Form 941, or Employer’s Quarterly Federal Tax Return, is a tax form from the Internal Revenue Service (IRS) that employers file every quarter to report income taxes, social security taxes, and Medicare taxes they have withheld from the paychecks of their employees.
While individual taxpayers only have to file a single tax return per year, businesses have to file quarterly tax returns. However, not all businesses have to file Form 941. Seasonal businesses do not have to file during quarters when they have not hired any employee. Businesses that hire farmworkers and individuals who hire household employees do not also need to file the form.
According to the federal tax agency, you must file Form 941 quarterly if you pay wages subject to federal income tax withholding or social security and Medicare taxes. When you file Form 941, you will need 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.
- Deferred amount of the employer share of social security tax.
- Qualified small business payroll tax credit for increasing research activities.
- Credit for qualified sick and family leave wages
- Employee retention credit
Federal laws mandate employers to withhold taxes from the pay of their employees. Form 941 is due four times every year. In general, the due date falls on the last day of the last month of every quarter — March 31 for Quarter 1: January, February, and March; June 30 for Quarter 2: April, May, and June; September 30 for Quarter 3: July, August, and September; and December 31 for Quarter 4: October, November, and December. When a due date falls on a holiday or weekend, the next business day becomes the new due date.
Failure to file Form 941 on time can lead to penalties. Underreporting tax liabilities also result in fines.
Form 941 is a three-page document that consists of five parts that you need to accomplish as an employer. Follow the guide below to answer the form accurately.
To start, provide the following:
- Your Employee Identification Number (EIN)
- Your legal name, and not your trade name
- Your trade name, if applicable
- Your address
On the upper-right side of the first page, select the quarter you are reporting.
Line 1: Provide the number of employees on your payroll for the quarter.
Line 2: Provide total wages, tips, and other compensation such as sick pay, commissions, and bonuses paid to all employees during the filing period.
Line 3: Provide the total federal income tax withheld from the wages of employees.
Line 4: Check the box if no employee compensation was subject to Social Security or Medicare tax.
Lines 5a—5d: Calculate your tax obligations according to their classifications.
Line 5e: Add Column 2 from Line 5a to Line 5d.
Line 5f: If applicable, enter the tax due from your Section 3121(q) Notice and Demand.
Line 6: Add Lines 3, 5e, and 5f.
Line 7: Enter total fractions-of-cents adjustment.
Line 8: Enter the amount of the employees' portion of Social Security and Medicare taxes that a third-party sick-pay pay deposited and paid.
Line 9: Enter the total adjustments for tips and group-term life insurance.
Line 10: Add Lines 6 to 9.
Line 11a: Enter the amount of the credit from Form 8974.
Line 11b: Enter the non-refundable portion of the credit for qualified sick and family leave wages.
Line 11c: Enter the non-refundable portion of employee retention credit.
Line 11d: AddLines 11a to 11c.
Line 12: Subtract Line 11d from Line 10.
Line 13a: Enter total deposits for the quarter.
Lines 13b: Enter the deferred amount of the employer share of social security tax.
Lines 13c: Enter the refundable portion of the credit for qualified sick and family leave wages.
Lines 13d: Enter the refundable portion of employee retention credit.
Lines 13e: Add lines 13a to 13d.
Lines 13f: Enter total advances received from Forms 7200 for the quarter.
Lines 13g: Subtract Line 13f from Line 13e.
Line 14: Enter the total balance due.
Line 15: Enter the overpayment amount and mark the appropriate box on what to do with it — apply to the next return or send a refund.
Line 16: Use this portion to indicate whether you are a monthly or semiweekly schedule depositor. If monthly, provide the applicable information on Month 1, Month 2, and Month 3 boxes and compute for total liability for the quarter. If semiweekly, complete Form 941 Schedule B and attach it to this form.
Line 17: Mark the checkbox if your business has closed or stopped paying wages and provide the final date you paid wages.
Line 18: Mark the checkbox if you are a seasonal employer and do not have to file a return for every quarter of the year.
Line 19: Enter qualified health plan expenses allocable to qualified sick leave wages.
Line 20: Enter qualified health plan expenses allocable to qualified family leave wages.
Line 21: Enter qualified wages for the employee retention credit.
Line 22: Enter qualified health plan expenses allocable to wages reported on Line 21.
Line 23: Enter credit from Form 5884-C, Line 11, for this quarter.
Line 24: Enter qualified wage paid March 13 through March 31, 2020, for the employee retention credit. Only use this section for the second quarter filing of this form.
Line 25: Enter qualified health plan expenses allocable to wages reported on Line 24. Only use this section for the second quarter filing of this form.
Use this section to give permission to a third party, including an accountant, lawyer, or tax professional who can discuss this form with the IRS on your behalf.
Sign and date the form to validate all the provided information.
What is the purpose of Form 941?
Use Form 941 to report the taxes withheld from employees' wages and pay any balance of liability for the Federal Insurance Contributions Act (FICA) and Family and Medical Leave Act (FMLA).
Where to get Form 941?
You can get Form 941 at your local Internal Revenue Service office. You can also visit the official IRS website to download and print a copy that you can fill out manually. There are also other PDF Form filler websites that have the latest blank copy of Form 941 that you can fill out electronically.
Can I download Form 941?
The Internal Revenue Service provides a blank, downloadable copy of Form 941 on its official website; therefore, the IRS allows users to get a copy of the form without going to a local IRS office.
Can I fill out Form 941 online?
You can electronically fill out Form 941. If you also wish to file your tax return online, there are companies that provide eFile services.
Who uses Form 941?
Form 941 is used by employers to report quarterly taxes withheld from their employees. You must file Form 941 with the Internal Revenue Service ifyou operate a business and have employees. Certain employers whose annual payroll tax and withholding liabilities are less than $1,000 may use Form 944 instead of Form 941.
What is the difference between Form 941 and Form 944?
The main difference between Form 941 and Form 944 is that the former allows employers to report wages and taxes on a quarterly basis, while the latter requires employers to report wages and taxes annually.
When do you file Form 941?
File Form 941 on the last day of the last month of every quarter: March 31 for the first quarter, June 30 for the second quarter, September 30 for the third quarter, and December 31 for the fourth quarter. If the date for filing Form 941 falls on a holiday or weekend, the next business day becomes the new due date.
Where can I mail Form 941?
Mail Form 941 with payment to the address listed on the instructions section of the form. The mailing address for filing Federal Tax Returns is different from that of state tax returns, so check your local Internal Revenue Service office or the official IRS website for further details. You can also visit any post office and request a postage-paid envelope in which you can mail your completed forms back to the appropriate branch of service.
Where should I file Form 941 if I have no legal residence or principal place of business in any state?
If you have no legal residence or principal place of business in any state, mail Form 941 with your payment to the following address:
Internal Revenue Service
P.O. Box 932100
Louisville, KY 40293–2100
If mailing Form 941 without payment, mail to the following address:
Internal Revenue Service
PO Box 409101
Ogden, UT 84409
What are some common problems faced by employers when filing Form 941?
Filling out Form 941 can be complicated, especially if it's not done regularly; hence, new business owners may make mistakes. Some of them include incorrectly calculating withholding amounts due for each quarter or miscalculating the number of employees working every payroll period. Other examples include forgetting to submit payment on time or writing down incorrect information regarding an employee’s name or Social Security Number.
What are the most common errors on Form 941?
The employer’s name and Employer's Identification Number should be correct to avoid any problems when filing Form 941. In addition, not having the Social Security Number of every employee could result in a delay with processing returns if there is an audit conducted. Your business address should also match what you provided for tax identification purposes so that it will not cause any issues when being processed by the Internal Revenue Service or any state government agency in charge of taxation matters where your company resides. The amount withheld from each employee needs to be equal to their taxable income times withholding rates. The amount of tax and Social Security and Medicare withholding must be at least the same as what was withheld in the prior year or you have not fulfilled your obligation to withhold taxes.
Do I need to hire a tax expert to file Form 941?
If there are any questions regarding Form 941, it is best to get help from an expert who can ensure that everything goes smoothly during filing season so that you will not run into issues with taxation agencies later on down the road after being audited about incorrectly filled out forms.
Hiring a tax expert avoids any problems with tax agencies, such as receiving penalties or having your company audited in the future. Employers should also hire an experienced Certified Public Accountant who can help ensure that they are filing everything accurately and on time so that there will not be any issues at a later date while dealing with taxation authorities.
Do I need to file Form 941 if I am a seasonal employer?
If you are a seasonal employer, then you do not need to file Form 941. You may file Form 941 instead.
Do I need to file Form 941 for independent contractors?
No, you do not have to file Form 941 if you only pay independent contractors. Only use Form 941 to report the taxes withheld from employees' wages.
What happens if I don't file Form 941
Not filing Form 941 can result in you paying the Internal Revenue Service 5% of the tax due for each month that you don’t submit Form 941, to a maximum of 25%.
Who is exempt from filing Form 941?
Some companies are exempt from filing Form 941 on a quarterly basis. These include employers who:
- Have no employees during the calendar year;
- Have an average of $100,000 or less in wages per quarter for each employee; and
- Pay taxes through withholding (rather than by depositing funds).
If you fit into one of these categories, then you will only have to file annual tax returns. That being said, there may be other circumstances that can apply depending on your specific situation so always double-check with a tax professional before deciding not to file tax returns.
When do employers file their tax returns?
Generally, employers are required to submit their tax returns on a monthly or quarterly basis based on the total amount of wages paid each quarter. However, if an employer has only one employee during the year and that person earns at least $600 but not more than $6,500 in any calendar quarter, then they must submit their return annually instead of every three months.
Why should employers file a tax return?
Filing quarterly returns and making deposits is a way for employers to avoid penalties. Employers must file quarterly returns to report the taxes withheld from their employees’ wages. The employer also has to make excise tax deposits and pay any balance of liability for the Federal Insurance Contributions Act (FICA) and Family and Medical Leave Act (FMLA).
What happens if an employer fails to file a tax return?
When employers fail to submit their tax returns on time, they will receive late filing penalties, which can be up to $100 per day until the tax return or deposit form is filed with the Internal Revenue Service. An additional penalty of at least $500 may apply as well depending on how much unpaid tax they owe. The failure-to-deposit penalty also applies when an employer does not make any payments towards their Federal Insurance Contributions Act (FICA) liability during a given quarter regardless of whether or not they have withheld taxes from employees’ wages. This penalty can reach up to 15% of what they owe.
Filing a tax return on time is crucial for all employers, even more so if you are self-employed and have to pay your own taxes every four months instead of submitting them based on how much money you make in each quarter as regular employees do.
You can avoid penalties by hiring a professional accountant or tax expert to help you file your taxes in the proper way.
Is there any way I can avoid tax penalties?
Yes! Employers have several options when it comes to submitting payments for employer taxes with the Internal Revenue Service. You should always use whichever method is most convenient for you and your company so that you do not incur any kind of penalty while filling out forms or paying off what you owe in taxes at a later date. It may also be worth hiring someone who has experience working as a Certified Public Accountant because they know exactly how much money needs to be paid every quarter depending on how big your business is and how many employees you have been employing throughout the year.
How to pay employer tax liabilities?
There are many different ways to pay your employer tax liabilities with the Internal Revenue Service. Employers can mail their payments, submit them via the Electronic Federal Tax Payment System (EFTPS), or even submit an estimated payment if they believe that it will be difficult for them to get everything done in time before taxes are due.
What happens if I entered the wrong Employer Identification Number (EIN) in my tax return?
When it comes to filing or submitting your tax return, it is important you double-check everything before sealing the envelope and sending it off. Entering the wrong Employer Identification Number (EIN) can have dire consequences on how much money you owe in taxes which means that if you send a payment for too little then this will also be deducted from your refund once processing time has been completed.
What should I do if I entered the incorrect Employer Identification Number (EIN)?
If you realize you made an error when inputting your Employer Identification Number (EIN) into their paperwork then you must immediately revise the information. This does not mean that there are no repercussions; in fact, certain fees may be involved depending on whether or not the Internal Revenue Service accepts the return.
In addition, this may delay processing time since everything will have to be checked thoroughly before a new file is created and sent back out again. This also means that any refunds due cannot be processed until after all revisions are made which can take up to six weeks or longer depending on how quickly your payment arrives at its destination. Therefore, you should not make attempts to contact people via email or phone while waiting because these interactions might cause further delays in receiving your money back if it becomes necessary for them to get involved with the process by requesting additional information from you about why exactly someone entered an incorrect EIN into their paperwork when returns electronically.
Who is considered an employer by the Internal Revenue Service?
The Internal Revenue Service considers any business, organization, or individual who pays wages and salaries to employees as an employer. This means that even if you own a small company with one employee, you are still considered an employer. Nevertheless, the ways employers file their tax returns vary, depending on certain conditions, including income, employee salaries, and taxes.
Why do employers need to withhold taxes from employees?
Because the Federal Insurance Contributions Act (FICA) requires employers to contribute toward Social Security and Medicare, they must withhold money from employees’ paychecks for this purpose. This is known as FICA withholding and it works by collecting a percentage of an employee’s gross wages or salary before taxes are taken out so that both parties know how much will be deducted at the end of every pay period. This withholding is important for both the employer and employee to ensure that they are paying their fair share of taxes.
When should employers deduct withholding taxes from employees?
Employers should deduct withholding taxes from employees on a regular basis, usually once per pay period. There are some exceptions to this rule such as when the employer is waiting for written instructions on how much money needs to be withheld from an employee’s paycheck. In addition, if an employee requests additional withholdings then employers must adhere to these guidelines accordingly while ensuring that they do not withhold any more than necessary because it could end up causing unnecessary problems between both parties in the long run which can ultimately lead to lawsuits and other complications down the line.
What happens if employers overpaid the Internal Revenue Service?
Employers can overpay the Internal Revenue Service if they withheld more money from their employees’ paychecks than was actually due. If this happens, then employers will receive a refund for that amount. This is because there are certain conditions under which an employer may withhold too much such as the wrong Social Security Number or not filing on time with FICA deductions made throughout the year. Employer tax withholding errors most often occur in these two scenarios so be sure you check records regularly.
What is the Federal Insurance Contributions Act (FICA)?
The Federal Insurance Contributions Act (FICA) is the section of tax law that requires employers to make contributions toward Social Security and Medicare. Employers must pay a percentage of their employees’ wages, which are subject to income tax withholding, as well as their own contributions with respect to each employee for whom they have withheld money from his or her salary.
How does the Federal Insurance Contributions Act (FICA) work?
Employees contribute more than half of the cost for this program via payroll deductions while self-employed individuals bear it all themselves since there is no one else making contributions on their behalf. Therefore, if you are an employer who pays into your employees’ accounts through these withholdings then you will be able to benefit from some advantages later in life such as lower premiums for Medicare if you have to get your own coverage when you are older.
What is the Family and Medical Leave Act (FMLA)?
The Family and Medical Leave Act (FMLA) is a federal law that gives certain employees up to 12 weeks of unpaid leave per year in case they need time off work for reasons such as:
- Adopting a child
- Caring for immediate family members who are ill, injured, or recuperating from an illness.
Employees must also be given the same job when they return back to work after taking this leave. Employers are not allowed to discriminate against individuals based on their decision to exercise these rights if eligible under FMLA guidelines. This means that no one can lose his/her position because he/she needed some time away from work whether it was paid or unpaid. The only exception to this rule is if the employer would suffer a significant economic loss because of the employee’s absence.
How do I get Family and Medical Leave Act (FMLA) benefits?
To be eligible for FMLA benefits, employees must have been employed by their companies for at least 12 months and worked at least 1250 hours in that time period. However, there are some exceptions such as parents who adopt children or individuals whose spouses work for military branches of government services. In addition, it does not matter how big your company is when it comes to eligibility; anyone who works full-time (and has already met all criteria) can receive these rights under federal law.