Specific Instructions:

Part 1:Answer These Questions for This Quarter

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

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

  • Household employees,

  • Employees in nonpay status for the pay period,

  • Farm employees,

  • Pensioners, or

  • Active members of the Armed Forces.

If you enter “250” or more on line 1, you must file Forms W-2 electronically. For details, call the SSA at 1-800-772-6270 or visit SSA's Employer W-2 Filing Instructions & Information website at www.socialsecurity.gov/employer.

2.Wages, Tips, and Other Compensation

Enter amounts on line 2 that would also be included in box 1 of your employees' Forms W-2. Include sick pay paid by a third party if you were given timely notice of the payments and the third party transferred liability for the employer's taxes to you. See the General Instructions for Forms W-2 and W-3 for details.

If you are a third-party payer of sick pay, do not include sick pay that you paid to policyholders' employees here if you gave the policyholders timely notice of the payments.

3.Federal Income Tax Withheld From Wages, Tips, and Other Compensation

Enter the federal income tax you withheld (or were required to withhold) from your employees on this quarter's wages, tips, taxable fringe benefits, and supplemental unemployment compensation benefits. Do not include any income tax withheld by a third-party payer of sick pay even if you reported it on Forms W-2. You will reconcile this difference on Form W-3. Also include here any excise taxes you were required to withhold on golden parachute payments (section 4999).

If you are a third-party payer of sick pay, enter the federal income tax you withheld (or were required to withhold) on third-party sick pay here.

4.If No Wages, Tips, and Other Compensation are Subject to Social Security or Medicare Tax . . .

If no wages, tips, and other compensation on line 2 are subject to social security or Medicare tax, check the box on line 4. If this question does not apply to you, leave the box blank. For more information about exempt wages, see section 15 of Pub. 15 (Circular E) and section 4 of  
Pub. 15-A, Employer's Supplemental Tax Guide.

If you are a government employer, wages you pay are not automatically exempt from social security and Medicare taxes. Your employees may be covered by law or by a voluntary Section 218 Agreement with the SSA. For more information, see Pub. 963, Federal-State Reference Guide.

5a–5e.Taxable Social Security and Medicare Wages and Tips

5a. Taxable social security wages.

Enter the total wages, sick pay, and taxable fringe benefits subject to social security taxes you paid to your employees during the quarter. For this purpose, sick pay includes payments made by an insurance company to your employees for which you received timely notice from the insurance company. See section 6 in Pub. 15-A for more information about sick pay reporting.

Enter the amount before deductions. Do not include tips on this line. For information on types of wages subject to social security taxes, see section 5 of Pub. 15 (Circular E).

For 2014, the rate of social security tax on taxable wages is 6.2% (.062) each for the employer and employee or 12.4% (.124) for both. Stop paying social security tax on and entering an employee's wages on line 5a when the employee's taxable wages (including tips) reach $117,000 for the year. However, continue to withhold income and Medicare taxes for the whole year on wages and tips even when the social security wage base of $117,000 has been reached.

line 5a (column 1)
x.124  
line 5a (column 2)

5b. Taxable social security tips.

Enter all tips your employees reported to you during the quarter until the total of the tips and wages for an employee reach $117,000 for the year. Include all tips your employee reported to you even if you were unable to withhold the employee tax of 6.2%.

Your employee must report cash tips to you by the 10th day of the month after the month the tips are received. The report should include charged tips (for example, credit and debit card charges) you paid over to the employee for charge customers, tips the employee received directly from customers, and tips received from other employees under any tip-sharing arrangement. Both directly and indirectly tipped employees must report tips to you. No report is required for months when tips are less than $20. Employees may use Form 4070, Employee's Report of Tips to Employer (available only in Pub. 1244, Employee's Daily Record of Tips and Report to Employer), or submit a written statement or electronic tip record.

Do not include allocated tips on this line. Instead, report them on Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips. Allocated tips are not reportable on Form 941 and are not subject to withholding of federal income, social security, or Medicare taxes.

line 5b (column 1)
x .124  
line 5b (column 2)

5c. Taxable Medicare wages & tips.

Enter all wages, tips, sick pay, and taxable fringe benefits that are subject to Medicare tax. Unlike social security wages, there is no limit on the amount of wages subject to Medicare tax.

The rate of Medicare tax is 1.45% (.0145) each for the employer and employee or 2.9% (.029) for both. Include all tips your employees reported during the quarter, even if you were unable to withhold the employee tax of 1.45%.

line 5c (column 1)
x .029  
line 5c (column 2)

For more information on tips, see section 6 of Pub. 15 
(Circular E).

5d. Taxable wages & tips subject to Additional Medicare Tax withholding.

Enter all wages, tips, sick pay, and taxable fringe benefits that are subject to Additional Medicare Tax withholding. You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Additional Medicare Tax is only imposed on the employee. There is no employer share of Additional Medicare Tax. All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold.

For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Pub. 15 (Circular E). For more information on Additional Medicare Tax, visit IRS.gov and enter “Additional Medicare Tax” in the search box.

Once wages and tips exceed the $200,000 withholding threshold, include all tips your employees reported during the quarter, even if you were unable to withhold the employee tax of 0.9%.

line 5d (column 1)
x .009  
line 5d (column 2)

5e. Total social security and Medicare taxes.

Add the column 2 amounts on lines 5a–5d. Enter the result on line 5e.

5f. Section 3121(q) Notice and Demand—Tax Due on Unreported Tips

Enter the tax due from your Section 3121(q) Notice and Demand on line 5f. The IRS issues a Section 3121(q) Notice and Demand to advise an employer of the amount of tips received by employees who failed to report or underreported tips to the employer. An employer is not liable for the employer share of the social security and Medicare taxes on unreported tips until notice and demand for the taxes is made to the employer by the IRS in a Section 3121(q) Notice and Demand. The tax due may have been determined from tips reported to the IRS on employees' Forms 4137, Social Security and Medicare Tax on Unreported Tip Income, or other tips that were not reported to their employer as determined by the IRS during an examination. For additional information, see Rev. Rul. 2012-18, 2012-26 I.R.B. 1032, available at www.irs.gov/irb/2012-26_IRB/ar07.html.

Deposit the tax within the time period required under your deposit schedule to avoid any possible deposit penalty. The tax is treated as accumulated by the employer on the “Date of Notice and Demand” as printed on the Section 3121(q) Notice and Demand. The employer must include this amount on the appropriate line of the record of federal tax liability (Part 2 of Form 941 for a monthly schedule depositor or Schedule B (Form 941) for a semiweekly schedule depositor).

6.Total Taxes Before Adjustments

Add the total federal income tax withheld from wages, tips, and other compensation (line 3), the total social security and Medicare taxes before adjustments (line 5e), and any tax due under a Section 3121(q) Notice and Demand (line 5f). Enter the result on line 6.

7–9.Tax Adjustments

Enter tax amounts on lines 7–9 that result from current quarter adjustments. Use a minus sign (if possible) to show an adjustment that decreases the total taxes shown on line 6 instead of parentheses. Doing so enhances the accuracy of our scanning software. For example, enter “-10.59” instead of “(10.59).” However, if your software only allows for parentheses in entering negative amounts, you may use them.

Current quarter's adjustments.   In certain cases, you must adjust the amounts you entered as social security and Medicare taxes in column 2 of lines 5a–5d to figure your correct tax liability for this quarter's Form 941. See section 13 of Pub. 15 (Circular E).

7.Current quarter's adjustment for fractions of cents.

Enter adjustments for fractions of cents (due to rounding) relating to the employee share of social security and Medicare taxes withheld. The employee share of amounts shown in column 2 of lines 5a–5d may differ slightly from amounts actually withheld from employees' pay due to the rounding of social security and Medicare taxes based on statutory rates.

8.Current quarter's adjustment for sick pay.

Enter the adjustment for the employee share of social security and Medicare taxes that were withheld and deposited by your third-party sick pay payer with regard to sick pay paid by the third-party. These wages should be included on line 5a, line 5c, and, if the withholding threshold is met, line 5d. If you are the third-party sick pay payer, enter the adjustment for any employer share of these taxes required to be paid by the employer.

9.Current quarter's adjustments for tips and group-term life insurance.

Enter adjustments for:

  • Any uncollected employee share of social security and Medicare taxes on tips, and

  • The uncollected employee share of social security and Medicare taxes on group-term life insurance premiums paid for former employees.

Prior quarter's adjustments.   If you need to correct any adjustment reported on a previously filed Form 941, complete and file Form 941-X. Form 941-X is an adjusted return or claim for refund and is filed separately from Form 941. See section 13 of Pub. 15 (Circular E).

10.Total Taxes After Adjustments

Combine the amounts shown on lines 6–9 and enter the result on line 10.

  • If line 10 is less than $2,500 or line 10 on the preceding quarterly return was less than $2,500, and you did not incur a $100,000 next-day deposit obligation during the current quarter. You may pay the amount with Form 941 or you may deposit the amount. 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 below.

  • If line 10 is $2,500 or more and line 10 on the preceding quarterly return was $2,500 or more, or if you incurred a $100,000 next-day deposit obligation during the current quarter. You must make deposits according to your deposit schedule. The amount shown on line 10 must equal the “Total liability for quarter” shown on line 14 or the “Total liability for the quarter” shown on Schedule B (Form 941).

For more information and rules about federal tax deposits, see Depositing Your Taxes, earlier, and section 11 of Pub. 15 (Circular E).

If you are a semiweekly depositor, you must complete Schedule B (Form 941). If you fail to complete and submit Schedule B (Form 941), the IRS may assert deposit penalties based on available information.

11.Total Deposits for This Quarter

Enter your deposits for this quarter, including any overpayment from a prior quarter. Also include in the amount shown any overpayment that you applied from filing Form 941-X or Form 944-X, Adjusted Employer's ANNUAL Federal Tax Return or Claim for Refund, in the current quarter.

12.Balance Due

If line 10 is more than line 11, enter the difference on line 12. Otherwise, see Overpayment below.

You do not have to pay if line 12 is under $1. Generally, you should have a balance due only if your total taxes (line 10) for the current quarter or preceding quarter are less than $2,500, and you did not incur a $100,000 next-day deposit obligation during the current quarter. However, see section 11 of Pub. 15 (Circular E) for information about payments made under the accuracy of deposits rule.

You may pay the amount shown on line 12 using EFTPS, credit card, debit card, check, money order, or electronic funds withdrawal (EFW). Do not use a credit card, debit card, check, money order, or EFW to pay taxes that were required to be deposited. For more information on electronic payment options, visit the IRS website at www.irs.gov/e-pay.

If you pay by EFTPS, credit card, or debit card, file your return using the Without a payment address under Where Should You File, earlier, and do not file Form 941-V, Payment Voucher.

If you pay by check or money order, make it payable to the “United States Treasury.” Enter your EIN, Form 941, and the tax period on your check or money order. Complete Form 941-V and enclose with Form 941.

If line 10 is $2,500 or more and you have deposited all taxes when due, the balance due on line 12 should be zero, unless you have reduced your deposits in anticipation of filing a Form 941-X to claim COBRA premium assistance credits. See Depositing Your Taxes, earlier.

If you are required to make deposits and instead pay the taxes with Form 941, you may be subject to a penalty. See Must You Deposit Your Taxes, earlier.

13.Overpayment

If line 11 is more than line 10, enter the difference on line 13. Never make an entry on both lines 12 and 13.

If you deposited more than the correct amount for the quarter, you can choose to have the IRS either refund the overpayment or apply it to your next return. Check only one box on line 13. If you do not check either box or if you check both boxes, generally we will apply the overpayment to your account. We may apply your overpayment to any past due tax account that is shown in our records under your EIN.

If line 13 is under $1, we will send a refund or apply it to your next return only if you ask us in writing to do so.

Complete Both Pages

You must complete both pages of Form 941 and sign on page 2. Failure to do so may delay processing of your return.

Part 2:Tell Us About Your Deposit Schedule and Tax Liability for This Quarter

14.Tax Liability for the Quarter

  • De minimis exception. If line 10 is less than $2,500 or line 10 on the preceding quarterly return was less than $2,500, and you did not incur a $100,000 next-day deposit obligation during the current quarter, check the appropriate box on line 14 and go to Part 3.

    If you meet the de minimis exception based on the prior quarter and line 10 for the current quarter is $100,000 or more, you must provide a record of your federal tax liability. If you are a monthly schedule depositor, complete the deposit schedule on line 14. If you are a semiweekly schedule depositor, attach Schedule B (Form 941).

  • If you reported $50,000 or less in taxes during the lookback period, you are a monthly schedule depositor unless the $100,000 Next-Day Deposit Rule discussed in section 11 of Pub. 15 (Circular E) applies. Check the appropriate box on line 14 and enter your tax liability for each month in the quarter. Add the amounts for each month. Enter the result in the Total liability for quarter box.

    Note that your total tax liability for the quarter must equal your total taxes shown on line 10. If it does not, your tax deposits and payments may not be counted as timely. Do not change your tax liability on line 14 by adjustments reported on any Forms 941-X.

    You are a monthly schedule depositor for the calendar year if the amount of your Form 941 taxes reported for the lookback period is $50,000 or less. The lookback period is the four consecutive quarters ending on June 30 of the prior year. For 2014, the lookback period begins July 1, 2012, and ends June 30, 2013. For details on the deposit rules, see section 11 of Pub. 15 (Circular E). If you filed Form 944 in either 2012 or 2013, your lookback period is the 2012 calendar year.

    The amounts entered on line 14 are a summary of your monthly tax liability, not a summary of deposits you made. If you do not properly report your liabilities when required or if you are a semiweekly schedule depositor and enter your liabilities on line 14 instead of on Schedule B (Form 941), you may be assessed an “averaged” failure-to-deposit (FTD) penalty. See Deposit Penalties in section 11 of Pub. 15 (Circular E) for more information.

     

  • If you reported more than $50,000 of taxes for the lookback period, you are a semiweekly schedule depositor. Check the appropriate box on line 14.

    You must complete Schedule B (Form 941) and submit it with your Form 941. Do not use Schedule B (Form 941) if you are a monthly schedule depositor.

    Do not change your tax liability on Schedule B (Form 941) by adjustments reported on any Forms 941-X.

Part 3:Tell Us About Your Business

In Part 3, answer only those questions that apply to your business. If the questions do not apply, leave them blank and go to Part 4.

15.If Your Business Has Closed . . .

If you go out of business or stop paying wages, you must file a final return. To tell the IRS that a particular Form 941 is your final return, check the box on line 15 and enter the date you last paid wages in the space provided. For additional filing requirements, see If Your Business Has Closed, earlier.

16.If You are a Seasonal Employer . . .

If you hire employees seasonally—such as for summer or winter only—check the box on line 16. Checking the box tells the IRS not to expect four Forms 941 from you throughout the year because you have not paid wages regularly.

Generally, we will not ask about unfiled returns if you file at least one return showing tax due each year. However, you must check the box every time you file a Form 941.

Also, when you complete Form 941, be sure to check the box on the top of the form that corresponds to the quarter reported.

Part 4:May We Speak With Your Third-party Designee?

If you want to allow an employee, a paid tax preparer, or another person to discuss your Form 941 with the IRS, check the “Yes” box in Part 4. Enter the name, phone number, and the five-digit personal identification number (PIN) of the specific person to speak with—not the name of the firm that prepared your tax return. The designee may choose any five numbers as his or her PIN.

By checking “Yes,” you authorize the IRS to talk to the person you named (your designee) about any questions we may have while we process your return. You also authorize your designee to do all of the following.

  • Give us any information that is missing from your return.

  • Call us for information about processing your return.

  • Respond to certain IRS notices that you have shared with your designee about math errors and return preparation. The IRS will not send notices to your designee.

You are not authorizing your designee to bind you to anything (including additional tax liability) or to otherwise represent you before the IRS. If you want to expand your designee's authorization, see Pub. 947, Practice Before the IRS and Power of Attorney.

The authorization will automatically expire 1 year from the due date (without regard to extensions) for filing your Form 941. If you or your designee want to terminate the authorization, write to the IRS office for your location using the Without a payment address under Where Should You File, earlier.

Part 5:Sign Here (Approved Roles)

Complete all information in Part 5 and sign Form 941. The following persons are authorized to sign the return for each type of business entity.

•Sole proprietorship—   The individual who owns the business.

•Corporation (including a limited liability company (LLC) treated as a corporation)—   The president, vice president, or other principal officer duly authorized to sign.

•Partnership (including an LLC treated as a partnership) or unincorporated organization—   A responsible and duly authorized member, partner, or officer having knowledge of its affairs.

•Single member LLC treated as a disregarded entity for federal income tax purposes—   The owner of the LLC or a principal officer duly authorized to sign.

•Trust or estate—   The fiduciary.

Form 941 may be signed by a duly authorized agent of the taxpayer if a valid power of attorney has been filed.

Alternative signature method.   Corporate officers or duly authorized agents may sign Form 941 by rubber stamp, mechanical device, or computer software program. For details and required documentation, see Rev. Proc. 2005-39, 2005-28 I.R.B. 82, at www.irs.gov/irb/2005-28_IRB/ar16.html.

Paid Preparer Use Only

A paid preparer must sign Form 941 and provide the information in the Paid Preparer Use Only section of Part 5 if the preparer was paid to prepare Form 941 and is not an employee of the filing entity. Paid preparers must sign paper returns with a manual signature. The preparer must give you a copy of the return in addition to the copy to be filed with the IRS.

If you are a paid preparer, enter your Preparer Tax Identification Number (PTIN) in the space provided. Include your complete address. If you work for a firm, enter the firm's name and the EIN of the firm. You can apply for a PTIN online or by filing Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal. For more information about applying for a PTIN online, visit the IRS website at www.irs.gov/ptin. You cannot use your PTIN in place of the EIN of the tax preparation firm.

Generally, do not complete this section if you are filing the return as a reporting agent and have a valid Form 8655, Reporting Agent Authorization, on file with the IRS. However, a reporting agent must complete this section if the reporting agent offered legal advice, for example, advising the client on determining whether its workers are employees or independent contractors for federal tax purposes.

How to Order Forms, Instructions, and Publications from the IRS

Visit www.irs.gov/formspubs.

Call 1-800-TAX-FORM (1-800-829-3676).

Other IRS Forms, Notices, and Publications You May Need

Form SS-4, Application for Employer Identification Number
Form W-2, Wage and Tax Statement
Form W-2c, Corrected Wage and Tax Statement
Form W-3, Transmittal of Wage and Tax Statements
Form W-3c, Transmittal of Corrected Wage and Tax Statements
Form W-4, Employee's Withholding Allowance Certificate
Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return
Form 941-X, Adjusted Employer's QUARTERLY Federal Tax Return or Claim for Refund
Form 943, Employer's Annual Federal Tax Return for Agricultural Employees
Form 944, Employer's ANNUAL Federal Tax Return
Form 944-X, Adjusted Employer's ANNUAL Federal Tax Return or Claim for Refund
Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips
Form 8655, Reporting Agent Authorization
Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC)
Pub. 15 (Circular E), Employer's Tax Guide
Pub. 15-A, Employer's Supplemental Tax Guide
Pub. 15-B, Employer's Tax Guide to Fringe Benefits
Pub. 596, Earned Income Credit
Pub. 1244, Employee's Daily Record of Tips and Report to Employer
Pub. 926, Household Employer's Tax Guide
Schedule B (Form 941), Report of Tax Liability for Semiweekly Schedule Depositors
Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations
Schedule H (Form 1040), Household Employment Taxes
Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers


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