General Instructions:

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 (Circular E) or visit the IRS website at www.irs.gov/businesses and click on the Employment Taxes link under Businesses Topics.

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's portion of social security and Medicare taxes. This portion of social security and Medicare taxes is not withheld from employees.

Who Must File Form 941?

Use Form 941 to report the following amounts.

  • Wages you have paid.

  • Tips your employees have received.

  • Federal income tax you withheld.

  • Both the employer's and the employee's 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.

Do not 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.

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.

  • Seasonal employers do not 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 will not file a return for one or more quarters during the year, check the box on line 16 every quarter you file Form 941. See section 12 of Pub. 15 (Circular E) for more information.

  • Employers of household employees do not usually file Form 941. See Pub. 926, Household Employer's Tax Guide, and Schedule H (Form 1040), Household Employment Taxes, for more information.

  • Employers of farm employees do not usually file Form 941. See Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, and Pub. 51 (Circular A), Agricultural Employer's Tax Guide.

If none of the above exceptions applies and you have not filed a final return, you must file Form 941 each quarter even if you did not pay wages during the quarter. Use IRS e-file, if possible.

What if You Reorganize or Close Your Business?

If You Sell or Transfer Your Business . . .

If you sell or transfer your business, 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 section 1 of Pub. 15 (Circular E). 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 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 15 and enter the date you last 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 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, Wage and Tax Statement, 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 are a seasonal employer or are filing your final return. See Seasonal employers and If Your Business Has Closed above.

File Form 941 only once for each quarter. If you filed electronically, do not 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 Ends Form 941 
Is Due
1. January, February, March March 31 April 30
2. April, May, June June 30 July 31
3. July, August, September September 30 October 31
4. October, November, December December 31 January 31

For example, you generally must 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 a quarter, you have 10 more days after the due date to file your Form 941.

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 on or before the due date. If you do not follow these guidelines, we will consider Form 941 filed when it is actually received. See Pub. 15 (Circular E) for more information on IRS-designated private delivery services.

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 page 2. Do not 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 on Form SS-4, Application for Employer Identification Number. For example, if you are 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.

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 are not 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 1-800-829-4933.

  If you do not have an EIN, you may apply for one online. Go to IRS.gov and click on the Apply for an EIN Online link under Tools. You may also apply for an EIN by faxing or mailing Form SS-4 to the IRS. If you have not received your EIN by the due date of Form 941, write “Applied For” and the date you applied in this entry space.

  
If you are filing your tax return electronically, a valid EIN is required at the time the return is filed. If a valid EIN is not provided, the return will not be accepted. This may result in penalties.

  
Always be sure the EIN on the form you file exactly matches the EIN the IRS assigned to your business. Do not use your SSN or ITIN on forms that ask for an EIN. 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...   For a definition of “responsible party” and how to notify the IRS of a change in the identity of your responsible party, see the Form 8822-B instructions. 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. Do not mail Form 8822-B with your Form 941.

Check the Box for the Quarter

Under “Report for this Quarter of 2014” at the top of Form 941, check the appropriate box of the quarter for which you are 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.

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 are typing or using a computer to complete your form. Portable Document Format (PDF) forms on IRS.gov have fillable fields with acceptable font specifications.

  • Do not 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.

  • Leave blank any data field (except lines 1, 2, and 10) 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 and attachments.

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

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.

  • The IRS 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 (Circular E) and Pub. 596, Earned Income Credit (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 do not 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 
(Circular E) and the Instructions for Schedule D (Form 941).

Where Should You File?

Where you file depends on whether you include a payment with Form 941.

If you are in . . . Without a  
payment . . .
With a payment . . .
Special filing addresses for exempt organizations; federal, state, and local governmental entities; and Indian tribal governmental entities;  
regardless of location
Department of the Treasury  
Internal Revenue Service 
Ogden, UT  
84201-0005
Internal Revenue Service  
P.O. Box 37941 
Hartford, CT  
06176-7941
Connecticut 
Delaware 
District of Columbia 
Florida 
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  
Wisconsin
Department of the Treasury  
Internal Revenue Service  
Cincinnati, OH  
45999-0005
Internal Revenue Service  
P.O. Box 804522 
Cincinnati, OH  
45280-4522
Alabama  
Alaska  
Arizona  
Arkansas  
California  
Colorado  
Hawaii  
Idaho  
Iowa  
Kansas  
Louisiana  
Minnesota  
Mississippi
Missouri  
Montana  
Nebraska  
Nevada  
New Mexico  
North Dakota  
Oklahoma  
Oregon  
South Dakota  
Texas  
Utah  
Washington  
Wyoming
Department of the Treasury  
Internal Revenue Service  
Ogden, UT  
84201-0005
Internal Revenue Service  
P.O. Box 37941 
Hartford, CT  
06176-7941
No legal residence or principal place of business in any state Internal Revenue Service  
P.O. Box 409101 
Ogden, UT 84409
Internal Revenue Service  
P.O. Box 37941 
Hartford, CT  
06176-7941

Your filing address may have changed from that used to file your employment tax return in prior years. Do not send Form 941 or any payments to the SSA. Private delivery services cannot deliver to P.O. boxes.

Depositing Your Taxes

The IRS has issued regulations under section 6302 which provide that you must deposit all depository taxes electronically by electronic funds transfers. For more information about electronic funds transfers, see Federal tax deposits must be made by electronic funds transfer under Reminders.

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 (line 10) are less than $2,500 for the current quarter or the preceding quarter, and you did not incur a $100,000 next-day deposit obligation during the current quarter. You do not have to make a deposit. To avoid a penalty, you must pay the amount in full with a timely filed return or you must deposit the amount timely. For more information on paying with a timely filed return, see the instructions for line 12, later. If you are not sure your total tax liability for the current quarter will be less than $2,500 (and your liability for the preceding quarter was not less than $2,500), make deposits using the semiweekly or monthly rules so you won't be subject to failure to deposit penalties.

  • If your total taxes (line 10) are $2,500 or more for the current quarter and the preceding quarter. You must make deposits according to your deposit schedule. See section 11 of Pub. 15 (Circular E) for information and rules about federal tax deposits.

You may reduce your deposits during the quarter by the amount of the COBRA premium assistance credit that will be reflected on your Form 941-X, only if you use the claim process and not the adjustment process to claim the COBRA premium assistance credit on your Form 941-X for the quarter.

The COBRA premium assistance credit is treated as a credit on the first day of the return period (that is, January 1, April 1, July 1, or October 1). However, because the credit is now claimed on Form 941-X filed AFTER submission of the Form 941, an employer that reduces its required deposits in anticipation of the credit will receive a system-generated notice reflecting a balance due and associated penalties and interest, if applicable. The balance due, including any related penalties and interest, resulting from the reduction in deposits in anticipation of the credit will be abated when the credit is applied. Such abatement will generally occur without any further action from the employer.

Alternatively, to prevent triggering a system-generated balance due notice, the employer can make its deposits without a reduction in anticipation of the COBRA premium assistance credit and follow the ordinary procedures for filing a claim for refund or adjusted return using Form 941-X.

When Must You Deposit Your Taxes?

Determine if You Are 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 is not 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 four-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 (Circular E) for details. If you filed Form 944 in either 2012 or 2013, your lookback period is the 2012 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 are a monthly schedule depositor.

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

If you are 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 (Circular E) for guidance.

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.

  • 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 (Circular E) for details.

Use Form 843, Claim for Refund and Request for Abatement, to request abatement of assessed penalties or interest. Do not request abatement of assessed penalties or interest on Form 941 or Form 941-X.

A trust fund recovery penalty may apply if federal income, social security, or Medicare taxes that must be withheld are not withheld or are not deposited or paid. The penalty is the full amount of the unpaid trust fund tax. This penalty may apply when these unpaid taxes cannot be collected from the employer. The trust fund recovery penalty may be imposed on all people the IRS determines to be responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so. For details, see section 11 of Pub. 15 (Circular E).

Adjustment of Tax on Tips

If, by the 10th of the month after the month you received an employee's report on tips, you do not have enough employee funds available to withhold the employee's 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 an adjustment on line 9 the total uncollected employee share of the social security and Medicare taxes.


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