3.11.13  Employment Tax Returns (Cont. 1)

3.11.13.14 
Form 941, 941-PR and 941-SS (Rev. 2005 and subsequent) Return Perfection and Line Editing

3.11.13.14.9  (01-01-2014)
Lines 6a - 6e, (Tax Periods 201006-201012)- Hiring Incentives to Restore Employment (HIRE) Act

  1. Qualified employers who hired unemployed workers between February 3, 2010, and January 1, 2011, may qualify for a 6.2 percent payroll tax incentive. The incentive, in effect, exempts the employers from their share of Social Security taxes on wages paid to these workers from March 19, 2010, through December 31, 2010. The payroll tax exemption applied to Form 941, Form 941-PR, and Form 941-SS. This payroll tax exemption will have no effect on the employee's future Social Security benefits, and employers are still required to withhold the employee's 6.2 percent share of Social Security as well as income taxes. The employer and employee's shares of Medicare taxes would also still apply to any wages paid.

    Note:

    Taxable businesses and tax-exempt organizations qualify for the retention credit. Qualified employers in all five U.S. territories (i.e., American Samoa, Commonwealth of the Northern Mariana Islands, Puerto Rico, etc.) that are subject to social security tax also qualify for the retention credit. Federal, state and local government employers generally do not qualify for the retention credit. However, public colleges and universities can qualify. Indian tribal governments also qualify.

  2. Lines 6a-6e are all transcription lines. Accept the taxpayer's figures for Lines 6a through 6d (Rev 2010) . See IRM 3.11.13.14.10 for Line 6e procedures (Tax Periods 201006 through 201012)

  3. The HIRE Act was not extended beyond 12/31/2010. Therefore, Form 941, Form 941-PR, and Form 941-SS (Rev 2011) were revised by shading out lines 6a through 6d.

  4. If a taxpayer uses a Form 941, Form 941-PR, or Form 941-SS prior revision to file for a quarter in year 2011 quarter and enters on line(s) 6a through 6d an entry, disallow the entry by placing an asterisk to the left of the amount. Then, make any needed corrections down the remainder of the return.

3.11.13.14.10  (01-01-2014)
Line 6e, (Tax Period 201003 through 201112) -Total Taxes Before Adjustments

  1. Line 6e, Total Taxes Before Adjustments, (Rev 2010 ) for tax periods 201003 through 201112 is the sum of lines 3, 5d, and 5e.

  2. Line 6e is a T-line.

  3. The entry should be positive and entered in dollars and cents.

3.11.13.14.11  (01-01-2014)
Line 6, Total Taxes Before Adjustments (Domestic Only) (Tax Periods 201203 through 201312, 201003 and Prior)

  1. Line 6, (Tax Periods 2012 and 2013) represents Total Taxes Before Adjustments. This is a T-Line.

  2. Line 6, (Tax Periods 201003 and prior) represents Total Taxes Before Adjustments, but it was not a T-Line. However, it may be necessary to compute this line in the following instances:

    If Then
    Line 6 is blank, Compute only if needed to compute the Line 8 amount.
    Line 6 contains an entry, Accept the taxpayer’s entry.

3.11.13.14.12  (01-01-2014)
Line 7, (Tax Period 201103 and subsequent) -Current Quarter's Adjustments for Fractions of Cents

  1. An entry on line 7 can be positive, negative or minus on Form 941, Form 941-PR, or Form 941-SS.

  2. The entry on line 7 does not require any substantiation or supporting statement. Therefore, accept all taxpayer entries on this line.

  3. If the taxpayer's entry is correct and in dollars only, the examiner should not re-enter the amount in dollars and cents.

3.11.13.14.13  (01-01-2014)
Line 7, Tax Adjustments – General (Rev 2010 and prior)

  1. Entries on line 7a through 7c (Rev 2010 and prior) represent adjustments (e.g., Fractions of cents, Sick Pay, Group Term Life Insurance or Tips) to the net tax of the Form 941 being filed.

  2. Rev 2005 through 2008 also had lines 7d through 7g for additional adjustments (e.g., Federal Income Tax Withholding, Social Security and Medicare Tax, Special Additions to Federal Income Tax Withholding, and Special Additions for Social Security and Medicare) to the Form 941 tax.

  3. If an examiner enters an amount to one of the adjustment lines, the entry should be in dollars and cents. However, if a taxpayer's entry is in dollars only and is correct, the examiner should not re-enter the amount to dollars and cents.

3.11.13.14.13.1  (01-01-2014)
Line 7a, Fractions of Cents, (Rev 2005-2010)
Line 7b, Sick Pay, (Rev 2005-2010)
Line 7c, Adjustments for Tips and Group-Term, (Rev 2005-2010)

  1. Entries on Lines 7a, 7b, or 7c can be positive, negative or minus amounts.

  2. An entry on Line 7a, 7b, or 7c does not require a Form 941-X for substantiation. Therefore, accept the taxpayer’s entry.

    Note:

    If Form 941-X is attached to Form 941, see IRM 3.11.13.16 for processing procedures.

  3. Accept a Social Security tax adjustment on Line 7b identified as "sick pay" or "disability payment" . The employer will show the employers share of Social Security tax paid by a third-party. If the return is being filed by the third-party payer, the employers share of Social Security tax on sick pay will be shown on Line 7b.

  4. If an examiner enters an amount to Line(s) 7a through 7c, they should enter it in dollars and cents. However, if a taxpayer's entry is correct and in dollars only, the examiner should not re-enter the amount in dollars and cents.

3.11.13.14.13.2  (01-01-2014)
Line 7d, Total Adjustments (Rev. 2009 and Feb. 2010)

  1. The taxpayer's entry in Line 7d, Total Adjustments, represents the total of the amount(s) entered on Lines 7a through 7c.

  2. If there is an amount on one or more of the Line(s) 7a through 7c, but an amount is not shown on Line 7d, do not add Lines 7a through 7c. Leave Line 7d blank as the return was submitted.

  3. Verify an amount on Line 7d by subtracting Line 6 from Line 8.

    1. If the amount on Line 7d is incorrect, edit an asterisk (*) to the left of the amount on Line 7d.

    2. Enter the resulting of Line 8 minus Line 6 to the left of asterisk on Line 7d. If entering a computed result that is a negative, also edit a minus (-).

3.11.13.14.13.3  (01-01-2014)
Line 7d, Current Year Federal Income Tax Withholding (Domestic Only) (Rev. 2005- 2008)

  1. A taxpayer may show an adjustment to correct an error made in:

    1. A prior quarter(s) in a different tax year(s), or

    2. A preceding quarter of the same tax year (TY).

  2. Entries on Line 7d can be positive, negative or a minus (-) amount.

  3. Perfect Line 7d as follows: Note: All line references refer to SCRIPS Form 941, Form 941-PR, Form 941-SS (Rev 2005 through 2008)

    IF AND THEN
    The taxpayer has an entry on Line(s) 7d, 7h and 8, it is a decrease, negative or minus amount, Process the adjustment using the procedures in (4) below.
    The taxpayer has an entry on Line(s) 7d, 7h and 8, it is an increase amount, Process the adjustment using the procedures in (5) below.
    The taxpayer has an entry on Line 7d, Meets all of the following conditions:
    • Entered the same amount on Line(s) 3 and 7d,

    • Provided no explanation or substantiation for the entry on Line 7d, and

    • The entry on Line 7d is not included on Line(s) 7h or 8, or Line(s) 7h or 8 are blank,

    Consider the entry on Line 7d as an incorrect entry. Place an asterisk (*) to the left of entry and continue to process the return.
  4. Process a decrease in Federal Income Tax Withholding to correct errors as follows:

    Note:

    All line references refer to SCRIPS Form 941, Form 941-PR and Form 941-SS (Rev 2005 through 2008)

    IF AND THEN
    A decrease amount is shown on Line 7d, The taxpayer has NOT provided a Form 941-X, supporting statement,
    1. Asterisk (*) to the left of the adjustment amount,

    2. Edit the Form 941 with an Action Trail "CP102/94X" ,

      Note:

      This will cause the return to fall out to ERS; the Action Trail will indicate to the ERS Tax Examiner the correct Taxpayer Notice Code (TPNC) to use when generating the notice to the taxpayer that an X Adjusted Return is needed to process the adjustment.

    3. Continue to process the return.

    .
     

  5. Process an Increase in Federal Income Tax Withholding - Accept any increases in Federal Income Tax Withholding whether or not a Form 941-X, supporting statement, or explanation is attached. If a Form 941-X is attached, verify that the correct entry is shown on Line 7d, (Revision 2005 through 2009) of the return.

3.11.13.14.13.4  (01-01-2014)
Line 7e, Prior Quarters Social Security and Medicare Taxes (Rev 2005 through 2008)

  1. Adjustments to Social Security and Medicare tax may be made on a Form 941 for tax period 2005 through 2008, provided the tax period being adjusted is not barred by Statute. See IRM 3.11.13.33.

  2. See IRM 3.11.13.16, 94X Adjusted Return Procedures, when there is:

    • A prior year (PY) revision (2008 and prior) filed for a 2009 and subsequent Tax Period showing an amount on Line 7e

    • A Form 941 with a Form 941-X or Form 941-X(PR) attached

  3. Perfect Line 7e, as follows:

    Note:

    All line references refer to SCRIPS Form 941, Form 941-PR and Form 941-SS (Rev 2005 through 2008)

    IF AND THEN
    The taxpayer has an entry on Lines 7e, 7h, and 8, is a decrease, negative or minus amount, Process the adjustment using the procedures in (4) below.
    The taxpayer has an entry on Lines 7e, 7h and 8, is an increase amount, Process the adjustment using the procedures in (5) below.
    The taxpayer has an entry on Line 7e, meets all of the following conditions:
    • Same amount on Lines 2 or 5d and 7e,

    • No explanation or substantiation provided for adjustment,

    • The entry on Line 7e is not included on Line(s) 7h or 8, or Line(s) 7h or 8 are blank,

    Consider the entry on Line 7e as an incorrect entry and place an asterisk (*) to the left of the entry. Continue to process the return.

  4. Process a Decrease in Social Security and Medicare Tax as follows:

    Note:

    All line references refer to SCRIPS Form 941, Form 941-PR and Form 941-SS (Rev 2005 through 2008)

    IF AND THEN
    A decrease amount is shown on Line 7e, The taxpayer has NOT provided a , Form 941-X, supporting statement,
    1. Asterisk (*) to the left of the adjustment amount,

    2. Edit the Form 941 with an Action Trail "CP102/94X" ,

      Note:

      This will cause the return to fall out to ERS; the Action Trail will indicate to the ERS Tax Examiner the correct Taxpayer Notice Code (TPNC) to use when generating the notice to the taxpayer that an X Adjusted Return is needed to process the adjustment.

    3. Continue to process the return.

     
     

  5. Process an increase in Social Security and Medicare Tax - Accept any increases in Social Security and Medicare Tax Adjustment whether or not a Form 941-X, supporting statement, or explanation is attached. If a Form 941-X is attached, verify that the correct entry is shown on Line 7e of the return.

3.11.13.14.13.5  (01-01-2014)
Line(s) 7f, Special Additions to Federal Income Tax (Domestic Only), and 7g, Special Additions to Social Security and Medicare ( Rev 2005 through 2008)

  1. An amount on Line(s) 7f, Special Additions to Federal Income tax, and 7g, Special Additions to Social Security and Medicare Tax , represents a correction of income tax (on Line 7f) or Social Security and Medicare tax (on Line 7g) due to a prior Compliance (Examination) review assessment.

  2. See IRM 3.11.13.16, 94X Adjusted Return Procedures, when:

    • A prior year (PY) revision (2008 and prior) filed for a 2009 and subsequent Tax Period showing an amount on Line 7f or 7g

    • A Form 941 with a Form 941-X or Form 941-X(PR) attached

  3. Any amounts entered on Line 7f or 7g should be in dollars and cents.

    Note:

    All line references refer to SCRIPS Form 941, 941-PR and 941-SS (Rev 2005 through 2008)

    IF THEN
    There is an entry on Line(s) 7f or 7g Determine the tax period of the return the taxpayer is filing.
    The tax period was in tax year 2009 and subsequent Edit an asterisk (*) to the left of the entry on Line 7f and/or 7g. Also edit an Action Trail , "CP 102 94X"
    The tax period is in tax year 2008 or prior, Determine whether the entry on Line 7f or 7g was mathematically included in the amount appearing on Line 7h, (or if 7h is blank), Line 8.
    The entry on Line 7f or 7g was mathematically included in an amount appearing on Line 7h, (or if 7h is blank), Line 8,
    1. Edit an asterisk to the left of the adjustment amount on Line 7f and/or 7g, also an Action Trail “CP102 94X ”

    The entry on Line 7f or 7g was not mathematically included in the amount appearing on Line 7h, (or if 7h is blank), Line 8, Review the return and attachments for the adjustment on Line(s) 7f or/and 7g.
    1. If Line 7h is blank, consider the entry on Line 7f and/or 7g to be an erroneous entry. Asterisk (*) to the left of the entry (or entries) and continue to process the return. Note: This will cause the return to fall out to Error Resolution.

3.11.13.14.14  (01-01-2014)
Line 8, (Tax Period 201103 and subsequent) Current Quarter's Adjustment for Sick Pay

  1. An entry on line 8, (tax period 201103 and subsequent) represents the current quarter's adjustment to sick pay.

  2. Accept any Social Security and Medicare tax adjustment on Line 8 identified as "sick pay" or "disability payment" . The employer will show their share of Social Security tax paid by a third-party. If the return is being filed by the third-party payer, the employer's share of Social Security tax on sick pay will be shown on Line 8.

  3. If the taxpayer's entry is correct and in dollars only, the examiner should not re-enter the amount in dollars and cents.

  4. If the taxpayer entered the same amount on Lines 8 and 9 or Line 10 and 14. Verify the amount on Line 10 and Line 14 by following the instructions on the form itself and entered the correct amount on Line 8.

3.11.13.14.15  (01-01-2014)
Line 8, Total Taxes after Adjustment, (Rev 2005- 2010)

  1. Verify a negative amount on line 8 ( Rev 2005 - 2010) by following the directions on the form.

  2. Line 8 must be entered if it is blank or contains a misplaced entry.

    Example:

    Taxpayer has listed zero on Line 8, however Lines 3 and 5 have entries, asterisk the zero and enter correct amount.

    Exception:

    If entering Column(s) 1 or 2 for Line(s) 5a, 5b, or 5c, do not compute line 8.

  3. If Lines 8 and 9 are blank and there is an entry on Line 10, enter the Line 10 amount on Line 8. See Figure 3.11.13-30.

    Figure 3.11.13-30
    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Editing Line 8 from Line 10

3.11.13.14.16  (01-01-2014)
Line 9, (Tax Period 201103 and subsequent) Current Quarter's Adjustment for Tips, Group Life Ins.

  1. An entry on line 9, (tax period 201103 and subsequent) represents the current quarter's adjustment for tips or group term-life insurance.

  2. Accept a Social Security tax adjustment on Line 9 identified as "tips" or "term life insurance" . The employer will show their share of Social Security tax paid by a third-party. If the return is being filed by the third-party payer, the employer's share of Social Security tax on tips or group term-life insurance will be shown on Line 9.

  3. If the taxpayer's entry is correct and in dollars only, the examiner should not re-enter the amount in dollars and cents.

3.11.13.14.17  (01-01-2014)
Line 9, Advance Earned Income Credit (Domestic Only) (Tax periods 201012 and prior)

  1. The Advanced Earned Income Credit (AEIC) was a tax credit for certain employees in the United States. Eligible employees could choose whether to claim the whole credit on their tax return (Form 1040) ,or receive part of the credit in advance through their pay during the year and claim the remainder of the credit on their tax return (Form 1040). The employer may or may not have to make a tax deposit during the quarter. Therefore, do not assume that AEIC is a misplaced entry if there is no deposit(s). This largely applies to small dollar returns. If the Total Taxes minus the AEIC equals the Net Taxes do not move the AEIC entry.

  2. AEIC distribution through the employer was repealed by the Education Jobs and Medicaid Assistance Act beginning in Tax Period 201103 and subsequent.

  3. Process a Line 9 (Tax periods 201012 and Prior only) entry as follows:

    IF THEN
    The tax period for Form 941 began after December 31, 2010,
    1. Asterisk (*) to the left of the amount on Line 9.

    2. Asterisk (*) to the left of the amount on Line 10. Enter the correct amount from Line 8 to the left line 10.

    The Line 9 entry is negative or is other than for Advance Payment of Earned Income Credit ( EIC), (e.g., Net Tax entered on Line 9 rather than Line 10),
    1. Review the return to determine if there is an incorrect line entry,

    2. If so, place an asterisk (*) to the left of the amount and, if needed, edit the entry to the correct line,

    3. If the entry is correct, but should not have a negative sign, parenthesis or brackets , edit an asterisk to the left of the entry and edit the amount as a positive amount to the left of the asterisk.

    The Line 9 entry is equal to Line 8 and Line 10, and is clearly a misplaced entry, Place an asterisk (*) to the left of the Line 9 entry. Figure 3.11.13-31
    Line 9 shows the correct entry, but the amount is larger than the entry on Line 8, Total Taxes,
    1. Asterisk (*) to the left of the amount on Line 9. To the left edit the same amount appearing on Line 8, Total Taxes,

    2. Determine the difference between the amount on Line 8, Total Taxes and the taxpayer's entry on Line 9, AEIC,

    3. Add the calculated amount to the taxpayer's entry on Line 11, Total deposits for the quarter. Edit the new amount to Line 11. Figure 3.11.13-32

    Line 8 is larger than Line 10, and Line 9 is blank, Compute Line 9 by subtracting Line 10 from Line 8. Enter the total on Line 9.
    The Line 9 entry is negative and has been added to Line 8 (Line 10 is larger than Line 8), Compute Lines 12 or 13 which ever is applicable, by using the absolute value (Do not use the minus value) of Line 9 added to Line 11 and subtracted from Line 8.
    The return liability (Line 10 Revision 2005-2010) is $50,000 or more, and the Line 9 amount is equal to the Schedule B total, but greater than $2,500.00, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Figure 3.11.13-31

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Delete Line 9 When Equal to Line 8, Total Taxes After Adjustment

    Figure 3.11.13-32

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Line 9 Entry is Larger Than Line 8, Total Taxes After Adjustment

3.11.13.14.18  (01-01-2014)
Line 10, (Rev 2011 and Subsequent )-Total taxes after adjustments (Domestic only)

  1. Line 10, (Rev 2011 and subsequent), Total taxes after adjustment is the sum of Line 6 or (Line 6e, Revision 2011), Total Taxes Before Adjustments, Line 7, Current quarter's adjustment for fractions of cents, Line 8, Current quarter's adjustment of sick pay, and Line 9, Current quarter's adjustment of tips and group-term life insurance.

  2. Line 10 is a T-line (for year 2011 and subsequent). Thus, Line 10 must be entered if it is blank or contains a misplaced entry. Prior to year 2011, line 10 was not transcribed or captured.

    IF THEN
    Line 10 is blank Add Lines 6 (Rev 2013-2012) or Line 6e (Revision 2011), 7, 8, and 9. Edit the result on Line 10.
     
     
    Line 10 contains a zero, but there are entries on Lines 3, 5e, 5f, 6 and/or 6e,

    Exception:

    If entering Column(s) 1 or 2 for Line(s) 5a, 5b, 5c or 5d, do not compute line 10.

    Asterisk the zero and compute the correct amount. Edit the result on Line 10.  
    Line 10 contains an entry, Accept the taxpayer's entry. Use the taxpayer's entry, if needed, to verify or compute Line 13, 14, or 15.  

  3. Entries can be positive, negative or minus and must appear in dollars and cents.

  4. Verify a negative amount on line 10 ( Rev 2011 and subsequent) by following the directions on the form.

3.11.13.14.19  (01-01-2014)
Line 10, Total taxes after adjustment for advance EIC (Domestic Only, Revision 2010 and prior)

  1. Line 10, Total taxes after adjustment for advance EIC, should be the total of Line 8, Total taxes after adjustments, less Line 9, Advance earned income credit.

  2. Line 10 is not a T-line, however it may be necessary to compute this line.

    1. IF THEN
      Line 10 is blank (2005–2008 revision) Compute only if needed to verify or compute Line(s) 11, 12 or 13.
      Compute if needed to determine if SIC should be edited to the return.
      Line 10 contains an entry (2005-2008 revision) Accept the taxpayer's entry. Use the taxpayer's entry, if needed, to verify or compute Line 11, 12 or 13.
      IF THEN
      Line 10 is blank (2009 or 2010 revision), Compute only if needed to verify or compute Line(s) 11, 13, 14 or 15.
      Compute if needed to determine if SIC should be edited to the return.
      Line 10 contains an entry (2009 or 2010 revision), Accept the taxpayer's entry. Use the taxpayer's entry, if needed, to verify or compute Line 11, 13, 14, or 15.

3.11.13.14.20  (01-01-2014)
Line 11, Total Deposits for This Quarter, (Rev 2005 - 2008 and Rev 2014)
Line 12, Balance Due (Rev 2005 - 2008 and Rev 2014)
Line 13, Overpayment, (Rev 2005 - 2008 and Rev 2014)

  1. Process Lines 11 through 13 as follows:

    Note:

    All line references refer to SCRIPS Form 941, Rev 2005 through 2008 and Rev 2014. For SCRIPS Form 941, Revision 2009 through 2013 , see IRM 3.11.13.14.21

    IF AND THEN
    Line 11 is blank, the Taxpayer has indicated on an attachment total deposits for quarter Edit the amount to Line 11.
    Line 11 is equal to or less than Line 10, Line 12 is blank, Compute Line 12. Use the entries on Lines 10 and 11.
    Line 10 and 11 are the same, There is a different amount on Line 12, Adjust Line 11. See Figure 3.11.13-33.
    There is a different amount on Line 13, Verify the Line 10 entry from above, if correct, delete Line 13.
    Verify the Line 10 entry from above, Correct Line 10 as necessary and compute Line 13 using the NEW Line 10 amount and Line 11.
    Lines 11 and 12 are the same amount and the computation is incorrect.   Delete Line 11 as a misplaced entry. Figure 3.11.13-34
    Lines 11, 12 and 13 have the same amount, Line 10 is more than Line 11, Place an asterisk (*) to the left of Line 13.
    Line 10 is less than Line 11, Place an asterisk (*) to the left of Line 12.
    Lines 10 and 11 are the same amount as Line 12 or 13, Line 10 equals Line 15 (revision 2005 through 2008) or Line 14 (Revision 2014), "Total liability for the quarter" , Asterisk (*) to the left of the incorrect entry on Line 12 or 13, as appropriate.

    Figure 3.11.13-33

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Line 11 Equals Line 10 and Line 12 Has an Amount

    Figure 3.11.13-34

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Perfecting Line 11, Misplaced Entry

  2. Compare Line 10 and 11 (If Line 9 and 10 are blank, compare Lines 8 and 11). Enter the difference on Line 12 or 13, whichever is appropriate. See Figure 3.11.13-35.

    Figure 3.11.13-35

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Perfecting Lines 12 and 13 using Line 8 and Line 11 Information

    Note: All line references refer to SCRIPS Form 941, Rev 2005 through 2008 and Rev 2014.

    IF AND THEN
    Line 11 shows a negative (minus) amount,   Asterisk (*) the Line 11 amount and enter the Line 10 amount on Line 12.
    Line 12 or 13 shows a negative (minus) amount,  
    1. Verify the negative entry as a positive entry, by adding the entries leading to the amount. If the entry is correct edit the amount as a positive entry.

    2. If the entry can not be verified, use Line 10, if Line 10 is blank use Line 8 and Line 9. Also if Line 11 has an entry figure the difference, and enter on Line 12 or Line 13.

    There are entries on both Lines 12 and 13,   Asterisk (*) to the left of the incorrect entry. See Figure 3.11.13-36.
    The entry on Line 12 belongs on Line 13, The taxpayer indicates that he/she expects a refund by putting parenthesis around the amount on Line 12, or by checking the "Refund" box or "Applied to Next Return" box below Line 13, Asterisk (*) to the left of the Line 12 amount and enter that amount on Line 13. See Figure 3.11.13-37.

    Figure 3.11.13-36
    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Deleting Misplaced Entry

    Figure 3.11.13-37
    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Editing Line 12 and Line 13

3.11.13.14.21  (01-01-2014)
Line 11, Total Deposits for this Quarter, including overpayment applied from a prior quarter and overpayment applied from Form 941-X or Form 944-X
Line 12a, through Line 12e (Rev. 2009 and subsequent)

  1. COBRA gives employees who lose coverage under the employer's group health plan, due to a qualifying event, the right to elect to continue that coverage (under COBRA) for a period of time by paying premiums. COBRA covers multi-employer health plans and health plans maintained by private sector employers with 20 or more employees. It does not apply to churches or certain religious organizations.

  2. The premium assistance also applies to temporary continuation coverage elected under the Federal Employees Health Benefits Program and to continuation coverage under State programs that provide for coverage comparable to COBRA continuation coverage.

  3. A federal subsidy of 65 percent of the COBRA premium is available to assistance eligible individuals. The subsidy is available for up to fifteen months.

  4. The employer computes the COBRA amount and provides the number of eligible COBRA assistance payment individuals on Lines 12a and 12b These lines are available on Form 941 returns, Revision 2009 through 2013.

    1. Assistance eligible individuals who elect COBRA continuation coverage are treated as having paid the required COBRA premium if the individual elects COBRA and pays 35 percent of the COBRA premium.

    2. The 65 percent of the premium not paid by the assistance eligible individual is reimbursed to the employer maintaining the group health plan through a credit against payroll taxes.

    3. The employer reports the 65 percent premium assistance provided to assistance eligible individuals on their employment tax return once the 35 percent of the premium is paid by or on behalf of the assistance eligible individual.

    4. The credit is treated as a deposit made on the first day of the return period which reduces the employer's employment tax liabilities. Employers can apply the credit to offset their federal tax deposits, to generate a refund, or both.

  5. Hiring Incentives to Restore Employment (HIRE) -Lines 12c through 12e are used by the employer to compute the credit earned during the first quarter 2010. (For an explanation of the HIRE credit, see IRM 3.11.13.14.9.). The first quarter 2010 credit could only be claimed on 2nd quarter 2010 returns.

3.11.13.14.21.1  (01-01-2014)
Line 11, Total Deposits for this Quarter, including overpayment applied from a prior quarter and overpayment applied from Form 941-X or Form 944-X
Line 12a, COBRA Premium Assistance Payments (Revision 2009 through 2013),
Line 12b, Number of Recipients who Received COBRA Premium Assistance Payments and (Revision 2009 through 2013),
Line 13, Subtotal (Rev. 2009 through 2013))

  1. If there is an attachment to the Form 941, (including a SCRIPS Form 941), showing COBRA computation, and the taxpayer has not completed Line 12a and/or 12b, (Revision 2009 through 2013) review the attachment for the missing information.

    1. If the missing information is shown on the attachment, edit the information to the appropriate Line(s) 12a and/or 12b.

    2. If the missing information is not available, correspond for the missing information. Use Form 13195 with the applicable paragraph. Remember to edit the left margin of the return with the Letter 21C paragraphs.

  2. Process Line 11 through 13 as follows: Note: All line references refer to Form 941, Rev 2009 through 2013)

    IF AND THEN
    Line 11 is blank, zero, dash or "none" The taxpayer has attached a statement indicating total deposits Edit the amount to Line 11.
    Lines 11 and 12a are blank, The amounts on lines 13 and 14 are the same, Asterisk (*) the amount on line 13.
    The amounts on lines 13 and 14 are different, Edit the line 13 amount to line 11.
    An amount is shown on Line 12a that is equal to the amount on Line 10, Line 11 is blank, zero, dash or "none" ,
    1. Edit an asterisk to the left of Line 12a,

    2. Edit the amount from Line 12a to Line 11,

    3. Also edit the Line 12a amount to Line 13 if blank .

    Line 12a has an entry other than zero, dash or "none " , Line 12b is blank, zero, dash or "none" , Correspond for Line 12b See Figure 3.11.13-38.
    An entry is shown on Line 12b other than zero, dash or "none" , Line 12a is blank, zero, dash or "none" , Correspond for Line 12a.
    The entry on Line 12b is the same as the entry on Line 1, Line 12a is other than blank, zero, dash or "none" , Correspond for Line 12b.

    Note:

    If there is an indication on the return or attachment that "No Employees for the quarter" or "No wages paid this quarter " . Do not correspond for Line 12b. Accept the entry.

    Line 12a is blank, zero, dash or "none" , Edit an asterisk (*) to the left of the Line 12b entry.
    The entry on Line 12b is not in a numeric format,   Edit an asterisk (*) to the left of the entry and edit the numeric equivalent to the left of the asterisk.

    Exception:

    Notations of "zero" , "none" or "blank" do not need to be converted to a numeric equivalent.

    Line 11 and 13 are the same amount, Are the same amount as Line 10 and 14 or 15 , Consider Line 11, 13 and 15 as misplaced entries and edit an asterisk (*) to the left of the entries. See Figure 3.11.13-39.
    An amount is shown on line 13 , Lines 11, 12a, 14 and 15 are blank, Edit the line 13 amount to line 11 .
    Line 13 is blank, zero, dash, or "none" , There are entries on Line 11 and/or 12a Edit Line 13 using the entry from Line 11 and 12a (compute Line 13 by adding Line 11 and 12a ). See Figure 3.11.13-40.
    An amount is shown on Line 13 , There are entries on Line 11 and 12a
    1. Verify the amount on Line 13 by adding Line 11 and 12a.

    2. If the amount on Line 13 is incorrect, edit an asterisk (*) to the left of the amount and edit the correct amount to the left of the asterisk.

    See Figure 3.11.13-41.
    A negative amount is shown on Line 11 and 12a, Line 13 has a positive or negative amount,
    1. Verify the amount on Line 13 as a positive entry, by adding Line 11 and 12a as a positive amount.

    2. Line 13 is correct as a positive amount, edit Line 11, 12a and 13 as positive entries.

    3. Line 13 is not correct, correspond for an explanation of the entry on Line 13. Also, correspond for Line 12b if needed.

    Line 12c 12d and/or 12e has entries The tax period is not 201006 Asterisk the figures on Line 12c, 12d, and/or 12e .Otherwise accept the taxpayers figures.

    Figure 3.11.13-38

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Correspond for Line 12b when blank and an Entry is on Line 12a.

    Figure 3.11.13-39

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Perfecting Line 11 and 13 as Misplaced Entries

    Figure 3.11.13-40

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Compute and edit Line 13 when Blank and Entries are Shown on Lines 11, 12a and 12b.

    Figure 3.11.13-41

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Verify the Entry on Line 13, when there are entries shown on Line 11, 12a and 12b

3.11.13.14.21.2  (01-01-2014)
Line 14, Balance Due and Line 15, Overpayment (Rev. 2009 through 2013)

  1. Process Line 14 and 15 as follows: Note: All line references refer to Form 941, Rev 2009 through 2013

    IF AND THEN
    Line 14 and 15 are blank, zero, dash or "none" , Line 13 is blank, zero, dash or "none" , Edit the Line 10 amount to Line 14.
    Line 10 is more than the amount on Line 13, Subtract Line 13 from Line 10 and enter the amount on Line 14. See Figure 3.11.13-42.
    Line 13 is more than the amount on Line 10, Subtract Line 10 from Line 13 and enter the amount on Line 15.
    There are entries on both Line 14 and 15 Line 10 is more than the amount on Line 13, Edit an asterisk (*) to the left of the incorrect entry on Line 15.
    Line 13 is more than the amount on Line 10, Edit an asterisk (*) to the left of the incorrect entry on Line 14. See Figure 3.11.13-43.
    Line 10, 11, 13 and 14 are the same   Consider Line 11 and 13 as misplaced entries and edit and asterisk (*) to the left of the entries.  
    The entry on Line 14 belongs on Line 15 and the amount on Line 13 is more than the amount on Line 10, The taxpayer indicates a refund is due by placing parentheses around the amount on Line 14, or by checking the "Refund" box or "Apply to next return" box, Edit an asterisk (*) to the left of the amount on Line 14 and edit the amount to Line 15.
    A negative amount is shown on Line 14 and 15, and entries are shown on Line 10 and/or 13, If Line 13 is blank, zero, dash or "none" , Edit the Line 10 amount to Line 14.
    Line 10 is more than the amount on Line 13, Subtract Line 13 from Line 10 and enter the amount on Line 14.
    Line 13 is more than the amount on Line 10, Subtract Line 10 from Line 13 and enter the amount on Line 15.

    Figure 3.11.13-42

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Perfecting Line 14 when the entry on Line 10 is more than the Entry on Line 13

    Figure 3.11.13-43

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Deleting a Misplaced Entry on Line 14 (Line 13 is More than Line 10).

3.11.13.14.22  (01-01-2014)
Line 16, State Deposit Code (Rev. 2009 through 2011), or Line 14, (Rev. 2005- through 2008)

  1. The taxpayer enters a State Deposit code on the return to indicate that their deposits were made to a bank in a State, other than the State shown in the entity address on the front of the return. Thus, edit the State Deposit Code when the taxpayer has entered the full name of the State, or when the State abbreviation is other than one on the list. Exhibit 3.11.13-11

  2. However, beginning January 1, 2012 due to a change in the law, only holidays recognized by banks within the District of Columbia, will alter FTD computation for all filers. The change affects Form 941 returns for year 2012 and subsequent tax periods.

3.11.13.14.23  (01-01-2014)
Line 14 , Monthly Summary of Federal Tax Liability (Revision 2014), Line 16, Monthly Summary of Federal Tax Liability (Rev 2012 and 2013), Line 17, Monthly Summary of Federal Tax Liability (Rev. 2009 through 2011 ) and Line 15, Monthly Summary of Federal Tax Liability, (Rev 2005 through 2008) or Schedule B (ROFTL) - Schedule Indicator Code (SIC)

  1. Monthly schedule depositors complete Line 14 (Revision 2014), Line 16 (Revision 2012 and 2013) (Line 17, Rev 2009 through 2011, or Line 15 Rev. 2005 through 2008), Monthly Summary of Federal Tax Liability, to show their monthly tax liability. Semi-weekly schedule depositors complete Schedule B, Report of Tax Liability for Semiweekly Schedule Depositors, to show their weekly and monthly tax liability. The Record of Federal Tax Liability (ROFTL) is comprised of one or both of the above.

  2. The Schedule Indicator Code (SIC) is used by Code and Edit to remove the requirement for data entry to capture the ROFTL information when it is determined the ROFTL is unnecessary incomplete or outside of the tolerance

  3. Edit the applicable SIC on the Form 941, 941-PR or 941-SS (Rev 2005 and subsequent) right margin, at the end of "Part 1: Answer these questions for this quarter" line. SIC 1 or 3 are valid as follows:

    Reminder:

    The "Conditions" are for tax periods beginning 01-01-2005 and subsequent. (The line number references relate to the Form 941, 941-PR or 941-SS revision indicated.)

    SIC CODE CONDITIONS
    1 Edit SIC 1 When:
    1. Line 10 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. The return shows all zeros or is non-taxable.

    3. A negative or minus (-) amount appears in the ROFTL (Form 941, Line 14 (Rev 2014), Line 16, Rev 2012 and 2013, Line 17 Rev 2009 through 2011, or Line 15 Rev 2005 through 2008 and/or Schedule B).

    4. Taxpayer completes only the "Total Liability for Quarter, " and does not complete "Month 1" and "Month 2" and "Month 3" boxes.

    5. Taxpayer completes only Total Liability for Quarter on Schedule B. (Rest of Schedule B is blank)

    6. Return prepared under IRC 6020(b).

    Note:

    Only edit SIC 1, if both Form 941, Line 14 (Revision 2014), Line 16, (Rev 2012 and 2013 , Line 17, Rev 2009 through 2011, or Line 15, Rev 2005 through 2008) and/or Schedule B are NOT to be transcribed.

    3 " Church FICA Issue" or "Church Social Security Issue" notated. For procedures on processing returns indicating "Church FICA Issue" or "Church Social Security Issue" See IRM 3.11.13.14.5.

  4. In determining if a SIC code should be edited:

    Schedule Indicator Code (SIC) 1 Editing
    IF THEN
    For Rev 2010 and prior: Line 9 and Line 10 is blank , Use the Line 8 amount
    For Rev 2010 and prior: Line 9 has an amount, Compute the amount for Line 10
    For Rev 2011 and subsequent: Line 10 is blank, Compute Line 10. If Lines 7, 8, and 9 are blank, bring the Line 6e or (Line 6, Revision 2012 and 2013) amount to Line 10.

3.11.13.14.24  (01-01-2014)
Perfecting Line 14 (Rev 2014), Line 16 (Rev. 2012 and 2013), Line 17 (Rev 2009-2011), Line 15 , (Rev 2005- through 2008 ) and Schedule B (ROFTL)

  1. Edit a SIC Code on a return using the criteria and procedures above. If more than one code should be entered, enter the code in the priority order: 1, 3.

  2. If no SIC will be edited, edit the money fields.

    1. All transcription lines must be edited in dollars and cents.

    2. If there are no entries in the ROFTL liability fields, review the return and attachments. If the ROFTL liability entry (or entries) are available, edit the ROFTL and/or Schedule B with the correct entry (or entries) and do not edit a SIC 1.

  3. If there are multiple deposit amounts on the same line, then asterisk the entry. Add the amounts and enter the resulting amount to the left of the asterisk.

    Note:

    Do not follow this procedure if you are editing SIC 1.

  4. If the taxpayer completes more than one Schedule B, combine the Daily Tax Liabilities from each Schedule B to one Schedule B and line through (/) the Schedules B that are not to be entered.

  5. If Schedule B shows daily entries for any month, and the total of those entries appears in the "Total Liability for the Quarter" box in Part 2, Revision 2005 and subsequent, rather than in the applicable box (e.g., located in the lower right-hand corner on the Schedule B), then:

    1. Edit the amount in the "Total Liability for the Quarter" box ( in Part 2 of the return) to the monthly total box on Schedule B.

    2. Line through the amount in the "Total Liability for the Quarter" box. Also, enter an asterisk (*) to the left of the taxpayer's money entry.

    3. Verify the total for the quarter.

  6. If the taxpayer inadvertently places an entry on Schedule B in an incorrect last day of the month, (e.g., the 29th of February, except in a leap year, or the 31st day of April, June, September or November), asterisk the entry and enter the amount to the last valid day for that month. If an entry already exists in that field, add the amounts together.

3.11.13.14.25  (01-01-2014)
Line 15 (Rev 2014), Line 16 (Rev 2014), Line 17 (Rev 2012 and 2013), Line 18 (Rev. 2009 through 2011) and Line 16 (Rev. 2005 - 2008 ), "Final Return" check box, and "Final date you paid wages" , Line 18 (Rev 2012 and 2013), Line 19 (Rev. 2009 through 2011) and Line 17 (Rev. 2008 & Prior), Seasonal Employer check box

  1. If the taxpayer has checked the "If your business has closed and you stopped paying wages" box, edit a CCC "F" .

  2. If the taxpayer indicates in another location on the return, or in an attachment, that the return being filed is their final return with a notation such as (but not limited to) Final, Out of Business, No Longer Have Employees, Deceased, Liquidation, Dissolved, etc. then the "Final Return" box on Line 15 (Rev 2014) or Line 17 (Rev 2012 and 2013, Line 18 Rev 2009 through 2011, or Line 16 Rev. 2008 & Prior) should be checked and a date when final wages were paid should have been provided.

    Note:

    Do not edit CCC "F" , if the date of Final Wages is after the last day of the return's tax period.

  3. If the taxpayer did not check the box, the Code and Edit examiner should check the box and edit a CCC "F" in the designated location.

  4. If the taxpayer did not provide a date when final wages were paid, and the return shows tax data, correspond for the Date of Final Wages and DO NOT edit CCC "F" . Otherwise, if the return shows no tax data, edit CCC "F" and DO NOT correspond for the Date of Final Wages unless you are corresponding for a missing signature.

  5. If the Seasonal Employer box is checked, edit CCC "T" in the designated location on the return.

  6. If the taxpayer has checked the "Seasonal Employer" box and is indicating the return being filed is their final return, by either checking the "Final Return" box or a notation on the return or on an attachment, Edit CCC "T" to the return and only edit CCC "F" if the date of final wages is given and the date of the final wages is before the last day of the tax period.

    Note:

    If CCC "F" is being edited to the return Do Not edit CCC "T" .

  7. If the taxpayer indicates they are a seasonal employer in another location on the return or in an attachment, edit CCC "T" in the designated location and check the box on Line 16 (Rev 2014) or Line 18 (Rev 2012 and 2013, Line 19, Rev 2009 through 2011, or Line 17 Rev. 2008 & Prior), if not already checked.

3.11.13.15  (01-01-2014)
Conversion Procedures for Form 941, (Revisions 08 and Prior),

  1. This section provides guidelines to convert and process Form 941 returns through ISRP.

    • Form 941, Revision 2008 or prior with attachments (other than Schedule B or Schedule R), renumbered to February 2010 Revision (e.g., 201003).

    Note:

    Form 941 returns Rev 2010 and subsequent do not require renumbering for ISRP unless is a current return filed in a prior year return. If you receive a current return filed in a prior year revision the return must be converted to the Form 941 Revision 2014. Forms 941 returns for Tax Period 200903 to 201003 and Tax Period 201006 to 201012 do not require renumbering for ISRP.

  2. When the Form 941, Form 941-PR, or Form 941-SS claims COBRA, e.g., indicates an amount on the applicable return line (Revision 2005 through 2008), or indicates on an attachment to the return of a COBRA entry, the Form 941 can be processed using the lines on the February 2010 revision (Tax Period 201003).

    Note:

    For revisions 2005 through 2008, renumber the return lines to match the Revision February 2010 Revision (Tax period 201003).

  3. If SIC 1 is edited to the return, it is not necessary to renumber the ROFTL.

  4. Always edit the tax period in YYMM format:

    • Form 941 (Revision 2004 and prior) - edit above the OMB box.

    • Form 941 (Revision 2005 through 2008)- edit above the "Report for the quarter of ..." box.

  5. Correspond for the signature if not present, and edit Action Code 225.

    Note:

    For signature procedures, see IRM 3.11.13.11.7.

3.11.13.15.1  (01-01-2014)
Form 941, Employer's Quarterly Federal Tax Return, Form 941-PR, Planilla Para La Declaracion Federal Trimestral Del Patrono and Form 941-SS, Employer's Quarterly Federal Tax Return (Rev. 2004 and prior) Return - Conversion Format and Line Editing

  1. The 2004 revision (and prior) of Form 941 received in Document Perfection should be processed as follows:

    1. All 2004 and prior returns must be edited using the 2010 Form 941 revision, unless the taxpayer claims HIRE credit. If HIRE credit is being claimed by the taxpayer, the examiner should edit the Form 941 using the October 2010 revision. See Exhibit 3.11.13-4, for Revision 2004 and prior Road Map.

    2. If Form 941 Revision 2004 is received with an amount on Line 4, Line 9 or Line 12 (for tax periods after 12/31/2010), then asterisk the amount. This will allow the return to fall out in ERS for corrections to be made.

  2. If a period prior to 200903 return is received with COBRA information, asterisk the amount to disallow and prevent the entries from being processed.

3.11.13.16  (01-01-2014)
Form 94X - Adjusted Employment Tax Return and Claim for Refund

  1. Employment Tax Return Filers are required to file a Form 94X, Adjusted Return or Claim for Refund, to correct prior filings of their Employment Tax Returns.

  2. The 94X Forms are designed to be filed as a stand-alone return and should not be filed with an Employment Return. The 94X returns will be processed by Accounts Management (AM). A 94X return has been designed to correct each Employment Tax Return:

    Employment Tax Returns 94X - Adjusted Employment Tax Return and Claim for Refund
    941 & 941-SS 941-X: Adjusted Employer's QUARTERLY Federal Tax Return or Claim for Refund
    941PR 941-X (PR): Ajuste a la Declaración Federal TRIMESTRAL del Patrono o Reclamación de Reembolso
    943 943-X: Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund
    943PR 943-X (PR): Ajuste a la Declaración Federal Anual del Patrono de Empleados Agricolas o Reclamación de Reembolso
    944 944-X: Adjusted Employer's ANNUAL Federal Tax Return or Claim for Refund
    944(SP) 944-X (SP): Ajuste a la Declaracion Federal ANUAL del Empleador o Reclamacion de Reembolso
    945 945-X: Adjusted Annual Return of Withheld Federal Income Tax or Claim for Refund
    CT-1 CT-1X: Adjusted Employer's Annual Railroad Retirement Tax Return or Claim for Refund

  3. An Employment Tax Return (Rev 2009 and subsequent) with Forms 94X attached, process as follows (sight verify the Employment Return only):

    IF THEN
    The Employment Tax Return does not reflect an amount shown on the 94X/CT-1X return or it can not be determined if an adjustment is being taken on the Employment Tax Return,
    1. Detach the 94X/CT-1X return ,

    2. Photocopy page 1 of the Employment Tax Return and attach to the back of the Form 94X return

    3. Edit Action Trail on the Employment Tax Return, "94X to AM" , "CT-1X to AM" , or

    4. Attach to Form 94X/CT-1X - Form 3465, in remarks field edit "ADJ NOT PROCESSED"

    5. Continue processing the return.

    The taxpayer indicates on the 94X/CT-1X return an adjustment amount has been taken on the Employment Tax Return or there is an indication on the Employment Tax Return of an adjustment that is not allowable, Review the 94X/CT-1X return to determine if the adjustment is allowed on the Employment Tax Return by reviewing the explanation .
    Adjustment Allowable on the Employment Tax Return

    Note:

    "Allowable" refers to Fractions of Cents, Sick Pay, and Adjustments for Tips and Group-term Life Insurance.


    If the adjustment is allowable on the Employment Tax Return line through (/) the 94X/CT-1X return to indicate adjustment taken on the Employment Tax Return, leave the 94X attached as an attachment and continue to process the return.
    Adjustment NOT Allowable on the Employment Tax Return

    Note:

    Adjustment NOT allowable on the Employment Tax Return are errors discovered on or after January 1, 2010 that require justification and the Tax Period in which the adjustment is being made is 2009 and subsequent.

    1. Edit an asterisk (*) to the left of the adjustment line,

    2. Edit the Employment Tax Return with Action Trail "94X to AM" , or "CT-1X to AM" .,

      Note:

      By placing an asterisk next to the adjustment amount will cause the return to fall out to ERS. The Action Trail will indicate to the ERS Tax Examiner the correct Taxpayer Notice Code (TPNC) to use to generate the notice advising the taxpayer the adjustment will be processed by Accounts Management.

    3. Edit CCC "X" ,

      Note:

      This will stop any refund from going out while the adjustment is being processed.

    4. Photocopy Page 1 of the Employment Tax Return, attach to the back of Form 94X/CT-1X and attach Form 3465, in remarks field edit "ADJ NOT PROCESSED" ,

    5. Continue processing the return.

  4. Process as follows (sight verify the Employment Tax Return only) when:

    1. An Employment Tax Return 2008 and prior revision received with an 941X return attached.

      Note:

      If an Employment Tax Return, (e.g., meeting one of the conditions above, a or b) is received with a 941X, Adjusted Employment Tax Return and the period of the 941 return is the same period as the Employment Tax Return, route to Accounts Management as an Amended Return.

      See Figure 3.11.13-44

      Figure 3.11.13-44

      This image is too large to be displayed in the current screen. Please click the link to view the image.

      Route as an Amended Return when Form 941X is the same period as the 941 Return.

    Note:

    Renumber "Total Adjustments" line as necessary. Do not recalculate the Total Adjustment Amount.

    IF AND THEN
    The Employment Tax Return does not reflect an amount shown on the 94X/CT-1X return  
    1. Detach the 94X/CT-1X return

    2. Photocopy page 1 of the Employment Tax Return and attach to the back of the 94X return ,

    3. Edit Action Trail on the Employment Tax Return , "94X to AM" , "CT-1X to AM" ,,

    4. Attach to Form 94X/CT-1X - Form 3465, in remarks field edit "ADJ NOT PROCESSED" ,

    5. Continue processing the return.

    An amount is shown on an adjustment line(s) of the Employment Tax Return that require justification and a 94X/CT-1X return is attached,  
    1. Asterisk (*) to the left of the adjustment line,

    2. Edit the Employment Tax Return with an Action Trail "94X to AM"

      Note:

      This will cause the return to fall out to ERS; the Action Trail will indicate to the ERS Tax Examiner (TE) the correct Taxpayer Notice Code (TPNC) to use when generating the notice to the taxpayer that the adjustment will be processed by Accounts Management (AM).

    3. Edit CCC "X" ,

      Note:

      This will stop any refund from going out while the adjustment is being processed.

    4. Photocopy Page 1 of the Employment Tax Return, attach to the back of the 94X/CT-1X return and attach Form 3465, in remarks field edit "ADJ NOT PROCESSED" ,

    5. Continue processing the return.

    An Amount is shown on the adjustment line(s) of the Employment Tax Return that require justification and a 941X return is NOT attached, Increase Amount
    1. Asterisk (*) to the left of the adjustment amount,

    2. Edit the Employment Tax Return with an Action Trail "ADJ TO AM" ,

      Note:

      This will cause the return to fall out to ERS; the Action Trail will indicate to the ERS Tax Examiner (TE) the correct Taxpayer Notice Code (TPNC) to use when generating the notice to the taxpayer that the adjustment will be process by Accounts Management (AM).

    3. Edit CCC "X" ,

    4. Photocopy the Employment Tax Return and attach Form 3465, in remarks field edit "ADJ NOT PROCESSED" . See Figure 3.11.13-45.


    5. Continue processing the return.

    Decrease Amount
    1. Asterisk (*) to the left of the adjustment amount,

    2. Edit the Employment Tax Return with an Action Trail "CP 102 94X" ,

      Note:

      This will cause the return to fall out to ERS; the Action Trail will indicate to the ERS Tax Examiner (TE) the correct Taxpayer Notice Code (TPNC) to use when generating the notice to the taxpayer that an "X" Adjusted Return is needed to process the adjustment.

    3. Continue processing the return.

    Figure 3.11.13-45

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Form 941, 2008 Revision Filed for a 2009 Period with an Entry on an Adjustment Line, Edited to Remove Adjustment from Return

  5. A Non-Taxable 941 return received with "Misclassified Employee" written in the top margin and/or Form 941-X attached, See IRM 3.11.13.10.3

3.11.13.17  (01-01-2014)
Employment Tax Return Legislation and Regulations

  1. PL 89-97, Social Security Amendments of 1965 - Added IRC 3121(a)(12) which provides that cash tips are now considered wages and are taxable at the regular Social Security and Medicare rate.

  2. PL 99-509, Omnibus Budget Reconciliation Act of 1986 - Provided that state/local government employers under Section 218 agreements must report the wages of covered employees and pay their applicable Social Security and Medicare taxes to the IRS. These wages will be shown in column 1 of Line 5 of Form 941. Employers who are not under a Section 218 agreement should file Forms 941. If an employer applies to the Social Security Administration (SSA) for retroactive coverage under Section 218 of the Social Security Act, the three most recent retroactive years may be processed using Forms 941-X .

  3. Public Law (PL) 92-603 - allows religious orders whose members are required to take a vow of poverty to file an election to have their members pay Social Security/Medicare tax. These elections are made on Form SS -16, Certificate of Election of Coverage Under the Federal Insurance Contributions Act. A maximum of 20 retroactive quarters may be reported. When a Form 941 is received with a SS-16 attached, route the Form 941 return with the Form SS-16 to Accounts Management.

  4. PL 100-203, The Revenue Act of 1987 - Made the following changes:

    • Services performed by a spouse are taxable for Social Security and Medicare purposes.

    • Services performed by a son/daughter (18 or older), are taxable for Social Security and Medicare purposes.

  5. Section 1706(a) of the Tax Reform Act of 1986 - Added to Section 530 of the Revenue Act of 1978, a subsection (d) which provides that Section 530 does not apply is not available in the case of a worker who pursuant to an arrangement between the business and the client provides services for the client as an engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work.

  6. IRC Section 127, Educational Assistance Programs - Excludes up to $5,250 worth of employer provided educational assistance benefits from an employee's gross income. under The Economic Growth and Tax Relief Reconciliation P.L.107-16 Act of 2001, the exclusion became permanent. The legislation also permits graduate education for courses beginning after December 31, 2001. With Form 941C and the Form 941 adjustment line no longer available, an IRC 127 adjustment may only be found on a filed Form 941–X .

  7. IRC Section 3127, Exemption for Employer's and Their Employees Where Both are Members of Religious Faiths Opposed to Participation in Social Security Act Programs - Contains a provision which allows an employer of a recognized religious sect or division, which adheres to established tenets or teachings, to elect to be exempt from Social Security and/or /Medicare tax, but not from income tax.

    1. Taxpayers must submit a Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits, with the Social Security Administration to request an exemption from Social Security and Medicare taxes. If a Form 4029 is attached to Forms 941 or 943, detach the Form 4029 and forward it to:
      Social Security Administration
      Division of Earnings Adjustments
      Attention: Form 4029 Process
      Metro West, North Building
      Baltimore, MD 21201

  8. IRC Section 3509, or "Employee Reclassification " - Provides that IRC Section 3509 rates may apply to determine the employer's tax liability for the employee's share of income tax withholding and FICA Tax if the employer has mistakenly treated a worker as not being an employee (for example, treats the worker as an independent contractor). The rate used depends upon whether a Form 1099 is filed, as required. (Generally, the tax assessment under IRC Section 3509 is made by the Service, but the employer may self-assess if he/she discovers the worker was misclassified). The employer pays his/her share of Social Security/Medicare tax and either 20 or 40 percent of the employee's share. The income tax withholding will be 1.5 or 3 percent of the wages. Section 3509 does not apply in cases of intentional disregard.

    1. Since Social Security/Medicare tax will not be assessed at the regular tax rate, the taxpayer must prepare a Form 941-X . The explanation area of the Form 941-X will indicate "Section 3509 Applicable" or "Employee Reclassification" . The IRC Section 3509 worksheet instructs the taxpayer to include the adjustment amount on Form 941.

    2. The income tax will also be withheld at an abnormal rate. The IRC Section 3509 worksheet instructs the taxpayer to include the adjustment amount on Form 941.

    3. A statement should be attached to the return to show how the tax was computed. DO NOT question or change the Medicare/Social Security/Income Tax computed as long as it is mathematically correct.

  9. On final regulations published as T.D. 8229, IRC Section 31.6011(a)-10 allows the Service to waive the filing of no liability returns. The employer now has the opportunity to indicate for the first time that he/she will file a return only when the business is active. These taxpayers are considered as "Seasonal filers" . See IRM 3.11.13.11.2, Computer Condition Codes, for more details.

  10. Affordable Care Act- For tax years beginning after December 31, 2012, a 0.9 percent Additional Medicare Tax applies to a taxpayer’s combined Medicare wages and self-employment income, and/or Railroad Retirement Tax Act ("RRTA") compensation which are in excess of a threshold amount based on filing status. The statute requires that employers withhold the 0.9% Additional Medicare Tax from wages paid to an employee in excess of $200,000 in a calendar year. The employer must begin withholding Additional Medicare Tax in the pay period in which it pays wages in excess of $200,000 and continue withholding 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. In satisfying its obligation to withhold Additional Medicare Tax, the employer may disregard the amount of wages received by the employee’s spouse. To the extent Additional Medicare Tax is not withheld by the employer, the employee must pay the tax. If an employer fails to withhold Additional Medicare Tax, and the tax is subsequently paid by the employee, the IRS will not collect the tax from the employer.

  11. REG-130074-11 (proposed regulations issued in 2012), Rules Relating to Additional Medicare Tax - Provided that employer adjustments of underpayments of Additional Medicare Tax may be made only if the error is ascertained in the same year the wages or compensation was paid, unless: (1) the underpayment is attributable to an administrative error, (2) section 3509 applies to determine the amount of the underpayment, or (3) the adjustment is the result of an IRS examination. Similarly, an adjustment of overpaid Additional Medicare Tax may only be made if the employer ascertains the error in the year the wages or railroad retirement (RRTA) compensation was paid and repays or reimburses the employee the amount of the over collection prior to the end of the calendar year. The requirement to repay or reimburse does not apply to the extent that, after reasonable efforts, the employer cannot locate the employee. However, if an employer has not repaid or reimbursed the amount of the over collection to the employee, an adjustment cannot be made. Employers may claim refunds of overpaid Additional Medicare Tax only if the employer did not deduct or withhold the overpaid Additional Medicare Tax from the employee’s wages or railroad retirement (RRTA) compensation.

3.11.13.18  (01-01-2014)
Substitute Form 941 Filed by Federal Agencies For Employers

  1. Federal agencies making wage determinations withhold income taxes and the employee's share of FICA taxes from payments made to employees. The federal agency reports and pays the employee share of FICA with an employment tax return filed with the IRS. The agencies allowed to take this action are:

    • National Labor Relations Board (NLRB) - Labor Management Relations Act

    • Department of Labor (DOL) - Fair Labor Standards Act

    • General Accounting Office (GAO) or Housing and Urban Development (HUD) - Davis-Bacon Act

  2. The agency prepares a Form 941 for each quarter showing the total wages reported on lines 2, 5a, and 5c of Form 941 and the full amount of tax is computed. The employer's share of FICA is then deducted on line 7c of the Form 941. If wages are not collected, "no liability" returns are to be filed.

    1. A consolidated Form 941-X should be attached to the federal agency's Form 941. The consolidated Form 941-X will reflect the aggregate wages and tax withheld for all employees for which wage determinations were made by the federal agency for that tax period.

    2. In the explanation area, the agency indicates the name of the agency and the Act which authorizes them to collect and pay back wages.

    3. The Form 941-X is stamped "Do Not Transmit to SSA".

  3. Process the Form 941 using the procedures in this IRM. These returns do not require special processing.

    1. If the return indicates a final return, input CCC "F" .

    2. No signature is required for these returns.

    3. Do not separate the Form 941-X from the Form 941.

3.11.13.19  (01-01-2014)
Form 943, Annual Tax Return for Agricultural Employees and Form 943-PR, Planilla para la Declaración Anual de la Contribución Federal del Patrono de Empleados Agrícolas - General

  1. Form 943 is an annual return filed by employers to report Social Security and Medicare tax and Income Tax Withheld from agricultural employees. Form 943-PR is an annual return filed by employers to report Social Security and Medicare tax for agricultural employees whose principal place of business is in Puerto Rico. The tax applies to:

    1. Any employee earning cash wages of $150.00 or more for farm work,

    2. Any employee earning (cash or non-cash) wages paid of $2,500.00 or more.

  2. For tax year 2013 we have a new line 6, "Total Wages Subject to Additional Medicare Tax Withholding" . Employers are required to begin withholding Additional Medicare tax in the pay period in which they 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. Section 3101(b)(2), as added by P.L. 111-148, sections 9015 & 10906, and further amended by section 1402 (b) of P.L. 111-152.

  3. Also, we have line 7 "Additional Medicare Tax Withholding " , (new line) multiply by the total wages reported on line 6 by 0.9%(.009) Section 3101(b)(2), as added by P.L. 111-148, sections 9015 & 10906, and further amended by section 1402 (b) of P.L. 111-152.

  4. Domestic and Foreign consideration of Form 943

    IF THEN
    An employer has a principal address in any of the 50 U.S. States, or the District of Columbia Taxpayer should file Form 943. The taxpayer should mail the return (according to the Form 943 instructions) to:
    Cincinnati Submission Processing Center (CSPC), or
    Ogden Submission Processing Center (OSPC)
    An employer with a foreign (International ) address, or the address is not one of the 50 U.S. states, the District of Columbia, or Puerto Rico Taxpayer should file Form 943. The taxpayer should mail the return (according to the Form 943 instructions) to Ogden Submission Processing Center (OSPC).
    An employer has a principal place of business in Puerto Rico Taxpayer should file Form 943-PR. The taxpayer should mail the return (according to the Form 943-PR instructions) to Ogden Submission Processing Center (OSPC).

  5. Foreign Return Processing:

    1. All Forms 943 with a foreign address or an address of an U.S. possession and 943-PR should be processed at the Ogden Submission Processing Campus (OSPC). If these returns are received in any other Submission Processing Campus, they must be transshipped to OSPC. Army Post Office (APO), Fleet Post Office (FPO) and Diplomatic Post Office (DPO) are not considered foreign addresses.
      • If the return is unnumbered, withdraw it from the batch and prepare Form 13195 requesting the Letter 86C be sent to the taxpayer. Attach a Form 4227 for routing to OSPC.
      • If the return is numbered, use AC 650.

    2. Form 943-PR, is similar to Form 943. However, they contain Social Security and Medicare tax only. Therefore, the line numbers must be the same as the domestic returns. If they are not, alter the numbers to make them compatible with the transcription lines for that year.

    3. Withheld Income Tax should not be reported on Form 943 with a foreign address or an address of an U.S. possession. However, certain filers are subject to the withholding tax because they employ U.S. citizens. If such taxpayers include the withholding tax and/or withholding tax adjustments on the returns (such as showing the amounts in the shaded areas):

      Note:

      The following procedures will change the Filing Requirement from a Form 943-PR to a Form 943 filer. Care should be taken before entering this change

      :
      • Code a numbered return with AC 620 for Reject processing.
      • Prepare a substitute return for the erroneous foreign return if the return is unnumbered.
      • Prepare and release promptly a Form 2363, (Master File Entity Change), to change the BMF filing requirement code from "6" or "7" to "1" .

    4. Otherwise, the instructions provided for Form 943 returns filed with foreign or American possession addresses) should be followed to the extent possible to process these returns. Specific procedures for these returns are:
      • An address change may be made on the returns if it will not change the Filing Requirement Code from "6" to "7" or "1" , or from "7" to "1" or "6" . Otherwise, a Form 2363 must be prepared showing TC 013.
      • See IRM 3.11.13.12.1 for instructions to follow regarding the Name Control and see the Name Control Job Aide, Document 7071A for determining a Name Control.

    5. Do not send these returns back for missing signature, initiate letter 21C.

  6. If a revision year 2009 or prior is received for tax year 2010 and prior, renumber the lines as the 2010 revision. If the taxpayer has an amount on Line 10 of the form (Rev 2010 or prior) , Advance Earned Income Credit, edit an asterisk (*) to the left of the amount. Advance Earned Income Credit can no longer be claimed on Form 943 beginning with tax year 2011 and subsequent.

    1. If a revision year 2011 or 2012 , is received for tax year 2013, renumber the lines on the form to the 2013 revision.

  7. Computer Condition Codes (CCC) should be edited in the bottom center margin of the return, if required. See IRM 3.11.13.11.2 for Computer Condition Code (CCC) Procedures.

  8. Finalizing Form 943: A "final" wage date is not required on Form 943. Enter CCC "F" if the taxpayer gives any positive indication that he/she is filing a final return. See IRM 3.11.13.10.3, Non-Taxable Returns With No Line Entries.

    Reminder:

    Remember to visually check the final return box for an entry which is located on the left hand side of the return below the entity box on the first page. Enter an "F" in the bottom margin if the box is checked.

  9. Edit all entries in DOLLARS AND CENTS unless otherwise directed.

  10. There are no provisions for processing an early filed return, e.g., tax year (TY) 2012 filed before the end of the calendar year (CY). It must be held until the first cycles of the next year. Edit Action Code 480, and continue to process the return.

  11. A payment voucher is attached to the bottom portion of the Form 943. These vouchers should be detached by the contractor Lockbox operation (or the Deposit function, if received in the Campus) for proper processing of any remittance. Blank vouchers attached to the form may be detached and disposed. However, vouchers with data present should be left attached to the form.

3.11.13.19.1  (01-01-2014)
Examining Form 943 Return Data

  1. If any entry on a transcription line is not legible, place an asterisk (*) to the left of entry and enter the correct data.

  2. Exhibits 3.11.13-10 through 3.11.13-13 show all of the fields which are transcription fields for Form 943 and 943-PR for years 2011, 2012 and 2013.

    Line Item Description Form 943 (Rev 2010) Form 943 (Rev 2011-2012) Form 943 (Rev 2013)
    Number of agricultural employees Line 1 Line 1 Line 1
    Total wages subject to Social Security tax Line 2 Line 2 Line 2
    Social Security Tax
    • For years 2013, 2010 and prior (12.4%)

    • For year 2011 and 2012 (10.4%)

    Line 3 Line 3 Line 3
    Total wages subject to Medicare tax Line 4 Line 4 Line 4
    Medicare tax (2.9%) Line 5 Line 5 Line 5
    Total Wages Subject to Additional Medicare Tax Withholding     Line 6
    Additional Medicare Tax Withholding (.009)     Line 7
    Federal Income Tax Withheld Line 6 Line 6 Line 8
    Number of qualified employees paid wages after March 31, 2010 Line 7a    
    Exempt wages paid to qualified employees after March 31, 2010 Line 7b    
    Social Security Tax exemption (6.2%) Line 7c    
    Total taxes before adjustments Line 7d Line 7 Line 9
    Current year's adjustments Line 8 Line 8 Line 10
    Total taxes after adjustments Line 9 Line 9 Line 11
    Advance earned Income credit Line 10    
    Net Taxes Line 11    
    Total deposits Line 12 Line 10 Line 12
    COBRA premium assistance payments Line 13a Line 11a Line 13a
    Number of individuals provided COBRA premium assistance payments Line 13b Line 11b Line 13b
    Number of qualified employees paid exempt wages March 19 through 31. Line 13c    
    Exempt wages paid to qualified employees March 19 through 31 Line 13d    
    Social security tax exemption (6.2%) Line 13e    
    Add lines::
    • For year 2011 and subsequent, line 10 and 11a

    • For year 2010, lines 12, 13a, and 13c.

    Line 14 Line 12 Line 14
    Balance due Line 15 Line 13 Line 15
    Overpayment Line 16 Line 14 Line 16
    Monthly summary of Federal tax liability Line 17A through 17M Line 15A through 15M Line 17A through 17M
    Third Party Designee Below Line 17 Below line 15 Below line 17
    Signature Sign Here line Sign Here line Sign Here line
    Paid Preparer Use Bottom of form Bottom of form Bottom of form

3.11.13.19.2  (01-01-2014)
State Deposit Code

  1. The taxpayer enters a State Deposit code on the return to indicate that their deposits were made to a bank in a State, other than the State shown in the entity address on the front of the return. This State entry is used when computing a Federal Tax Deposit penalty to integrate State banking holidays into the computation.

  2. Beginning Tax Year 2012 (Rev 2012) the text regarding the use of the state code box and the state code box for where deposits are made has been removed. Only legal holidays in the District of Columbia can delay a deposit.

3.11.13.19.3  (01-01-2014)
Line 1, Number of Agricultural Employees

  1. Perfect the line for validity only. All alpha words must be written in numeric form, edit an asterisk (*) to the left of the alpha word and edit the numeric equivalent to the left of the asterisk. If the numeric equivalent can not be determined asterisk (*) to the left of the entry on Line 1.

    Exception:

    Notations of "zero" , "none" and "blank" do not need to be converted to a numeric equivalent.

3.11.13.19.4  (01-01-2014)
Line 2, Total Social Security Wages and Line 3, Tax on Social Security Wages

  1. Edit Line(s) 2 and 3 using the following procedures:

    IF THEN
    Line 2 is blank, zero, dash or "none" , and Line 3 has an entry,
    1. Take the amount on Line 3 and multiply it by the appropriate factor in the table in Exhibit 3.11.13-12 or divide the tax amount by the Social Security tax rate (.124 (Rev 2013), or for year 2012-2011 .104). Enter the result on Line 2. See Figure 3.11.13-46,

    2. The taxable wages (Line 2) may be determined from other information on the return or from attachments,

    3. Continue to process the return.

    Line 2 and Line 3 are blank, zero, dash or "none" and there is an amount on Line 4 (If Line 4 is also blank, zero, dash or" none" , see (2) below,
    1. Edit the amount of the Line 4 Medicare wages to Line 2,

    2. Continue to process the return.

    Note:

    If Line 3 is needed to compute another line (i.e. Line 7( Revision 2012-2011 or Line 9 (Rev 2013), then multiply the Line 2 amount by .124 (Rev 2013), or for year 20122011, .104, and enter the amount on Line 3.

    Figure 3.11.13-46

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Line 2 is Blank, Zero, or None and Line 3 Has an Entry

  2. If Line 2 cannot be perfected from the procedures in (1), then correspond with taxpayer using Paperless Correspondence Procedures in Exhibit 3.11.13-17 or Form 13195. Review the return or attachments for any of the following:

    IF AND THEN
    The taxpayer indicates they employ family members,   Correspond for Lines 2, 3, 4 or 5.
    The taxpayer believes wages to be exempt, The taxpayer does not provide a justifiable explanation why the wages are exempt, but the amount of the wages can be determined, Include the amount on Lines 2 and 4.
    Line(s) 2 and /or 4 have an entry, Lines 3 and 5 are blank, The taxpayer provides an explanation of exempt wages (e.g.,, religious order, employer's children under age 18), Reduce the amount of Line(s) 2 and/or 4 by the amount of the exempt wages.
    Lines 2, 3, 4 and 5 are blank, It can be determined that remittance was filed with the return, from the return or attachments,
    1. Do not factor back into the wage figure. Suspend the return with Action Code 211.

    2. Use Paperless Correspondence Procedures or Prepare a Form 13195 to correspond for the necessary line items. See Figure 3.11.13-47.

    Figure 3.11.13-47

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Lines 2 thru 5 are Blank, Correspond using Paperless Correspondence Procedures

3.11.13.19.5  (01-01-2014)
Line 4, Total Medicare Wages & Line 5, Tax on Medicare Wages

  1. Edit Line(s) 4 and 5 as follows:

    IF THEN
    Line 4 is blank, zero, dash or "none" , and there is an amount on Line 5,
    1. Divide the tax shown on Line 5 by the Medicare rate (2.9%) or multiply Line 5 tax by the appropriate factor,

    2. Enter the amount on Line 4.

    Lines 4 and 5 are blank, zero, dash or "none" , Do not factor back into the wage amount. Edit the Line 2 amount to Line 4.
    The amount on Line 5 is exactly 12 times the amount on Line 4,
    1. Edit the Line 5 amount to Line 4,

    2. Asterisk the Line 5 amount,

    3. Multiply the Line 4 amount by the Medicare rate (.029) and enter the amount to the left of the asterisk on Line 5.

3.11.13.19.6  (01-01-2014)
Line 6 (Rev 2013), Total Wages Subject to Additional Medicare Tax Withholding

  1. Process Line 6 as follows:

    IF Then
    Line 6 (Rev 2013) is blank, zero, dash or "none" , and Line 7 (Rev 2013) has an entry,
    1. Divide the tax shown on Line 7 (Rev 2013) by the Additional Medicare Tax Withholding (.009)

    2. Enter the amount on Line 6 (Rev 2013).

3.11.13.19.7  (01-01-2014)
Line 7 (Rev 2013), Additional Medicare Tax Withholding

  1. Process Line 7 as follows:

    IF Then
    Line 7 (Rev 2013) is blank, zero, dash or "none" (Rev 2013) Multiply the total wages reported on line 6 (Rev 2013) by 0.9% and enter the amount on line 7(Rev 2013)

3.11.13.19.8  (01-01-2014)
Line 8, Federal Income Tax Withheld (Rev 2013) , Line 6 (Rev 2012), Federal Income Tax Withheld (Domestic Only)

  1. Process Line 8 (Rev 2013) or Line 6 (Rev 2012 and prior) as follows:

    IF THEN
    Line 8 (Rev 2013) or Line 6 (Rev 2012 and prior) is blank, and it is apparent the amount has been entered on Line 9 (Rev 2013) or Line 7 (Rev 2012 and prior), Enter the amount on Line 8 (Rev 2013) or Line 6 (Rev 2012 and prior). See Figure 3.11.13-48.
    Line 8 (Rev 2013) or Line 6 (Rev 2012 and prior) is blank and Lines 3 and 5 do not equal Line 9 (Rev 2013) or Line 7 (Rev 2012 and prior), Subtract Lines 3 and 5 from Line 9 (Rev 2013) or Line 7 (Rev 2012 and prior) and put on Line 8 (Rev 2013) or Line 6 (Rev 2012 and prior). See Figure 3.11.13-49.

    Figure 3.11.13-48

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Line 8 is Blank and Line 9 Has a Misplaced Entry

    Figure 3.11.13-49

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Line 8 is Blank and the Sum of Line 3 + Line 5 is Not Equal to Line 9

3.11.13.19.9  (01-01-2014)
Line 7a - 7d, Hiring Incentives to Restore Employment (HIRE) Act

  1. For tax year 2010, qualified employers who hire unemployed workers (after February 3, 2010, and before January 1, 2011) may qualify for a 6.2 percent payroll tax incentive. In effect, the legislation exempted them from their share of Social Security taxes on wages paid to these workers from March 19, 2010, through December 31, 2010. This reduced rate will have no effect on the employee's future Social Security benefits, and employers are still required to withhold the employee's 6.2 percent share of Social Security as well as income taxes. The employer and employee's shares of Medicare taxes also still apply to any wages paid.

    Note:

    Taxable businesses and tax-exempt organizations qualify for the retention credit. Qualified employers in all five U.S. territories (i.e., American Samoa, Commonwealth of the Northern Mariana Islands, Puerto Rico, etc.) that are subject to social security tax also qualify for the retention credit. Federal, state and local government employers generally do not qualify for the retention credit. However, public colleges and universities can qualify. Indian tribal governments also qualify.

  2. Lines 7a - 7d were transcription lines. Accept taxpayers figures.

  3. However, for tax year 2011 and subsequent , lines 7a through 7c were eliminated from the Form 943 and 943-PR due to the legislation expiring. Line 7d for tax year 2010 was changed to line 7 for tax year 2011.

3.11.13.19.10  (01-01-2014)
Line 9, Total Taxes Before Adjustment, (Rev 2013), Line 7, Total Taxes Before Adjustments, Tax Period 201112 through 201212.

  1. The entry on line 9, (Rev 2013) or Line 7, Form 943 (Rev 2011-2012) should be the total amount of lines 3, 5 and 6, e.g., (lines 3+5+6= line 7 (Revision 2011-2012)) or the total amount of lines 3,5, 7and 8 (Revision 2013), e.g. ( lines 3+5+7+8=line 9 (Rev 2013). On Form 943-PR (Revision 2011-2012), the line 7 entry is the total of lines 3 and 5, e.g., (lines 3+5 = 7)

  2. The entry should be a positive amount.

3.11.13.19.11  (01-01-2014)
Line 10, Current Year's Adjustment (Rev 2013), Line 8, Current Year's Adjustments (Revision 2009 through 2012)

  1. The entry on Line 10 (Rev 2013) or Line 8 (Rev 2009 through 2012) can be positive, negative or a minus amount.

  2. An entry of Line 10 (Rev 2013) or Line 8 (Rev 2009 through 2012) does not require a support statement for substantiation.

    Note:

    . Form 941C can not longer be processed. If Form 941C is attached to a Form 941, Form 941-SS, Form 943, or Form 945, keep the package together and move the Form 941C to the front, staple and send it back to Accounts Management. If Form 943-X is attached, refer to IRM 3.11.13.16

3.11.13.19.12  (01-01-2014)
Line 8, Adjustment to Taxes (Revision 2008 and prior)

  1. Any Form 943 received for tax periods 2008 and prior with Form 941C attached can no longer be processed. If Form 941C is attached to a Form 941, Form 941-SS, Form 943, or Form 945, keep the package together and move the Form 941C to the front, staple and send it back to Accounts Management.

3.11.13.19.13  (01-01-2014)
Line 11, Total Taxes after Adjustment (Rev 2013), Line 9, Total Taxes after Adjustments (Rev 2009 through 2012)

  1. Process the entry on Line 11 (Rev 2013) or Line 9 (Revision 2009 through 2012) as follows:

    IF THEN
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Math verify the amount on line 11 (Rev 2013) or line 9 (Rev 2009- 2012) to ensure the total shown equals line 9 (Rev 2013) adjusted by line 10 or line 7 (Rev 2011-2012) , or line 7d for( Rev 2010) adjusted by line 8.
    Line 11 (Rev 2013) or line 9 (Rev 2012) is blank, "none" etc. or contains a misapplied entry,
    1. Line 9 (Rev 2013) adjusted by line 10 or line 7 (Rev 2011 - 2012, or line 7d for Rev 2010) adjusted (+ or -) by line 8, and enter the amount on line 11 (Rev 2013) or line 9 (Rev 2009-2012).

    2. For tax periods 201012 and prior- If line 10 is blank, enter the Line 11 amount on Line 9.

3.11.13.19.14  (01-01-2014)
Line 10, Advance Earned Income Credit (AEIC)- (Rev. 2010 and prior) (Domestic Only)

  1. The Advanced Earned Income Credit (AEIC) is a tax credit for certain workers in the United States. Eligible employees can choose whether to claim all of the credit on their tax return (Form 1040) or to receive part of the credit in advance with their pay during the year and claim the remainder of the credit on their tax return. The employer may or may not have to make a tax deposit during the quarter. Therefore, do not assume that AEIC is a misplaced entry if there is no deposit(s). This largely applies to small dollar returns. If the Total Taxes minus the AEIC equals the Net Taxes do not move the AEIC entry. See Figure 3.11.13-50.

    Figure 3.11.13-50
    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Entry for Advance Earned Income Credit No Deposit Shown

  2. However, under the Education Jobs and Medicaid Assistance Act, effective January 1, 2011, there is no longer distribution of advanced earned income credit (EIC) through the employer. Eligible employees can still claim earned income credit on their Form 1040 provided they meet certain EIC requirements.

  3. Process a Line 10 entry (Rev 2010 and prior) as follows:

    IF THEN
    The tax year of the Form 943 began after December 31, 2010, Place an asterisk (*) to the left of the amount. This will cause the return to fall out to ERS for correction.
    The Line 10 entry appears to be other than for Advance Payment of Earned Income Credit (EIC), (e.g., The total taxes are entered on the incorrect line, or Net Taxes entered on Line 11 rather than Line 12, etc.),
    1. Review the return to determine if there is an incorrect line entry,

    2. If so, asterisk (*) to the left of the amount and , if needed, edit the entry to the correct line,

    3. If the entry is correct, but should not have parenthesis or brackets, edit an asterisk to the left of the entry and edit to the left of the asterisk as a positive amount.

    Line 10 shows the correct entry, but the amount is larger than the entry on Line 9, Total Taxes,
    1. Asterisk (*) to the left of the amount on Line 10. To the left, edit the same amount appearing on Line 9, Total Taxes,

    2. Determine the difference between the amount on Line 9, Total Taxes and the taxpayer's entry on Line 10, AEIC,

    3. Add the calculated amount to the taxpayer's entry on Line 12, Total deposits for the quarter. Edit the new amount to the left of Line 12.

3.11.13.19.15  (01-01-2014)
Line 10, Total Deposits (Revision 2011-2012) , Line 11a, COBRA Assistance Payments (Revision 2011-2012), Line 11b, Number of COBRA Recipients— (Rev 2011-2012)
Line 12, Total Deposits (Revision 2013, 2010 and prior),Line 13a, COBRA Assistance Payments, and
Line 13b, Number of COBRA Recipients— (Rev. 2009, 2010 and 2013)

  1. COBRA gives employees who lose coverage under the employer's group health plan, due to a qualifying event, the right to elect to continue that coverage (under COBRA) for a period of time by paying premiums. COBRA covers multi-employer health plans and health plans maintained by private sector employers with 20 or more employees. It does not apply to churches or certain religious organizations.

  2. The American Recovery and Reinvestment Act of 2009 and subsequent legislation provides for premium assistance for individuals and their families (referred to as "assistance eligible individuals" ) who lose employer health coverage to continue under COBRA coverage. The premium assistance also applies to temporary continuation coverage elected under the Federal Employees Health Benefits Program and to continuation coverage under State programs that provide for coverage comparable to COBRA continuation coverage. However, certain conditions must be met:

    1. Any loss of employer health overage by the employee or their family must be due to involuntary termination of employment, or due to a qualifying event.

    2. The loss of employer health coverage must have taken place between September 1,2008 and May 31, 2010.

    3. The federal subsidy must not exceed 65% of the COBRA premium and the remaining 35% must be paid by the assistance eligible individual. The 65% of the premium not paid by the assistance eligible individual is reimbursed to the employer maintaining the group health plan through a credit against payroll taxes. The credit is treated as a deposit made on the first day of the return period which reduces the employer's employment tax liabilities. Employers can apply the credit to offset their federal tax deposits, to generate a refund, or both.

    4. The federal subsidy for the assistance eligible individual must not exceed 15 months from the initial date of COBRA coverage.

  3. Process Line 10 through 11b (Rev 2011 and 2012) or Line 12 through 13b (Rev 2009, 2010 or 2013) as follows:

    If ... And ... Then ...
    Line 10 (Rev 2011-2012 , or line 12, Rev 2009, 2010 and 2013) is blank Taxpayer indicates on attachment their total deposits Edit the amount to Line 10 (Rev 2011 - 2012, or line 12, Rev 2009, 2010 or 2013)
    Line 10 (Rev 2011 -2012 , or Line 12, Rev 2009, 2010 or 2013) shows an amount   Accept taxpayer's figures
    An amount is shown on Line 11a that is equal to the amount on Line 9 Line 10 is blank, zero, dash or "none"
    • Edit an asterisk to the left of Line 11a

    • Edit the amount from Line 11a to Line 10

    • Also edit the Line 11a amount to Line 12 if blank

    Line 11a (Rev 2011 -2012 , or Line 13a Rev 2009, 2010 or 2013) is blank Line 11b (Rev 2011-2012 , or Line 13b, (Rev 2009, 2010 or 2013) has an entry other than zero, dash or none Correspond for Line 11a (Rev 2011-2012 , or line 13a, Rev 2009, 2010 or 2013).
    Line 11b (Rev 2011 -2012 , or Line 13b Rev 2009, 2010 or 2013) is blank Line 11a (Rev 2011-2012 or Line 13a , Rev 2009, 2010 or 2013) has amount Correspond for Line 11b (Rev 2011- 2012, or Line 13b, Rev 2009, 2010 or 2013) See Figure 3.11.13-51
    Line 11b (Rev 2011-2012, or Line 13b, Rev 2009, 2010 or 2013) is the same number shown on Line 1 there is no entry on Line 11a (Rev 2011-2012, or Line 13a, Rev 2009, 2010 or 2013) Asterisk to the left of the amount shown on Line 11b (Rev 2011-2012, or Line 13b, Rev 2009, 2010 or 2013)

    Figure 3.11.13-51

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Correspond for Line 11b (Rev 2011-2012 or Line 13b, Rev 2009, 2010 or 2013) if it is blank and Line 11a (Rev 2011 or Line 13a, Rev 2009, 2010 or 2013) has amount.

3.11.13.19.16  (01-01-2014)
Line 12, Total Deposits through Line 14, Overpayment (Revision 2008 and Prior)

  1. Perfect Line(s) 12, 13 or 14, if left blank. Note: All line references refer to Form 943, Rev 2008 and prior. See Exhibit 3.11.13-5 for editing instructions.

    IF AND THEN
    Line 12 is blank Taxpayer indicates on attachment total deposits for the year Edit to Line 12.
    Line 12 is blank Line 11 and 13 are present Edit line 12. See Figure 3.11.13-52
    Line 12 has an amount   Accept taxpayer figures.
    The ROFTL and Line 13 are blank,   Enter Line 11 amount on Line 13. See Figure 3.11.13-53
    Lines 13 and 14 are blank,   Enter the difference between Lines 11 and 12 on Line 13 or 14, whichever is appropriate and see Figure 3.11.13-54Figure 3.11.13-55
    Lines 12, 13 and 14 have the same amount, Line 11 is more than Line 12, Place an asterisk (*) to the left of Line 14.
    Line 11 is less than Line 12, Place an asterisk (*) to the left of Line 13.

    Figure 3.11.13-52

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Perfecting Line 12 using Line 11 and Line 13 Information

    Figure 3.11.13-53

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Perfecting Line 13 When Lines 12, 13, 14, and ROFTL are Blank

    Figure 3.11.13-54
    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Perfecting Line 13 using Line 11 and Line 12 Information

    Figure 3.11.13-55
    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Perfecting Line 14 Using Line 11 and Line 12 Information

3.11.13.19.17  (01-01-2014)
Line 13c, 13d and 13e, Form 943 and 943-PR (Rev 2010 only)

  1. Lines 13c, 13d and 13e are all transcription lines for 2010. Accept taxpayers figures.

3.11.13.19.18  (01-01-2014)
Line 12, Subtotal, Line 13, Balance Due, and Line 14, Overpayment (Rev 2011-2012)
Line 14, Subtotal, Line 15, Balance Due, and Line 16, Overpayment (Rev. 2009, 2010 and 2013)

  1. Process Line 12 and 13 (Rev 2011-2012 , Line 14 and 15, Rev 2009, 2010 and 2013) as follows: Note: Line references refer to Form 943, Rev 2009 and Subsequent as indicated.

    IF AND THEN
    Line 12 (Rev 2011 -2012, or Line 14, Rev 2009, 2010 and 2013) is blank, zero, dash or "none"  
    Rev 2013- Add Lines 12, and 13a and edit the result to Line 14 (Rev 2013)
    Rev 2011 and 2012- Add Lines 10 and 11a and edit the result to Line 12 (Rev 2011- 2012).
    Rev 2010,- Add Lines 12, 13a, and 13e and edit the result to Line 14.
    Rev 2009 - Add Lines 12 and 13a and edit the result to Line 14.
     
    Line 13 and 14 (Rev 2011- 2012 , or Line 15 and 16 Rev 2009, 2010 and 2013) are blank, zero, dash or "none" , Line 12 (Rev 2011- 2012, or Line 14, Rev 2009, 2010 or 2013) have different entries,
    Rev 2011- 2012 - Edit Line 9 to Line 13.
    Rev 2009, 2010 and 2013-- Edit Line 11 amount to Line 15.

    Rev 2011- 2012 Line 9 is more than the amount on Line 12
    Rev 2009, 2010 and 2013- Line 11 is more than the amount on Line 14,

    Rev 2011- 2012 Subtract 12 from Line 9 and enter the result on Line 13.
    Rev 2009, 2010 and 2013- Subtract Line 14 from Line 11 and enter the amount on Line 15. See Figure 3.11.13-56.

    Rev 2011- 2012 Line 12 is more than Line 9
    Rev 2009, 2010 and 2013– Line 14 is more than the amount on Line 11,

    Rev 2011 - 2012 Subtract Line 9 from Line 12 and enter the amount on Line 14.
    Rev 2009, 2010 and 2013– Subtract Line 11 from Line 14 and enter the amount on Line 16.
    There are entries on both:
    Rev 2011 -2012Lines 13 and 14, and Line 9 equals Line 15, Total Liability for the Quarter,
    Rev 2009, 2010 and 2013- Line 15 and Line 16, and Line 11 equals Line 17, Total Liability for the Quarter,

    Rev 2011 -2012 Line 9 is more than Line 12,
    Rev 2009, 2010 and 2013-
    Line 11 is more than Line 14.

    Rev 2011- 2012 Edit an asterisk (*) to the left of the incorrect entry on Line 14.
    Rev 2009, 2010 and 2013- Edit an asterisk (*) to the left of the incorrect entry on Line 16.
    Rev 2011 - 2012 Line 12 is more than Line 9,
    Rev 2009, 2010 and 2013- Line 14 is more than the amount on Line 11

    Rev 2011- 2012 Edit an asterisk (*) to the left of the incorrect entry on Line 13.
    Rev 2009, 2010 and 2013- Edit an asterisk (*) to the left of the incorrect entry on Line 15. See Figure 3.11.13-57

    Rev 2011 - 2012 The entry on Line 13 belongs on Line 14 and the amount on Line 12 is more than the amount on Line 9,
    Rev 2009 and 2010- The entry on Line 15 belongs on Line 16 and the amount on Line 14 is more than the amount on Line 11,

    Rev 2011 - 2012 The taxpayer indicates a refund by placing parenthesis around the Line 13 amount or by checking the "Refund" box or "Apply to next return" box,
    Rev 2009, 2010 and 2013- The taxpayer indicates a refund is due by placing parenthesis around the Line 15 amount or by checking the "Refund" box or "Apply to next return" box,

    Rev 2011- 2012 Edit an asterisk (*) to the left of the amount on Line 13 and edit the amount to Line 14.
    Rev 2009, 2010 and 2013- Edit an asterisk (*) to the left of the amount on Line 15 and edit the amount to Line 16.

    Rev 2011 - 2012 A negative amount is shown on Line 13 or 14 and entries are shown on Line 9 and/or 12
    Rev 2009, 2010 and 2013- A negative amount is shown on Line 15 or 16 and entries are shown on Line 10 and/or 14,

    Rev 2011- 2012 If Line 12 is blank, zero, dash or none,
    Rev 2009, 2010 and 2013–If Line 14 is blank, zero, dash or "none" ,

    Rev 2011- 2012 Edit the Line 9 amount to Line 12
    Rev 2009, 2010 and 2013– Edit the Line 11 amount to Line 14.

    Rev 2011- 2012 Line 9 is more than Line 12,
    Rev 2009, 2010 and 2013- Line 11 is more than the amount on Line 14,

    Rev 2011- 2012 Subtract Line 9 from Line 12 and enter the amount on Line 13.
    Rev 2009, 2010 and 2013– Subtract Line 11 from Line 14 and enter the amount on Line 15.

    Rev 2011- 2012 Line 12 is more than the amount on Line 9,
    Rev 2009, 2010 and 2013- Line 14 is more than the amount on Line 11,

    Rev 2011- 2012 Subtract Line 12 from Line 9 and enter the amount on Line 14.
    Rev 2009 , 2010 and 2013- Subtract Line 14 from Line 11 and enter the amount on Line 16.

    Figure 3.11.13-56

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Perfecting Line 15 (Rev 2009, 2010 and 2013) when entry on Line 11 is more than the Line 14 entry

    Figure 3.11.13-57

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Deleting a Misplaced Entry on Line 15 (Rev 2009, 2010 and 2013, Line 14 is More than Line 11)

3.11.13.19.19  (01-01-2014)
Monthly Summary of Federal Tax Liability— Line 15, (Rev 2011- 2012),
Line 17, (Rev. 2009, 2010 & 2013
Line 15, (Rev. 2008 and Prior) and
Form 943–A (ROFTL)- Schedule Indicator Code (SIC)

  1. When Line 9, Total Taxes, (Rev 2008 and prior and 2011- 2012) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , the taxpayer is required to complete a Record of Federal Tax Liability (ROFTL). Depending on their tax liability in previous years, the taxpayer should complete Line 15 (Rev 2008 and prior, and 2011- 2012, or Line 17, Rev. 2009, 2010 and 2013), Monthly Summary of Federal Tax Liability, or Form 943-A, Agricultural Employer's Record of Tax liability. The taxpayer will indicate in the check boxes between Line 14 and 15, (Revision 2008 and prior and 2011 - 2012, or Lines 16 and 17, Revision 2009, 2010 and 2013) which ROFTL they are to complete.

  2. The Schedule Indicator Code (SIC) is used by Code and Edit to remove the requirement for data entry to capture the ROFTL information when it is determined the ROFTL is unnecessary incomplete or outside of the tolerance.

  3. When determining whether a SIC code should be edited,

    IF THEN
    Revision 2013, 2010 or 2009
    1. Use Line 11.

    2. If Lines 10 and 11 are blank, use Line 9

    3. If Line 11 is blank, but line 10 contains an entry, compute line 11 by combining lines 9 and 10.

    Revision 2011- 2012
    1. Use Line 9.

    2. If Lines 8 and 9 are blank, use Line 7

    3. If Line 9 is blank, but line 8 contains an entry, compute line 9 by combining lines 7 and 8.

  4. If a SIC needs to be entered on the return, edit the applicable SIC in the right margin, at the end of Line 1, "Number of agricultural employee employed...." (Form 943 and Form 943-PR).

    SCHEDULE INDICATOR CODE (SIC) CHART
    SIC CODE CONDITIONS
    1 Edit SIC 1 when:
    1. Line 9 (Rev 2011- 2012 ), or Line 11 (Rev 2013, 2010 and prior) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and ROFTL is incomplete, (i.e. Form 943, Line 15, Rev 2008 and prior, or Rev 2011-2012, or Line 17, Rev 2009, 2010 & 2013).

    2. The return shows all zeros or is non-taxable.

    3. A negative or minus (-) amount appears in the ROFTL (Form 943 Line 15, Rev 2008 and prior, or Rev 2011- 2012, or Line 17, Rev 2009, 2010 & 2013).

    4. Return prepared under IRC 6020(b).


    Note: If the taxpayer completed both the Line 15, Rev 2008 and prior, or Rev 2011- 2012, or Line 17, Rev 2009, 2010 & 2013 ROFTL and Form 943-A, only edit SIC 1, if BOTH are not to be entered by ISRP.
     

3.11.13.19.20  (01-01-2014)
Perfecting Line 15, (Rev 2008 and prior, or 2011- 2012) or
Line 17 (Rev. 2009, 2010 & 2013) and Form 943-A (any year)

  1. Perfect Line 15 (Rev 2008 and prior or 2011 - 2012, or Line 17, Rev 2009, 2010 & 2013) or Form 943-A as follows:

    IF THEN
    The taxpayer has completed both, Line 15 (Rev 2008 and prior or 2011- 2012, or Line 17, Rev 2009, 2010 & 2013) "A" through "M" and Form 943-A, • ISRP will pick up both entries and Master File (MF) will determine the correct entry.
    • If a negative or minus (-) amount appears on Form 943, Line 15 (Rev 2008 and prior or 2011- 2012, or Line 17, Rev 2009, 2010 & 2013), "A" through "M" , or Form 943-A, line through the ROFTL with the negative or minus (-) to ensure it will not be captured.
    Form 943, Lines 15A through 15L, (Rev 2008 and prior or 2011- 2012, or Line 17A through 17L, Rev 2009, 2010 & 2013), are blank but Form 943-A has only monthly amounts,
    1. Edit the monthly totals from 943-A to the applicable monthly line(s) of the ROFTL i.e. Line 15 (Rev 2008 and prior or 2011- 2012, or Line 17, Rev 2009, 2010 & 2013).

    2. Line through "(/)" the Forms 943–A.

    The taxpayer completes more than one Form 943-A, Then combine the Daily Tax Liabilities from each Form 943-A to one Form 943-A and "/" (line through) the Forms 943-A that are not to be entered.
    The taxpayer does not complete the ROFTL area of Form 943, but completes an attachment in the same format as the ROFTL or the Form 943-A, Put the attachment or Form 943-A immediately behind the Form 943. Do not write the taxpayers figures in the ROFTL area.
    Form 943, Lines 15A through 15L, (Rev 2008 and prior or 2011- 2012, or Line 17A through 17L , Rev 2009, 2010 and 2013) are entered, but Line 15M (or Line 17M (Rev 2009, 2010 and 2013) is blank, Total the Lines 15A through 15L, (or Lines 17A through 17L) and enter the result on Line 15M (or Line 17M)
    Form 943-A shows an entry for a day which is not in that month (e.g., an entry for February 29th and it not a leap year),
    1. Asterisk (*) to the left of the entry,

    2. Enter the amount to the last valid day of the month,

    3. If an entry already exists in the field, add the amounts together, edit an asterisk (*) to the left of the taxpayer's entry and enter the resulting amount. (An exception would be more than one entry on the same line, add figures together and put total to left of line).

  2. Combine multiple deposits shown on the same line and enter the correct amount to the left of the asterisk (*).

3.11.13.20  (01-01-2014)
944, Employer's ANNUAL Federal Tax Return,

  1. New line 4d was added to report "Taxable wages & tips subject to Additional Medicare Tax Withholding" at 0.9% (.009) of wages /tips. Section 3101 (b)(2), as added by P.L. 111-148, sections 9015 & 10906, and further amended by section 1402(b) of P.L. 111-152 (collectively known as the "Affordable Care Act" .

  2. Form 944 may be filed annually by taxpayers with a tax liability of $1,000 or less. The purpose of the annual filing option is to reduce the burden for the smallest of the small business taxpayers. See Exhibit 3.11.13-63.11.13-17 and 3.11.13-20 for Form 944; These forms are processed through ISRP only.

  3. The following types of taxes are reported on a Form(s) 944

    • Income Withholding Tax (Form 944 only).

    • Social Security Tax

    • Medicare Tax

  4. Domestic and Foreign consideration of Form 944:

    1. Domestic Form 944-
      • An employer whose principal place of business is in one of the 50 states or the District of Columbia.

    2. Foreign Form 944-
      • Form 944 with a foreign (international) address: An employer whose principal place of business is in one of the 50 states or the District of Columbia, but they employ individuals in Puerto Rico, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, or the U.S. Virgin Islands (OSPC ONLY WITH A FOREIGN ADDRESS ).

  5. Foreign Return Processing:

    1. See IRM 3.11.13.12.6 for foreign address processing.

    2. All Forms 944 with a foreign address or an address of an U.S. possession should be processed at the Ogden Submission Processing Campus (OSPC). If these returns are received in any other Submission Processing Campus, they must be transshipped to OSPC. APO, DPO and FPO are not considered foreign addresses.
      • If the return is unnumbered, withdraw it from the batch and prepare Form 13195 requesting the Letter 86C be sent to the taxpayer. Attach a Form 4227 for routing to OSPC.
      • If the return is numbered, use AC 650.

    3. Withheld Income Tax should not be reported on Forms 944-PR, or Form 944-SS returns. However, certain filers may have employees who are subject to income tax withholding. If such filers include income tax withholding and/or income tax withholding adjustments on Form 944-PR or Form 944-SS convert these returns to Form 944.

      Note:

      The following procedures will change the Filing Requirement from a Form 944-PR, or Form 944-SS, to a Form 944 filer. Care should be taken before entering this change:
      • Code a numbered return with AC 620 for Reject processing.
      • Prepare a substitute return for the erroneous foreign return if the return is unnumbered.
      • Prepare and release promptly a Form 2363, (Master File Entity Change), to change the BMF filing requirement code from "6" or "7" to "1" .

    4. Otherwise, the instructions provided for Form 944 returns filed with foreign or U.S. Possession addresses should be followed to the extent possible to process these returns. Specific procedures for these returns are:
      • An address change may be made on the returns if it will not change the Filing Requirement Code from "6" to "7" or "1" , or from "7" to "1" or "6" . Otherwise, a Form 2363 must be prepared showing TC 013.
      • See IRM 3.11.13.12.1 for instructions to follow regarding the Name Control and see the Name Control Job Aide, Document 7071A for determining a Name Control.

    5. Do not send these returns back for missing signature, initiate letter 21C.

  6. Form 944 returns that have been early filed before the end of the year (e.g., tax year (TY) 2013 returns filed on or before December 31, 2013) must be held until the first cycles of the next year (2014). Edit Action Code 480 and continue to process the return.

  7. Non-payroll items should be reported on Form 945, Annual Return of Withheld Federal Income Tax. See IRM 3.11.13.22 for more information. Non-Payroll items include:

    • Backup Withholding,

    • Pensions and Annuities,

    • Gambling Winnings,

    • IRAs and 401K,

    • Military Pensions,

  8. This table mainly applies to domestic 944 returns.

    IF AND THEN
    There are entries on Lines 2, 7, 8, and 11 (Rev 2011 and subsequent , or 2, 7, 9, 10 and 13, Rev 2010 and prior) or only Line 1 , There is an indication the taxpayer is filing for Non-Payroll Item (e.g., the entity name contains such references as Employee Pension Plan, Pension, 401K Plan, Profit Sharing Plan, Retirement Fund, Lottery, IRAs, Annuity, etc.),
    1. Correspond to determine the taxpayer's intent,

    2. If the taxpayer's reply indicated they should have reported the entries on a Form 945, route the Form 944 to Accounts Management (AM) on Form 3465 with a notation "Non-Payroll on Form 944" .

    Note:

    This procedure will advise Accounts Management (AM) to delete the filing requirement for the Form 944 and establish a new filing requirement for Form 945 and to post any payment(s) to the correct module (e.g., Form 945 tax period) and to return the Form 944 to the taxpayer, with a letter explaining how they must now report their tax.

    Caution:

    If it can be determined the taxpayer has a "Non-Qualified Plan" , correspond with the taxpayer explaining that it was a wage deferred plan subject to wage withholding and must be reported on Form 941. For an explanation of Non-Qualified Plan, See (9) below.


  9. Non-Qualified Plans - Certain companies (for example, Life Insurance Companies) sell annuity contracts to participants in "non-qualified" plans or deferred compensation plans. Distribution of these contracts are payments of deferred wages subject to withholding and reportable on Form W-2 and Form 944.

    1. If the taxpayer notes a Form 944 in the left margin, or you are able to determine that it is a "non-qualified plan" , edit a CCC "B" on the return and continue to process.

3.11.13.21  (01-01-2014)
Form 944, Return Perfection and Line Editing

  1. See IRM 3.11.13.12 for entity perfection procedures.

  2. While Form 944 (Domestic and Foreign) is the annualized employer's federal tax return, there are some significant differences between Form 944 (Domestic and Foreign). The table below compares Form 944 (Domestic and Foreign) for tax years 2010, 2011, 2012 and 2013:

    Line Item Description Form 944 (Rev 2010) Form 944 (Rev 2011) Form 944 (Rev 2012) Form 944 (Rev 2013)
    Wages, tips, and other compensation Line 1 Line 1 Line 1 Line 1
    Total income tax withheld form wages, tips, and other compensation Line 2 Line 2 Line 2 Line 2
    If no wages, tips, and other compensation are subject to social security or Medicare tax Line 3 Line 3 Line 3 Line 3
    Taxable social security and Medicare wages and tips Line 4 Line 4 Line 4 Line 4
    Taxable social security wages Line 4a Line 4a Line 4a Line 4a
    Taxable social security tips Line 4b Line 4b Line 4b Line 4b
    Taxable social security wages Line 4a Line 4a Line 4a Line 4a
    Taxable Medicare wages and tips Line 4c Line 4c Line 4c Line 4c
    Taxable wages and tips subject to Additional Medicare Tax withholding       Line 4d
    Total social security and Medicare taxes Line 4d Line 4d Line 4d  
    Add Column 2 from lines 4a, 4b, 4c, and 4d       Line 4e
    Qualified employees paid exempt wages Line 5a      
    Exempt wages/tips paid to qualified employees (after 03/31/2010) Line 5b      
    Total taxes before adjustments Line 5d Line 5 Line 5 Line 5
    Current year's adjustments Line 6 Line 6 Line 6 Line 6
    Total taxes after adjustments Line 7 Line 7 Line 7 Line 7
    Advanced earned income credit (AEIC) payments made to employees Line 8      
    Total taxes after adjustment for advance EIC Line 9      
    Total deposits for this year, including overpayment applied from prior year (PY) and overpayment applied Form 944-X, 944-XPR, 941-X, or Form 941-X(PR) Line 10 Line 8 Line 8 Line 8
    COBRA Premium assistance payments Line 11a Line 9a Line 9a Line 9a
    Number of individuals provided COBRA premium assistance reported on Line 9b (Rev 2011 and subsequent ), or Line 11a (Rev 2010 and prior) Line 11b Line 9b Line 9b Line 9b
    Number of qualified employees paid exempt wages 03/19–03/31 Line 11c      
    Exempt wages for 03/19–03/31 Line 11d      
    Exempt social security tax for 03/19–03/31 Line 11e      
    Add:
    Rev 2011 and subsequent - Lines 8 and 9a
    Rev 2010- Lines 10, 11a and 11e,
    Line 12 Line 10 Line 10 Line 10
    Balance Due Line 13 Line 11 Line 11 Line 11
    Overpayment Line 14 Line 12 Line 12 Line 12
    Month ROFTL Line 15a -15l Line 13a- 13l Line 13a- 13l Line 13a-13I
    State deposit code Line 16 Line 14    
    Final return check box Line 17 Line 15 Line 14 Line 14
    Seasonal employer box Does not apply Does not apply Does not apply Does not apply
    Third Party Designee Part 4 Part 4 Part 4 Part 4
    Sign here Part 5 Part 5 Part 5 Part 5
    For paid preparer only Part 5 Part 5 Part 5 Part 5

  3. ISRP is capable of processing Form 944 returns filed on a Revision 2010 , 2011, 2012 or 2013 return. Therefore, all Form 944 returns filed, with revision 2009 and prior, require conversion to a 2010 revision. The table below shows the lines on Revisions year 2008 and prior, or year 2009, which will need to be converted.

    Lines for Revision 2008 and prior or 2009 will need to be edited to the 2010 revision :
    If taxpayer filed a: Form 944, Revision 2009, convert to Revision 2010, as follows: If taxpayer filed a: Form 944, Revision 2008 and prior, convert to Revision 2010, as follows:
    Change Line 5 to Line 5d Change Line 5 to 5d
     
    • Renumber Line 6a to 6

    • Delete (X) Lines 6b through 6f

      Note:

      Enter the Line 6f, Total Adjustments, amount on Line 6 (Form line 6a).

      For Line 7 is blank, combine Line 5d and 6 and enter result.
    For Lines 8 and 9, review tax year of return:
    • If the tax year is 2011 or subsequent- "X" any entry on Lines 8 and 9.

    • If the tax year is 2010 and prior-accept the taxpayer's entry.

    For Lines 8 and 9, review tax year of return:
    • If the tax year is 2011 or subsequent- "X" any entry on Lines 8 and 9.

    • If the tax year is 2010 and prior- accept the taxpayer's entry.

      Line 10- No changes
      Renumber Line 11 to 13
      Renumber Line 12 to 14
    Form 944, Page 2
      Renumber Line 13 to 15
      Renumber Line 14 to 16
      Renumber Line 15 to 17

  4. Procedures when page 1 or page 2 of Form 944 is missing:

    IF THEN
    Page 1 of Form 944 is missing, Follow local procedures to reduce the chance of duplicating letters being sent to the taxpayer. Use tools such as IDAP and IDRS (Command Code (CC) BMFOL and ERVIN) and request page 2 be associated with page 1 when possible.

    If it is not possible to associate:
    1) Insert a blank copy of page 1.
    2) Edit from page 2:
    1. Taxpayer's name (If name only research for EIN).

    2. Taxpayer's EIN (If EIN only research for name).

      Note:

      If Name and EIN fields are blank on page 2 and research cannot be performed to obtain the entity information; then destroy page 2. If available, use the envelope information before destroying page 2.

    3. Tax Period (Edit the tax period in the following priority):
      1- Received date,
      2- Signature date,
      3- Current date.

    4. Address (Edit in the following priority)
      1 - From envelope if names match.
      2 - Leave blank and allow to fall out to ERS.

    Note:

    If research is being performed in b) above obtain address information also.


    3) Edit a Received Date as necessary.
    4)
    Edit Action Code 211 and correspond using Letter 21C paragraph 2, for missing page (refer to Form 13195).
    If page 2 of Form 944 is missing, Follow local procedures to reduce the chance of duplicating letters being sent to the taxpayer. Use tools such as IDAP and IDRS (command Code (CC) BMFOL and ERVIN) and request page 2 be associated with page 1 when possible.
    If it is not possible to associate:
    1. Insert a blank copy if page 2 behind the taxpayer's page 1,

    2. Edit the last 4 digits of the EIN to page 2,

    3. Use Action Code 211 and correspond using Letter 21C paragraph 2, for a missing page (Refer to Form 13195).

  5. Code and Edit examiners should edit on the return the required information in the designated location, refer to IRM 3.11.13 for form consistency editing procedures.

  6. After editing, Form 944, the schedules and attachments should be in the following sequential order when placed back into the batch:

    1. Form 944, page 1

    2. Form 944, page 2

    3. Schedule 945-A, Annual Record of Tax Liability (12-Month ROFTL), if applicable

    4. Attachments, if applicable

  7. Any line with any incorrect entry which is negative, minus amount, or has been subtracted should be edited with an asterisk (*) to the left of the entry and the amount edited to the correct line, if it can be determined.

  8. Code and Edit examiners should ensure the jurat and authorized signature are shown and are in their proper location on the return.

  9. Always edit money amounts in DOLLARS and CENTS.

  10. Verify all negative, minus, or subtracted amounts ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  11. If any transcription line entries are illegible, place an asterisk (*) to the left of the taxpayer's entry and enter the correct amount.

  12. If a Form 944 has been changed to Form 941, by crossing out "944" and writing "941" on the return, research (INOLE) to determine the correct filling requirement for the taxpayer.

    IF AND THEN
    Research provides filing requirement, Filing requirement is for Form 944, Process return as a Form 944.
    Filing requirement is for Form 941, Process return as a Form 941. Renumber T lines.
    Research does not provide filing requirement,   Process return as a Form 944.

    Note:

    When processing a Form 944 as a Form 941:
    • If only the monthly tax liability fields are completed that apply to the Form 941 quarter being filed for, "/" (line through) the blank months that do not apply and renumber only the applicable months (e.g., Month 1, 2 and 3).
    • If there is more than one quarter(s) worth of tax liability showing, edit SIC 1 to the return to ensure the ROFTL will not be entered by ISRP.

3.11.13.21.1  (01-01-2014)
Line 1, Wages, tips, and other compensation (Domestic Only)

  1. Process Line 1 as follows:

    IF AND THEN
    Line 1 is zero, "none" , or blank, Line 4a and 4c, columns 1 has an entry greater than zero or "none" , Edit the amount from Line 4c, column 1 to Line 1. See Figure 3.11.13-58.
    Line 1, and 4a, 4b, 4c or 4d (Rev 2013) or 4a, 4b, or 4c (Rev 2012 or prior) column 1 or 2 are blank, zero or none  
    1. Review the return and attachments for an indication why the lines are blank,

    2. If none, correspond with the taxpayer for Lines 1 and 4a, 4b, 4c and 4d (Revision 2013) or 4a, 4b, and 4c (Revision 2012 and prior). See IRM 3.11.13.6 before corresponding,

    Caution:

    DO NOT correspond for Line(s) 2, 4a, 4b, 4c or 4d (Revision 2013) or Line(s) 2, 4a, 4b or 4c (Revision 2012 or prior) if there is a definite indication tax was withheld:
    • From only third-party sick pay,
    • From supplemental unemployment,
    • When there is an indication that the wages are exempt for social security and/or Medicare by an entry in the check box on Line 3. If so, edit CCC B.

    Line(s) 4a, 4b, 4c or 4d (Revision 2013) column 1 or 2 are blank, zero or none or Line(s) 4a, 4b or 4c (Revision 2012 or prior) column 1 or 2 are blank, zero or none Line 1 has and entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , Do not correspond for social security and Medicare wages if there is no significant entry on Lines 4a, 4b, or 4c or 4d (Rev 2013) or Lines 4a, 4b, or 4c (Rev 2012 and prior).

    Figure 3.11.13-58

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Edit Line 1 when blank and Line 4c has an entry


More Internal Revenue Manual