If you are a business employer who is not a farmer, you will file
Form 941 to report wages you have paid, tips your employees have
received, federal income tax withheld, social security and Medicare
taxes withheld, your share of social security and Medicare taxes, and
advance earned income credit (AEIC) payments. Agricultural employers
should generally use the annual report Form 943. All other employers
must file for each calendar quarter, using a separate Form 941. The
first quarter is January through March. The second quarter is April
through June. The third quarter is July through September. The fourth
quarter is October through December. Form 941 is due by the last day
of the month following the end of the quarter. For example, wages you
pay during the first quarter, January through March, must generally
be reported on Form 941 by April 30th. 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.
Most employers are required to deposit their employment taxes before
the Form 941 is filed. The rules for making deposits are explained in
Topic 757. If you have deposited all your tax on time, you may file
Form 941 ten days after it would normally be due.
The total social security and Medicare taxes on Form 941 may differ
by a small amount from the total on your payroll records, due to
fractions of cents that you gained or lost when computing separate
amounts for individual employees. You may add or subtract this
difference on the line for social security and Medicare adjustments.
Generally, this should not be more than a few cents. You may also use
this adjustment line to correct the social security and Medicare
taxes you were unable to collect on employees' tips, or for social
security and Medicare taxes withheld from your employees' sick pay by
a third party, such as an insurance company.
The income tax withheld and social security and Medicare taxes are
added together on Form 941. If you made advance earned income credit
payments to employees during the quarter, the total amount is
subtracted from your total taxes. Refer to Topic 754 for more
information on advance earned income credit.
The result, net taxes, is the amount of employment taxes you owe for
the quarter. If this amount is $500 or more, you must also complete
the Monthly Summary of Federal Tax Liability portion of Form 941 if
you are a monthly schedule depositor, or Schedule B (Form 941), if
you are a semi-weekly depositor or accumulated a tax liability of
$100,000 or more on any day. The purpose of this part of the form is
to show the IRS if you were required to make deposits and, if so,
whether they were made timely.
On the record of liability (the monthly summary or schedule B), you
must show the combined amount of social security, Medicare, and
income tax owed for each month or day. Your liability for employment
taxes occurs when you actually pay the employees their wages, not
when the pay period ends.
For example, if your pay period ends September 24th, but you do not
pay the employees until October 1st, their wages would be reported in
the fourth quarter, when you actually became liable for the tax, not
the third quarter when the pay period ended.
It is very important that you complete the tax liability record
correctly, or it may appear that you did not deposit your taxes when
due. There is a late deposit penalty ranging from 2% to 15%,
depending on the length of time the deposit is late.
Generally, if your tax liability for the quarter is $500 or more and
you have made the proper deposits, you should not have a balance due
with Form 941. Generally, only taxpayers with a tax liability of less
than $500 may pay with the tax return. If you pay taxes with your tax
return that should have been deposited, you may be subject to a
penalty. Be sure Form 941 is signed and dated before mailing it to
your service center.
Publications you may find helpful are Publication 15, Employer's Tax
Guide, and Publication 15-A, Employer's Supplemental Tax Guide.
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