Fillable Form Form 941 Schedule R (2021)

What is Schedule R (Form 941)?

Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers, is an Internal Revenue Service (IRS) form used to provide the IRS with client-specific information that supports the totals reported on an aggregate Form 941.

For the purposes of Schedule R (Form 941), the term “client” may refer to any of the following:

• An “employer or payer” identified on Form 2678 (Employer/Payer Appointment of Agent)
• A customer who enters into a contract that meets the requirements under section 7705(e)(2)
• A client who enters into a service agreement described under Regulations section 31.3504-2(b)(2) with a certified professional employer organization (CPEO)
• A client who enters into a service agreement described under Regulations section 31.3504-2(b)(2) with a non-certified professional employer organization (PEO)
• A third party paying qualified sick leave wages as an agent for the employer under Regulations section 32.1(e)(3)

The IRS needs Schedule R to be filed so that they can verify the information provided on Form 941

Who needs to use Schedule R (Form 941)?

Agents approved by the IRS under section 3504 and CPEOs must complete Schedule R each time they file an aggregate Form 941. Other third parties that file aggregate Forms 941 must also fill out and complete Schedule R 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, or the COBRA premium assistance credit.

For aggregate Form 941 filers, Schedule R Form 941 should generally be filed and submitted attached to Form 941. Submission of both the aggregate Form(s) 941 and the attached Schedule R form may be done either electronically or through paper submission, though filing the forms electronically is generally more common.

How to fill out Schedule R (Form 941)?

While long, Schedule R Form 941 is actually a very simple form to fill out. Make sure to have the relevant documents (most importantly the accomplished Form 941) prepared so as to ensure that the information you enter in this form is correct and updated. Keep in mind, as well, that there is a “continuation page” for this form. Unless otherwise specified, the same instructions as written below will apply to that page of the form. You may also use extra copies of the “continuation page” as needed.

Because Schedule R must be filed attached to Form 941 itself, make sure that you download and print the form in PDF format after filling it out, so as to make sure that the information entered remains intact regardless of how it is submitted or opened.

Employer Identification Number

Enter your Employer Identification Number (EIN).

Name

Enter your name as written on Form 941.

Type of Filer

Check only one of the boxes that indicates what type of filer you are. You may choose from:

• Section 3504 Agent
• CPEO
• Other Third Party (you may need to attach a document providing information or evidence on your status as another third party)

Quarter

Check the appropriate box that indicates which quarter you are filing Schedule R for. Note that this must be the same as the quarter indicated on Form 941 that Schedule R is being filed alongside.

Client’s Allocated Enter the totals Table

Each row or Line of the table should correspond to a different client with the exception of Lines 6 to 9. Make sure to provide the necessary information in each column to account for all of the allocations made for each client. If there are more clients than

Column A

Enter the client’s EIN.

Column B (CPEO Use Only)

Enter a code to report the type of wages, tips, and other compensation paid to the individual(s) performing services for the client. If more than one type of wages, tips, or other compensation was paid, you must use more than one line to report for that client and enter the applicable code for each line. The following four codes are the only entries that can be made in column B:

• A: Wages, tips, and other compensation paid under section 3511(a).
• B: Wages, tips, and other compensation paid under section 3511(c).
• C: Wages, tips, and other compensation not reported under code A or code B paid as a payor under a service agreement described in Regulations section 31.3504-2(b)(2).
• D: Wages, tips, and other compensation paid as an agent under Regulations section 31.3504-1.

Column C.

Enter the number of employees who received wages, tips, or other compensation for the pay period for the listed client from Form 941, line 1.

Column D.

Enter the wages, tips, and other compensation allocated to the listed client EIN from Form 941, line 2.

Column E.

Enter the total federal income tax withheld from wages, tips, and other compensation allocated to the listed client EIN from Form 941, line 3.

Column F.

Enter the total qualified sick leave wages and qualified family leave wages paid after March 31, 2020, for leave taken before April 1, 2021, allocated to the listed client EIN from Form 941, lines 5a(i) and 5a(ii), column 1.

Column G.

Enter the total social security tax allocable to taxable social security wages (which includes qualified sick and family leave wages for leave taken after March 31, 2021) and taxable social security tips allocated to the listed client EIN from Form 941, lines 5a and 5b, column 2.

Column H.

Enter the amount of medicare tax allocated to the listed client EIN from Form 941, line 5c, column 2.

Column I.

Enter the total social security and Medicare taxes allocated to the listed client EIN from Form 941, line 5e. This amount includes Additional Medicare Tax withholding.

Column J.

Section 3121(q) Notice and Demand—Tax due on unreported tips allocated to the listed client EIN from Form 941, line 5f.

Column K.

Qualified small business payroll tax credit for increasing research activities allocated to the listed client EIN from Form 941, line 11a. You must attach a separate Form 8974 for each client claiming this credit.

Column L.

Enter the total credit for qualified sick and family leave wages for leave taken before April 1, 2021, nonrefundable and refundable portions, allocated to the listed client EIN from Form 941, lines 11b and 13c.

Column M.

Enter the total employee retention credit, nonrefundable and refundable portions, allocated to the listed client EIN from Form 941, lines 11c and 13d.

Column N.

Enter the total credit for qualified sick and family leave wages for leave taken after March 31, 2021, nonrefundable and refundable portions, allocated to the listed client EIN from Form 941, lines 11d and 13e.

Column O.

Enter the total COBRA premium assistance credit, nonrefundable and refundable portions, allocated to the listed client EIN from Form 941, lines 11e and 13f.

Column P.

Number of individuals provided COBRA premium assistance allocated to the listed client EIN from Form 941, line 11f.

Column Q.

Enter the total taxes after adjustments and nonrefundable credits allocated to the listed client EIN from Form 941, line 12.

Column R.

Enter the total deposits for this quarter, including overpayment applied from a prior quarter and overpayments applied from Form 941-X, 941-X (PR), 944-X, or 944-X (SP) filed in the current quarter allocated to the listed client EIN from Form 941, line 13a. Include any payment made with the return allocated to the listed client EIN.

Column S.

Enter the total advances received from filing Form(s) 7200 for the quarter allocated to the listed client EIN from Form 941, line 13h.

Column T.

Enter Y (Yes) or N (No) if the listed client EIN is eligible for the employee retention credit solely because the business is a recovery startup business. Answer "Y" if the client would have checked the box on Form 941, line 18b, if they were filing their own return.

Column U.

Enter the total amount of qualified health plan expenses allocable to qualified sick and family leave wages for leave taken before April 1, 2021, allocated to the listed client EIN from Form 941, lines 19 and 20.

Column V.

Enter the total amount of qualified wages and qualified health plan expenses for the employee retention credit allocated to the listed client EIN from Form 941, lines 21 and 22.

Column W.

Enter the total amount of qualified sick leave wages for leave taken after March 31, 2021, and any amounts under certain collectively bargained agreements allocable to those wages allocated to the listed EIN from Form 941, lines 23 and 25.

Column X.

Enter the total amount of qualified health plan expenses allocable to qualified sick and family leave wages for leave taken after March 31, 2021, allocated to the listed client EIN from Form 941, lines 24 and 27.

Column Y.

Enter the total amount of qualified family leave wages for leave taken after March 31, 2021, and any amounts under certain collectively bargained agreements allocable to those wages allocated to the listed EIN from Form 941, lines 26 and 28.

Line 6

Add Lines 1 through 5 and enter the sum for each column.

Line 7

Enter the combined subtotal from Line 9 of all attached continuation sheets for Schedule R.

Line 8

Enter the Form 941 amounts for employees.

Line 9 (First Page)

Add Lines 6, 7, and 8 and enter the sum for each column.

Line 9 (Continuation Sheet)

Enter the subtotals for clients from lines 1 through 8.

Tips when filling out Schedule R Form 941

Considering the length of Schedule R Form 941, it is very important to make sure that one is putting the correct and necessary information in each part to avoid any legal issues.

Double-check the information entered. Make sure that you have entered the correct information in the appropriate fields. It may be beneficial to consult the instructions of Schedule R Form 941 on the IRS website if you require more details on what must be entered in the form.

Practice Good Contract Management. Keep a copy of this form (filled out) in a safe place. This is to make sure that you have a copy of it ready when necessary, whether for legal purposes or simply to serve as a record or backup.