available at IRS.gov/irb/2017-03_IRB#RP-2017-14.

Outsourcing payroll duties.

Generally, as an employer, you're responsible to ensure that tax returns are filed and deposits and payments are made, even if you contract with a third party to perform these acts. You remain responsible if the third party fails to perform any required action. Before you choose to outsource any of your payroll and related tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a third-party payer, such as a payroll service provider or reporting agent, go to IRS.gov/OutsourcingPayrollDuties for helpful information on this topic. If a CPEO pays wages and other compensation to an individual performing services for you, and the services are covered by a contract described in section 7705(e)(2) between you and the CPEO (CPEO contract), then the CPEO is generally treated for employment tax purposes as the employer, but only for wages and other compensation paid to the individual by the CPEO. However, with respect to certain employees covered by a CPEO contract, you may also be treated as an employer of the employees and, consequently, may also be liable for federal employment taxes imposed on wages and other compensation paid by the CPEO to such employees. For more information on the different types of third-party payer arrangements, see section 16 of Pub. 15.

COVID-19 employment tax credits when return filed by a third-party payer.

If you're the common-law employer of the individuals that are paid qualified sick or family leave wages, paid wages qualifying for the employee retention credit, and/or provided COBRA premium assistance, you're entitled to the credit for the sick and family leave wages, the employee retention credit, and/or the COBRA premium assistance credit, regardless of whether you use a third-party payer (such as a PEO, CPEO, or section 3504 agent) to report and pay your federal employment taxes. The third-party payer isn't entitled to the credits with respect to the wages and taxes it remits on your behalf, or the COBRA premium assistance it remits on your behalf (regardless of whether the third party is considered an "employer" for other purposes). With respect to the COBRA premium assistance credit, the preceding sentences assume the common-law employer is the person to whom premiums are payable for purposes of the credit. If the insurer or multiemployer plan is the person to whom premiums are payable, the references to employer in this paragraph should be read to refer to the insurer or multiemployer plan, as applicable.

Under an exception to the rule that only the common-law employer is entitled to the COBRA premium assistance credit even if the common-law employer uses a third-party payer, a third-party payer is entitled to the credit if it is treated as the person to whom premiums are payable. A third-party payer is treated as the person to whom premiums are payable if the third-party payer is the entity that pays wages subject to federal employment taxes on behalf of the common-law employer and reports those wages and taxes on an aggregate Form 941 that it files on behalf of the employer, and it:

  • Maintains the group health plan;

  • Is considered the sponsor of the group health plan and is subject to the applicable Department of Labor (DOL) COBRA guidance, including providing the COBRA election notices to qualified beneficiaries; and

  • Would have received the COBRA premium payments directly from the assistance eligible individuals were it not for the COBRA premium assistance.

If a third-party payer satisfies the above conditions, the third-party payer's clients aren't eligible for the COBRA premium assistance credit or an advance payment of the COBRA premium assistance credit. Third-party payers that are considered the person to whom premiums are payable may, in anticipation of receiving the COBRA premium assistance credit, reduce the deposits of federal employment taxes relating to their own employees (that is, those employees for whom they are filing as the common-law employer, rather than as a third-party payer) on the day they become eligible for the credit. If the anticipated credit exceeds the available reduction of these deposits, the third-party payer may file Form 7200 to request an advance after the payroll period in which the third-party payer becomes entitled to the credit.

Aggregate Form 941 filers.

Approved section 3504 agents and CPEOs must complete and file Schedule R (Form 941) when filing an aggregate Form 941. Aggregate Forms 941 are filed by agents approved by the IRS under section 3504. To request approval to act as an agent for an employer, the agent files Form 2678 with the IRS unless you're a state or local government agency acting as an agent under the special procedures provided in Rev. Proc. 2013-39, 2013-52 I.R.B. 830, available at IRS.gov/irb/2013-52_IRB#RP-2013-39. Aggregate Forms 941 are also filed by CPEOs approved by the IRS under section 7705. To become a CPEO, the organization must apply through the IRS Online Registration System at IRS.gov/CPEO. CPEOs file Form 8973, Certified Professional Employer Organization/Customer Reporting Agreement, to notify the IRS that they started or ended a service contract with a customer. CPEOs must generally file Form 941 and Schedule R (Form 941) electronically. For more information about a CPEO’s requirement to file electronically, see Rev. Proc. 2017-14, 2017-3 I.R.B. 426, available at IRS.gov/irb/2017-03_IRB#RP-2017-14.

Other third-party payers that file aggregate Forms 941, such as non-certified PEOs, must complete and file Schedule R (Form 941) if they have clients that are claiming the qualified small business payroll tax credit for increasing research activities, the credit for qualified sick and family leave wages, the employee retention credit, and/or the COBRA premium assistance credit.

.This is an Image: taxtip.gifIf both an employer and a section 3504 authorized agent (or CPEO or other third-party payer) paid wages to an employee during a quarter, both the employer and the section 3504 authorized agent (or CPEO or other third-party payer, if applicable) should file Form 941 reporting the wages each entity paid to the employee during the applicable quarter and issue Forms W-2 reporting the wages each entity paid to the employee during the year..

If a third-party payer of sick pay is also paying qualified sick leave wages on behalf of an employer, the third party would be making the payments as an agent of the employer. The employer is required to do the reporting and payment of employment taxes with respect to the qualified sick leave wages and claim the credit for the qualified sick leave wages, unless the employer has an agency agreement with the third-party payer that requires the third-party payer to do the collecting, reporting, and/or paying or depositing employment taxes on the qualified sick leave wages. If the employer has an agency agreement with the third-party payer, the third-party payer includes the qualified sick leave wages on the third party's aggregate Form 941, claims the sick leave credit on behalf of the employer on the aggregate Form 941, and separately reports the credit allocable to the employers on Schedule R (Form 941). See section 6 of Pub. 15-A, Employer's Supplemental Tax Guide, for more information about sick pay reporting.

If a third-party payer is considered the person to whom COBRA premiums are payable, as discussed earlier under COVID-19 employment tax credits when return filed by a third-party payer, the third party must include the applicable credit amount on Schedule R (Form 941), page 1, column o, line 8, with amounts reported for the third-party payer's employees.

Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans.

Qualified tax-exempt organizations that hire eligible unemployed veterans may be able to claim the work opportunity tax credit against their payroll tax liability using Form 5884-C. For more information, go to IRS.gov/WOTC.

Correcting a previously filed Form 941.

If you discover an error on a previously filed Form 941, or if you otherwise need to amend a previously filed Form 941, make the correction using Form 941-X. Form 941-X is filed separately from Form 941. For more information, see the Instructions for Form 941-X, section 13 of Pub. 15, or go to IRS.gov/CorrectingEmploymentTaxes.

Federal tax deposits must be made by electronic funds transfer (EFT).

You must use EFT to make all federal tax deposits. Generally, an EFT is made using EFTPS. If you don't want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. EFTPS is a free service provided by the Department of the Treasury. Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee.

For more information on making federal tax deposits, see section 11 of Pub. 15. To get more information about EFTPS or to enroll in EFTPS, go to EFTPS.gov, or call 800-555-4477 or 800-733-4829 (TDD). Additional information about EFTPS is also available in Pub. 966.

.This is an Image: caution.gifFor an EFTPS deposit to be on time, you must submit the deposit by 8 p.m. Eastern time the day before the date the deposit is due..

Same-day wire payment option.

If you fail to submit a deposit transaction on EFTPS by 8 p.m. Eastern time the day before the date a deposit is due, you can still make your deposit on time by using the Federal Tax Collection Service (FTCS) to make a same-day wire payment. To use the same-day wire payment method, you will need to make arrangements with your financial institution ahead of time. Please check with your financial institution regarding availability, deadlines, and costs. Your financial institution may charge you a fee for payments made this way. To learn more about the information you will need to give your financial institution to make a same-day wire payment, go to IRS.gov/SameDayWire.

Timeliness of federal tax deposits.

If a deposit is required to be made on a day that isn't a business day, the deposit is considered timely if it is made by the close of the next business day. A business day is any day other than a Saturday, Sunday, or legal holiday. The term "legal holiday" for deposit purposes includes only those legal holidays in the District of Columbia. Legal holidays in the District of Columbia are provided in section 11 of Pub. 15.

Electronic filing and payment.

Businesses can enjoy the benefits of filing tax returns and paying their federal taxes electronically. Whether you rely on a tax professional or handle your own taxes, the IRS offers you convenient programs to make filing and paying easier. Spend less time worrying about taxes and more time running your business. Use e-file and EFTPS to your benefit.

  • For e-file, go to IRS.gov/EmploymentEfile for additional information. A fee may be charged to file electronically.

  • For EFTPS, go to EFTPS.gov, or call EFTPS Customer Service at 800-555-4477 or 800-733-4829 (TDD) for additional information.

  • For electronic filing of Forms W-2, Wage and Tax Statement, go to SSA.gov/employer. You may be required to file Forms W-2 electronically. For details, see the General Instructions for Forms W-2 and W-3.

.This is an Image: caution.gifIf you’re filing your tax return or paying your federal taxes electronically, a valid employer identification number (EIN) is required at the time the return is filed or the payment is made. If a valid EIN isn't provided, the return or payment won't be processed. This may result in penalties. See Employer identification number (EIN), later, for information about applying for an EIN..

Electronic funds withdrawal (EFW).

If you file Form 941 electronically, you can e-file and use EFW to pay the balance due in a single step using tax preparation software or through a tax professional. However, don't use EFW to make federal tax deposits. For more information on paying your taxes using EFW, go to IRS.gov/EFW.

Credit or debit card payments.

You can pay the balance due shown on Form 941 by credit or debit card. Your payment will be processed by a payment processor who will charge a processing fee. Don't use a credit or debit card to make federal tax deposits. For more information on paying your taxes with a credit or debit card, go to IRS.gov/PayByCard.

Online payment agreement.

You may be eligible to apply for an installment agreement online if you can't pay the full amount of tax you owe when you file your return. For more information, see What if you can't pay in full, later.

Paid preparers.

If you use a paid preparer to complete Form 941, the paid preparer must complete and sign the paid preparer's section of the form.

Where can you get telephone help?

For answers to your questions about completing Form 941 or tax deposit rules, you can call the IRS at 800-829-4933 or 800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability), Monday–Friday from 7:00 a.m. to 7:00 p.m. local time (Alaska and Hawaii follow Pacific time).

Photographs of missing children.

The IRS is a proud partner with the National Center for Missing & Exploited Children® (NCMEC). Photographs of missing children selected by the Center may appear in instructions on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

Purpose of Form 941

These instructions give you some background information about Form 941. They tell you who must file Form 941, how to complete it line by line, and when and where to file it.

If you want more in-depth information about payroll tax topics relating to Form 941, see Pub. 15 or go to IRS.gov/EmploymentTaxes.

Federal law requires you, as an employer, to withhold certain taxes from your employees' pay. Each time you pay wages, you must withhold—or take out of your employees' pay—certain amounts for federal income tax, social security tax, and Medicare tax. You must also withhold Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Under the withholding system, taxes withheld from your employees are credited to your employees in payment of their tax liabilities.

Federal law also requires you to pay any liability for the employer share of social security and Medicare taxes. This share of social security and Medicare taxes isn't withheld from employees.

Who Must File Form 941?

If you pay wages subject to federal income tax withholding or social security and Medicare taxes, you must file Form 941 quarterly to report the following amounts.

  • Wages you’ve paid.

  • Tips your employees reported to you.

  • Federal income tax you withheld.

  • Both the employer and the employee share of social security and Medicare taxes.

  • Additional Medicare Tax withheld from employees.

  • Current quarter's adjustments to social security and Medicare taxes for fractions of cents, sick pay, tips, and group-term life insurance.

  • Qualified small business payroll tax credit for increasing research activities.

  • Credit for qualified sick and family leave wages.

  • Employee retention credit.

  • Credit for COBRA premium assistance payments.

  • Total advances received from filing Form(s) 7200 for the quarter.

Don't use Form 941 to report backup withholding or income tax withholding on nonpayroll payments such as pensions, annuities, and gambling winnings. Report these types of withholding on Form 945, Annual Return of Withheld Federal Income Tax. Also, don't use Form 941 to report unemployment taxes. Report unemployment taxes on Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return.

After you file your first Form 941, you must file a return for each quarter, even if you have no taxes to report, unless you filed a final return or one of the exceptions listed next applies.

Exceptions

Special rules apply to some employers.

  • If you received notification to file Form 944, you must file Form 944 annually; don't file Form 941 quarterly.

  • Seasonal employers don't have to file a Form 941 for quarters in which they have no tax liability because they have paid no wages. To tell the IRS that you won't file a return for one or more quarters during the year, check the box on line 18a every quarter you file Form 941. See section 12 of Pub. 15 for more information.

  • Employers of household employees don't usually file Form 941. See Pub. 926 and Schedule H (Form 1040) for more information.

  • Employers of farm employees don't file Form 941 for wages paid for agricultural labor. See Form 943 and Pub. 51 for more information.

.This is an Image: taxtip.gifIf none of the these exceptions apply and you haven't filed a final return, you must file Form 941 each quarter even if you didn't pay wages during the quarter. Use IRS e-file, if possible..

Requesting To File Forms 941 Instead of Form 944, or Requesting To File Form 944 Instead of Forms 941

Requesting to file Forms 941 instead of Form 944.

Employers that would otherwise be required to file Form 944, Employer's ANNUAL Federal Tax Return, may contact the IRS to request to file quarterly Forms 941 instead of annual Form 944. To request to file quarterly Forms 941 to report your social security and Medicare taxes for the 2021 calendar year, you must either call the IRS at 800-829-4933 between January 1, 2021, and April 1, 2021, or send a written request postmarked between January 1, 2021, and March 15, 2021. After you contact the IRS, the IRS will send you a written notice that your filing requirement has been changed to Forms 941. You must receive written notice from the IRS to file Forms 941 instead of Form 944 before you may file these forms. If you don't receive this notice, you must file Form 944 for calendar year 2021.

Requesting to file Form 944 instead of Forms 941.

If you’re required to file Forms 941 but believe your employment taxes for calendar year 2021 will be $1,000 or less, you may request to file Form 944 instead of Forms 941 by calling the IRS at 800-829-4933 between January 1, 2021, and April 1, 2021, or sending a written request postmarked between January 1, 2021, and March 15, 2021. After you contact the IRS, the IRS will send you a written notice that your filing requirement has been changed to Form 944. You must receive written notice from the IRS to file Form 944 instead of Forms 941 before you may file this form. If you don't receive this notice, you must file Forms 941 for calendar year 2021.

Where to send written requests.

Written requests should be sent to:

Department of the Treasury Department of the Treasury
Internal Revenue Serviceor Internal Revenue Service
Ogden, UT 84201-0038Cincinnati, OH 45999-0038

If you would mail your return filed without a payment to Ogden, as shown under Where Should You File, later, send your request to the Ogden address shown above. If you would mail your return filed without a payment to Kansas City, send your request to the address for Cincinnati shown above. For more information about these procedures, see Rev. Proc. 2009-51, 2009-45 I.R.B. 625, available at IRS.gov/irb/2009-45_IRB#RP-2009-51.

What if You Reorganize or Close Your Business?

If You Sell or Transfer Your Business . . .

If you sell or transfer your business during the quarter, you and the new owner must each file a Form 941 for the quarter in which the transfer occurred. Report only the wages you paid.

When two businesses merge, the continuing firm must file a return for the quarter in which the change took place and the other firm should file a final return.

Changing from one form of business to another—such as from a sole proprietorship to a partnership or corporation—is considered a transfer. If a transfer occurs, you may need a new EIN. See Pub. 1635 and section 1 of Pub. 15 for more information.

Attach a statement to your return with:

  • The new owner's name (or the new name of the business);

  • Whether the business is now a sole proprietorship, partnership, or corporation;

  • The kind of change that occurred (a sale or transfer);

  • The date of the change; and

  • The name of the person keeping the payroll records and the address where those records will be kept.

If Your Business Has Closed . . .

If you permanently go out of business or stop paying wages to your employees, you must file a final return. To tell the IRS that Form 941 for a particular quarter is your final return, check the box on line 17 and enter the final date you paid wages. Also attach a statement to your return showing the name of the person keeping the payroll records and the address where those records will be kept.

See Terminating a business in the General Instructions for Forms W-2 and W-3 for information about earlier dates for the expedited furnishing and filing of Forms W-2 when a final Form 941 is filed.

If you participated in a statutory merger or consolidation, or qualify for predecessor-successor status due to an acquisition, you should generally file Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations. See the Instructions for Schedule D (Form 941) to determine whether you should file Schedule D (Form 941) and when you should file it.

When Must You File?

File your initial Form 941 for the quarter in which you first paid wages that are subject to social security and Medicare taxes or subject to federal income tax withholding. See the table titled When To File Form 941, later.

Then you must file for every quarter after that—every 3 months—even if you have no taxes to report, unless you’re a seasonal employer or are filing your final return. See Seasonal employers and If Your Business Has Closed, earlier.

File Form 941 only once for each quarter. If you filed electronically, don't file a paper Form 941. For more information about filing Form 941 electronically, see Electronic filing and payment, earlier.

When To File Form 941

Your Form 941 is due by the last day of the month that follows the end of the quarter.
The Quarter Includes . . .Quarter EndsForm 941
Is Due
1. January, February, MarchMarch 31April 30
2. April, May, JuneJune 30July 31
3. July, August, SeptemberSeptember 30October 31
4. October, November, DecemberDecember 31January 31

For example, you must generally report wages you pay during the first quarter—which is January through March—by April 30. If you made timely deposits in full payment of your taxes for the quarter, you may file by the 10th day of the 2nd month that follows the end of the quarter. For example, you may file Form 941 by May 10 if you made timely deposits in full payment of your taxes for the 1st quarter.

If we receive Form 941 after the due date, we will treat Form 941 as filed on time if the envelope containing Form 941 is properly addressed, contains sufficient postage, and is postmarked by the U.S. Postal Service on or before the due date, or sent by an IRS-designated private delivery service (PDS) on or before the due date. If you don't follow these guidelines, we will generally consider Form 941 filed when it is actually received. For more information about PDSs, see Where Should You File, later.

If any due date for filing falls on a Saturday, Sunday, or legal holiday, you may file your return on the next business day.

How Should You Complete Form 941?

Type or print your EIN, name, and address in the spaces provided. Also enter your name and EIN on the top of pages 2 and 3. Don't use your social security number (SSN) or individual taxpayer identification number (ITIN). Generally, enter the business (legal) name you used when you applied for your EIN. For example, if you’re a sole proprietor, enter "Haleigh Smith" on the "Name" line and "Haleigh's Cycles" on the "Trade name" line. Leave the "Trade name" line blank if it is the same as your "Name."

If you use a tax preparer to fill out Form 941, make sure the preparer shows your business name exactly as it appeared when you applied for your EIN.

Employer identification number (EIN).

To make sure businesses comply with federal tax laws, the IRS monitors tax filings and payments by using a numerical system to identify taxpayers. A unique nine-digit EIN is assigned to all corporations, partnerships, and some sole proprietors. Businesses needing an EIN must apply for a number and use it throughout the life of the business on all tax returns, payments, and reports.

Your business should have only one EIN. If you have more than one and aren't sure which one to use, write to the IRS office where you file your returns (using the Without a payment address under Where Should You File, later) or call the IRS at 800-829-4933.

If you don't have an EIN, you may apply for one online by visiting IRS.gov/EIN. You may also apply for an EIN by faxing or mailing Form SS-4 to the IRS. If the principal business was created or organized outside of the United States or U.S. territories, you may also apply for an EIN by calling 267-941-1099 (toll call). If you haven't received your EIN by the due date of Form 941, file a paper return and write "Applied For" and the date you applied in this entry space.

.This is an Image: caution.gifIf you’re filing your tax return electronically, a valid EIN is required at the time the return is filed. If a valid EIN isn't provided, the return won't be accepted. This may result in penalties..

.This is an Image: taxtip.gifAlways be sure the EIN on the form you file exactly matches the EIN the IRS assigned to your business. Don't use your SSN or ITIN on forms that ask for an EIN. If you used an EIN (including a prior owner's EIN) on Form 941 that is different from the EIN reported on Form W-3, see Box h—Other EIN used this year in the General Instructions for Forms W-2 and W-3. Filing a Form 941 with an incorrect EIN or using another business's EIN may result in penalties and delays in processing your return..

If you change your business name, business address, or responsible party...

Notify the IRS immediately if you change your business name, business address, or responsible party.

  • Write to the IRS office where you file your returns (using the Without a payment address under Where Should You File, later) to notify the IRS of any business name change. See Pub.1635 to see if you need to apply for a new EIN.

  • Complete and mail Form 8822-B to notify the IRS of a business address or responsible party change. Don't mail Form 8822-B with your Form 941. For a definition of "responsible party," see the Instructions for Form SS-4.

Check the Box for the Quarter

Under "Report for this Quarter of 2021" at the top of Form 941, check the appropriate box of the quarter for which you’re filing. Make sure the quarter checked is the same as shown on any attached Schedule B (Form 941), Report of Tax Liability for Semiweekly Schedule Depositors, and, if applicable, Schedule R (Form 941).

Completing and Filing Form 941

Make entries on Form 941 as follows to enable accurate scanning and processing.

  • Use 10-point Courier font (if possible) for all entries if you’re typing or using a computer to complete your form. Portable Document Format (PDF) forms on IRS.gov have fillable fields with acceptable font specifications.

  • Don't enter dollar signs and decimal points. Commas are optional. Enter dollars to the left of the preprinted decimal point and cents to the right of it. Don’t round entries to whole dollars. Always show an amount for cents, even if it is zero.

  • Leave blank any data field (except lines 1, 2, and 12) with a value of zero.

  • Enter negative amounts using a minus sign (if possible). Otherwise, use parentheses.

  • Enter your name and EIN on all pages.

  • Enter your name, EIN, "Form 941," and the tax year and quarter on all attachments.

  • Staple multiple sheets in the upper left corner when filing.

Complete all three pages.

You must complete all three pages of Form 941 and sign on page 3. Failure to do so may delay processing of your return.

Required Notice to Employees About the Earned Income Credit (EIC)

To notify employees about the EIC, you must give the employees one of the following items.

  • Form W-2 which has the required information about the EIC on the back of Copy B.

  • A substitute Form W-2 with the same EIC information on the back of the employee's copy that is on Copy B of the IRS Form W-2.

  • Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC).

  • Your written statement with the same wording as
    Notice 797.

For more information, see section 10 of Pub. 15, Pub. 596, and IRS.gov/EIC.

Reconciling Forms 941 and Form W-3

The IRS matches amounts reported on your four quarterly Forms 941 with Form W-2 amounts totaled on your yearly Form W-3, Transmittal of Wage and Tax Statements. If the amounts don't agree, you may be contacted by the IRS or the Social Security Administration (SSA). The following amounts are reconciled.

  • Federal income tax withholding.

  • Social security wages.

  • Social security tips.

  • Medicare wages and tips.

For more information, see section 12 of Pub. 15 and the Instructions for Schedule D (Form 941).

Where Should You File?

You’re encouraged to file Form 941 electronically. Go to IRS.gov/EmploymentEfile for more information on electronic filing. If you file a paper return, where you file depends on whether you include a payment with Form 941. Mail your return to the address listed for your location in the table that follows.

PDSs can't deliver to P.O. boxes. You must use the U.S. Postal Service to mail an item to a P.O. box address. Go to IRS.gov/PDS for the current list of PDSs. For the IRS mailing address to use if you’re using a PDS, go to IRS.gov/PDSstreetAddresses. Select the mailing address listed on the webpage that is in the same state as the address to which you would mail returns filed without a payment, as shown next.

Mailing Addresses for Form 941

If you’re in . . .Without a payment . . . With a payment . . .
Connecticut, Delaware, District of Columbia, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia, WisconsinDepartment of the Treasury
Internal Revenue Service
Kansas City, MO 64999-0005
Internal Revenue Service
P.O. Box 806532
Cincinnati, OH 45280-6532
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, WyomingDepartment of the Treasury
Internal Revenue Service
Ogden, UT 84201-0005
Internal Revenue Service
P.O. Box 932100
Louisville, KY 40293-2100
No legal residence or principal place of business in any stateInternal Revenue Service
P.O. Box 409101
Ogden, UT 84409
Internal Revenue Service
P.O. Box 932100
Louisville, KY 40293-2100
Special filing address for exempt organizations; federal, state, and local governmental entities; and Indian tribal governmental entities, regardless of locationDepartment of the Treasury
Internal Revenue Service
Ogden, UT 84201-0005
Internal Revenue Service
P.O. Box 932100
Louisville, KY 40293-2100

.This is an Image: caution.gifYour filing address may have changed from that used to file your employment tax return in prior years. Don't send Form 941 or any payments to the SSA. .

Depositing Your Taxes

.This is an Image: caution.gifYou must deposit all depository taxes electronically by EFT. For more information, see Federal tax deposits must be made by electronic funds transfer (EFT) under Reminders, earlier..

Must You Deposit Your Taxes?

You may have to deposit the federal income taxes you withheld and both the employer and employee social security taxes and Medicare taxes.

  • If your total taxes after adjustments and nonrefundable credits (line 12) are less than $2,500 for the current quarter or the prior quarter, and you didn't incur a $100,000 next-day deposit obligation during the current quarter. You don't have to make a deposit. To avoid a penalty, you must pay any amount due in full with a timely filed return or you must deposit any amount you owe by the due date of the return. For more information on paying with a timely filed return, see the instructions for line 14, later. If you’re not sure your total tax liability for the current quarter will be less than $2,500 (and your liability for the prior quarter wasn't less than $2,500), make deposits using the semiweekly or monthly rules so you won't be subject to failure-to-deposit (FTD) penalties.

  • If your total taxes after adjustments and nonrefundable credits (line 12) are $2,500 or more for the current quarter and the prior quarter. You must make deposits according to your deposit schedule. See section 11 of Pub. 15 for information about payments made under the accuracy of deposits rule and for rules about federal tax deposits.

Reducing your deposits for COVID-19 credits.

Employers eligible to claim the credit for qualified sick and family leave wages, the employee retention credit, and/or the COBRA premium assistance credit can reduce their deposits by the amount of their anticipated credits. You may reduce your deposits of federal employment taxes in anticipation of the COBRA premium assistance credit with regard to a period of coverage as of the date you are entitled to the credit. Employers won’t be subject to an FTD penalty for reducing their deposits if certain conditions are met. See the instructions for line 11b, line 11c, line 11d, and line 11e, later, for more information on these credits. For more information on reducing deposits, see Notice 2020-22, 2020-17 I.R.B. 664, available at IRS.gov/irb/2020-17_IRB#NOT-2020-22, and Notice 2021-24, 2021-18 I.R.B. 1122, available at IRS.gov/irb/2021-18_IRB#NOT-2021-24. See the instructions for line 16, later, for information on adjusting tax liabilities reported on line 16 or Schedule B (Form 941) for nonrefundable credits.

Example. Reducing deposits for COBRA premium assistance.

Maple Co. has a semimonthly payroll period. Sophie Rose elected COBRA premium assistance on May 17, 2021. Maple Co. becomes entitled to a COBRA premium assistance credit as of May 17, 2021, for the premiums not paid by Sophie (an assistance eligible individual) for the periods of coverage of April 1, 2021, through April 30, 2021, and May 1, 2021, through May 31, 2021. Maple Co. may reduce its federal employment tax deposits as of May 17, 2021, in anticipation of the credit to which Maple Co. has become entitled.

When Must You Deposit Your Taxes?

Determine if You’re a Monthly or Semiweekly Schedule Depositor for the Quarter

The IRS uses two different sets of deposit rules to determine when businesses must deposit their social security, Medicare, and withheld federal income taxes. These schedules tell you when a deposit is due after you have a payday.

Your deposit schedule isn't determined by how often you pay your employees. Your deposit schedule depends on the total tax liability you reported on Form 941 during the previous 4-quarter lookback period (July 1 of the second preceding calendar year through June 30 of the preceding calendar year). See section 11 of Pub. 15 for details. If you filed Form 944 in either 2019 or 2020, your lookback period is the 2019 calendar year.

Before the beginning of each calendar year, determine which type of deposit schedule you must use.

  • If you reported $50,000 or less in taxes during the lookback period, you’re a monthly schedule depositor.

  • If you reported more than $50,000 of taxes during the lookback period, you’re a semiweekly schedule depositor.

.This is an Image: caution.gifIf you’re a monthly schedule depositor and accumulate a $100,000 tax liability on any day during the deposit period, you become a semiweekly schedule depositor on the next day and remain so for at least the rest of the calendar year and for the following calendar year. See $100,000 Next-Day Deposit Rule in section 11 of Pub. 15 for more information. The $100,000 tax liability threshold requiring a next-day deposit is determined before you consider any reduction of your liability for nonrefundable credits. For more information, including an example, see frequently asked question 17 at IRS.gov/ETD. .

What About Penalties and Interest?

Avoiding Penalties and Interest

You can avoid paying penalties and interest if you do all of the following.

  • Deposit or pay your taxes when they are due, unless you meet the requirements discussed in Notice 2020-22 and Notice 2021-24.

  • File your fully completed Form 941 on time.

  • Report your tax liability accurately.

  • Submit valid checks for tax payments.

  • Furnish accurate Forms W-2 to employees.

  • File Form W-3 and Copy A of Forms W-2 with the SSA on time and accurately.

Penalties and interest are charged on taxes paid late and returns filed late at a rate set by law. See sections 11 and 12 of Pub. 15 for details.

Use Form 843 to request abatement of assessed penalties or interest. Don't request abatement of assessed penalties or interest on Form 941 or Form 941-X.

If you receive a notice about a penalty after you file this return, reply to the notice with an explanation and we will determine if you meet reasonable-cause criteria. Don't attach an explanation when you file your return.

.This is an Image: caution.gifIf federal income, social security, and Medicare taxes that must be withheld (that is, trust fund taxes) aren't withheld or aren't deposited or paid to the United States Treasury, the trust fund recovery penalty may apply. The penalty is 100% of the unpaid trust fund tax. If these unpaid taxes can't be immediately collected from the employer or business, the trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, or paying over these taxes, and who acted willfully in not doing so. For more information, see section 11 of Pub. 15. The trust fund recovery penalty won't apply to any amount of trust fund taxes an employer holds back in anticipation of any credits they are entitled to. It also won't apply to applicable taxes deferred under section 2302 of the CARES Act or applicable taxes deferred under Notice 2020-65 and Notice 2021-11 if paid by the due date..

Adjustment of Tax on Tips

If, by the 10th of the month after the month you received an employee's report on tips, you don't have enough employee funds available to withhold the employee share of social security and Medicare taxes, you no longer have to collect it. Report the entire amount of these tips on line 5b (Taxable social security tips), line 5c (Taxable Medicare wages and tips), and, if the withholding threshold is met, line 5d (Taxable wages and tips subject to Additional Medicare Tax withholding). Include as a negative adjustment on line 9 the total uncollected employee share of the social security and Medicare taxes.

Part 1: Answer These Questions for This Quarter

1. Number of Employees Who Received Wages, Tips, or Other Compensation

Enter the number of employees on your payroll for the pay period including June 12, September 12, or December 12, for the quarter indicated at the top of Form 941. Don't include:

  • Household employees,

  • Employees in nonpay status for the pay period,

  • Farm employees,

Sours: https://www.irs.gov/instructions/i941
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What Is the IRS Form 941?

Updated for Tax Year 2021 / October 16, 2021 03:10 AM


OVERVIEW

You must file IRS Form 941 if you operate a business and have employees working for you. Certain employers whose annual payroll tax and withholding liabilities are less than $1,000, might get approval to file the annual version—Form 944.


If you operate a business and have employees working for you, then you likely need to file IRS Form 941, Employer’s Quarterly Federal Tax Return, four times per year. As an employer, you are responsible for withholding federal income tax and other payroll taxes from each employee’s paycheck and remitting it to the IRS. Each Form 941 you file reports the total amount of tax you withheld during the quarter.

Who must file Form 941

Generally, any person or business that pays wages to an employee must file a Form 941 each quarter, and must continue to do so even if there are no employees during some of the quarters. The only exceptions to this filing requirement are for seasonal employers who don’t pay employee wages during one or more quarters, employers of household employees and employers of agricultural employees.

Completing Form 941

Every time you prepare a Form 941 for the quarter, you must report

  • the number of employees you have,
  • the total wages you paid and
  • the amount of taxes you withheld to arrive at the amount you must send to the IRS.

Before starting the return, you need your payroll records plus documentation for any taxable tips your employees report to you.

When you calculate the amount to send to the IRS, in addition to federal income tax, the payment must reflect:

  • 6.2% of each employee’s wages, up to $142,800 in 2021, for Social Security insurance.
  • 1.45% of all taxable wages for Medicare tax.

As the employer, you are responsible for making an additional payment to the IRS equal to all Medicare and Social Security taxes withheld. Also, beginning in 2015, an employer must withhold Additional Medicare Tax from wages paid in excess of $200,000 during the year in addition to any other taxes withheld.

Form 941 filing deadlines

Since you must file a separate form for each quarter, the IRS imposes four filing deadlines that you must adhere to. The deadlines each year are:

  • April 30
  • July 31
  • Oct. 31
  • Jan. 31

Just remember that the filing deadline always falls on the last day of the month following the end of the quarter. This gives you one month to prepare the form before submitting it to the IRS.

Avoiding penalties

Failure to timely file a Form 941 may result in a penalty of 5% of the tax due with that return for each month or part of a month the return is late. The penalty caps out at 25%. A separate penalty applies for making tax payments late or paying less than you owe. The IRS will charge you 2 to 15% of your underpayment, depending on how many days you are late paying the correct amount.

At the end of the year, the total amounts you report on the four Form 941s must equal the total of all amounts you report on the W-2 forms you distribute to employees, as well as the Form W-3 you send to the government. If something doesn’t add up, you will likely hear from the IRS.

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The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

Sours: https://turbotax.intuit.com/tax-tips/small-business-taxes/what-is-the-irs-form-941/L4mA9LHER

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Quick Tips - Filling Out IRS Form 941: Employer’s Quarterly Federal Tax Return

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