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IRS Form 941: How to Fill Out Employer’s Quarterly Federal Tax Return
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Table of Contents
What is Form 941?
Who needs to file irs form 941, what is the deadline for filing form 941, how to file irs form 941, irs form 941 instructions: a step-by-step guide, other small-business tax forms to know.
IRS Form 941, also known as the Employer’s Quarterly Federal Tax Return, is where businesses report the income taxes and payroll taxes that they withheld from their employees’ wages — as well as calculate and report the employer’s Social Security and Medicare tax burden.
Unlike individual taxpayers who have to file only one tax return per year, many businesses are required to file quarterly tax returns . Failure to file IRS Form 941 on time or underreporting your tax liability can result in penalties from the IRS .
» MORE: NerdWallet's best small-business accounting software
Completing Form 941 includes reporting:
Wages you paid.
Tips your employees reported to you.
Federal income tax you withheld from your employees' paychecks.
Employer and employee shares of Social Security and Medicare taxes.
Additional Medicare tax withheld from employee paychecks.
Current quarter’s adjustments to Social Security and Medicare taxes for fractions of cents, sick pay, tips and group-term life insurance.
Qualified small-business payroll tax credit for increasing research activities.
After accounting for all of these items, IRS Form 941 will tell you how much money you should have paid or will need to pay to the government to cover your payroll tax responsibilities for the quarter.
Note: The video below relates to the 2019 version of Form 941 but can still help you understand the process.
This guide explains everything you need to know about IRS Form 941, along with step-by-step instructions to help you complete this form.
Most businesses with employees have to file IRS Form 941 each quarter to report and calculate employment taxes. Some states have analogs to Form 941 that you may also have to file to report income withholdings and employer taxes at the state level.
These types of businesses don’t have to file Form 941:
Seasonal businesses don’t have to file during quarters when they haven’t hired anyone.
Businesses that hire only farmworkers.
People who hire household employees, such as maids or nannies.
The deadline for filing Form 941 is one month following the last day of the reporting period. Here are the calendar deadlines for filing Form 941:
First quarter: April 30, for the period covering Jan. 1 to March 31.
Second quarter: July 31, for the period covering April 1 to June 30.
Third quarter: Oct. 31, for the period covering July 1 to Sept. 30.
Fourth quarter: Jan. 31, for the period covering Oct. 1 to Dec. 31.
If the due date falls on a weekend or holiday, then you have to file by the next business day. If you file by mail, your return will be tracked according to the date of postage. You get an additional 10 business days to file if you’ve paid your employment tax deposits in full and on time for the entire quarter that’s covered by the return.
To submit the form
The fastest way to file Form 941 is through the federal e-File system . Business taxpayers can access e-File through most tax preparation software for small businesses . Your accountant or tax professional should also have access to e-File.
You can also mail Form 941. The mailing address depends on the state your business is in, whether you’re submitting payment with your return and what quarter you’re filing for. Be sure to include the payment voucher.
To make a payment
If you need to make a payment, you can do so through the EFTPS — Electronic Federal Tax Payment System . Any tax payments related to Form 941 can be made through EFTPS. You can also mail a check to the IRS.
IRS Form 941 is a three-page form. It has five parts and a payment voucher at the end if you’re submitting the form by mail with payment.
Here's a step-by-step guide and instructions for filing IRS Form 941.
1. Gather information needed to complete Form 941
Form 941 asks for the total amount of tax you've remitted on behalf of your employees for the quarter. In order to complete IRS Form 941 effectively and efficiently, gather the information that you’ll need ahead of time. This information includes:
Basic business information, such as business address and employer identification number, or EIN.
Number of employees.
Total wages you paid this quarter.
Taxable Social Security and Medicare wages for the quarter.
Total amount of federal income taxes, Social Security tax and Medicare tax withheld from employees’ wages this quarter.
Employment tax deposits that you’ve already made for the quarter.
If you use payroll software or accounting software , you should be able to retrieve the data you need for IRS Form 941. Additionally, most employers are required to make employment tax deposits on a monthly or semiweekly basis. You should also be able to get information by looking at your payment history in EFTPS or at your business bank account statements.
2. Fill in the business information at the top of Form 941
The first section asks for basic information about your business, as well as the quarter you’re filing for. In this section, you’ll provide your employer identification number , name and trade name (if applicable) and address.
3. Fill in Part 1 of Form 941
Part 1 is broken down into 15 lines about wages you’ve paid, federal income taxes withheld, etc.
This is the most involved section of Form 941, largely due to the calculations on line 5. However, lines 1-4 are based on the information you can gather from your accounting or payroll software. These lines will ask for:
Line 1: Number of employees you paid for the quarter.
Line 2: Total wages, tips and other compensation you paid for the quarter.
Line 3: Federal income tax withheld from wages, tips and other compensation you paid for the quarter.
Line 4: Check this box if the wages, tips and other compensation you paid isn't subject to Social Security and Medicare tax.
Line 4 won't apply to most businesses, so you can leave it blank. If you’re unsure if it applies to you, IRS Publication 15 explains the types of businesses that fall into this exemption.
The most complicated section of Form 941 involves lines 5a to 5d, where you calculate your taxable Social Security and Medicare wages. You’ll see a lot of decimals in this section of the form. Those decimals are a stand-in for the percentage of wages and tips deducted for Social Security and Medicare tax.
» MORE: See our payroll tax explainer
To make sure your calculations are correct, you need to break down the wages by type for lines 5a and 5b (i.e., regular wages or tips). Here’s an example of lines 5a to 5d for a business that had one employee. That employee earned $25,000 this quarter in wages and $5,000 this quarter in tips.
Line 5a: $25,000 x 0.124 = $3,100.
Line 5b: $5,000 x 0.124 = $620.
Line 5c: $30,000 x 0.029 = $870.
Line 5d: Leave blank because the employee doesn’t earn more than $200,000 per year.
Once you complete these calculations in lines 5a through 5d, you’ll add Column 2 from these lines and fill in the total on line 5e. Then, on line 6, you’ll add lines 3, 5e and 5f (if applicable) to calculate your total taxes before adjustments and fill in that total.
After this, you can calculate your total employment tax liability for the quarter. You’ll complete lines 7 through 9 if your business has any adjustments to report for fractions of cents, sick pay, tips and group term life insurance. The adjustments for sick pay and life insurance come into play if, for instance, an insurance company reimbursed a portion of your employee’s wages while they were on short-term disability. On line 10, you’ll fill in your total taxes after adjustments by combining the amounts in lines 6 through 9.
Next, if your business can claim payroll tax credits for increasing research activities, you’ll complete lines 11a through 11g and attach IRS Form 8974 . (Payroll tax credits are available to companies that engage in research and development in technology, science, medicine or related fields.) On line 12, you’ll subtract line 11g from line 10 in order to calculate your total taxes after adjustments and credits and fill in this total.
Then, on lines 13a to 13i, you’ll tally your total deposits and refundable advances. If your liability is higher than the deposits you’ve already made, the form will indicate a balance due on line 14.
If your employment tax liability is less than the deposits you’ve made, the overpayment gets noted on line 15. You can choose to receive a refund check or have the overpayment applied as a credit on your next tax return by checking one of the boxes next to line 15.
4. Fill in Part 2 of Form 941
Part 2 asks about your deposit schedule and tax liability for the quarter. In this part, you’ll indicate whether you’re a monthly or semiweekly schedule depositor. If you’re a monthly depositor, fill in the three boxes labeled Month 1, Month 2 and Month 3 — this total must equal the number on line 12 on Part 1.
If you’re a semiweekly depositor — meaning you have more than $50,000 for tax liability for the quarter — you’ll complete Form 941 Schedule B and attach it with this form. Schedule B breaks down your tax liability for each day of the quarter.
5. Fill in Parts 3 and 4 of Form 941
In Part 3, you’ll be asked if your business closed, if you stopped paying wages or if you’re a seasonal employer who doesn’t have to file IRS Form 941 every quarter. You’ll also report your health plan, wages and sick leave associated with COVID-related measures such as the employee retention credit .
In Part 4, you’ll be asked whether you authorize a third-party designee to speak with the IRS on behalf of your business with regard to this return. A third-party designee might be your CPA, enrolled agent or tax advisor. If you are granting authorization to a third-party designee, check the “Yes” box and fill in the person’s name and phone number. If you’re not, you’ll check the “No” box.
6. Review Form 941 and fill in Part 5
Before you sign and complete Part 5, review everything you’ve filled in to ensure that the information is correct. If you work with a tax advisor or business accountant, you may want them to review the return as well. Once you’ve reviewed your completed IRS Form 941, you’ll be able to sign and date Part 5.
If you’ve used a paid preparer (someone like a CPA or tax professional you’ve paid to complete this form on your behalf), they’ll complete the Paid Preparer Use Only section under your signature.
7. Submit Form 941 to the IRS and pay any remaining balance
If you’re filing online, you can use EFTPS to pay your tax bill. As an alternative, you can mail in the payment along with the payment voucher (Form 941-V) on the third page of Form 941 if your balance for the current quarter is less than $2,500, or if you’re a monthly depositor who owes a small balance (no more than $100 or 2% of the total tax due).
» MORE: Learn all the ways you can send money to the IRS
One of the reasons business taxes are so complex is that there’s never just a single return to file, and you may need to complete other related forms. Here a few to keep in mind:
IRS Form 1065: Known as the U.S. Return of Partnership Income, Form 1065 is an informational tax form used to report the income, gains, losses, deductions, credits and other applicable information for a partnership or LLC. See our guide.
Schedule C: IRS Schedule C is a tax form for reporting profit or loss from a business. You fill out Schedule C at tax time and attach it to or file it electronically with Form 1040. Schedule C is typically for people who operate sole proprietorships or single-member LLCs. See our guide.
Schedule SE: You use IRS Schedule SE to calculate how much self-employment tax you owe. See our guide.
Schedule K-1: Schedule K-1 is the federal tax form that partnerships, S corporations, trusts or estates use to report annual income, losses, credits, deductions and other distributions for each partner, shareholder or beneficiary. See our guide.
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How to Fill Out Form 941 (2023): Your Step-by-step Guide On the Form
If you have employees, you likely need to fill out and file Form 941 each quarter. Form 941 is jam-packed with different sections and calculations, which leaves room for errors. To avoid major mistakes, learn how to fill out Form 941 line by line.
We’ll handle creating and submitting Form 941 at quarter-end and year-end.
What is Form 941?
IRS Form 941 , Employer’s Quarterly Federal Tax Return, reports payroll taxes and employee wages to the IRS. Form 941 reports federal income and FICA taxes each quarter.
You must file Form 941 unless you:
- Filed a final return
- Are a seasonal employer
- Employ a household employee (e.g., nanny)
- Have farm employees (e.g., Form 943 )
- Are told by the IRS to file Form 944 instead
Information you report on Form 941 includes wages paid to employees, reported tips, federal income taxes withheld, Social Security and Medicare taxes (both employee and employer portions), and additional taxes withheld. You must also include adjustments to Social Security and Medicare taxes, sick pay, tips, and group-term life insurance.
Because of COVID-19, the IRS revised the 2020, 2021, and 2022 versions of Form 941. Per the IRS , do not use an earlier version of Form 941 to report 2023 tax information. If you need to report 2023 taxes, use the 2023 version of Form 941.
The IRS may adjust the form throughout the year to reflect new rules and laws. So, be sure to keep an eye out for revised forms.
How to fill out 941 Form
If you’re required to file Form 941, you’ve come to the right place. Learn how to fill out Form 941 by following the steps below.
1. Gather Form 941 information
Before you can begin filling out Form 941, you must collect some payroll information.
Gather the following to fill out Form 941:
- Basic business information, such as your business’s name, address, and Employer Identification Number (EIN)
- Number of employees you compensated during the quarter
- Total wages you paid to employees in the quarter
- Taxable Social Security and Medicare wages for the quarter
- Total federal income, Social Security, and Medicare taxes withheld from employees’ wages during the quarter
- Employment tax deposits you’ve already made for the quarter
- Information about paid sick or family leave wages, if applicable
- COBRA premium assistance credit information, if applicable
2. Fill out business information
At the top portion of Form 941, fill in your EIN, business name, trade name (if applicable), and business address.
Off to the right side, mark which quarter the information is for. For example, if the form is for the first quarter, put an “X” in the box next to “January, February, March.”
3. Fill in necessary sections on the form
Below is a box-by-box breakdown to help you fill out the rest of the form.
Form 941 is broken into five parts, each with their own sections. Depending on your business and employees, you might not need to complete all of the sections.
Part 1: Questions for the quarter
Part 1 has 15 lines. Some lines have multiple parts (i.e., 11a, 11b, etc.). Here are details about each of those lines and what information you must provide.
List the number of employees you paid during the quarter. This includes any employees who received wages, tips, and other compensation.
Per the IRS, only include the total number of those who worked on these dates or during pay periods that include these dates: March 12 (Q1), June 12 (Q2), September 12 (Q3), and December 12 (Q4). Do not include the following:
- Household employees
- Employees in nonpay status for the pay period
- Farm employees
- Active members of the U.S. Armed Forces
Say you have 11 employees working during September. Only 10 of the employees work during the pay period of 9/1 – 9/13. Because only 10 employees worked on or through September 12 , you would only report “10” on Line 1.
If you enter more than 250 employees on line 1, you must file Form 941 electronically.
Report the total compensation you paid to the applicable employees during the quarter. Include all wages, tips, and other compensation. This also includes “ordinary” sick pay (e.g., not qualified sick leave wages).
List the federal income tax withheld from employee wages, tips, and other compensation. This includes:
- Qualified sick leave wages
- Qualified family leave wages
- Qualified wages for the Employee Retention Credit
- Taxable fringe benefits
- Supplemental unemployment compensation benefits
Don’t include any income tax withheld by a third-party sick payer, if applicable. And, do not include qualified health plan expenses.
If no employee compensation is subject to Social Security and Medicare taxes, mark an “X” next to “Check and go to line 6” on line 4. If you mark that box, you can skip lines 5a, 5a(i), 5a(ii), 5b, 5c, 5d, 5e, and 5f.
If employees do have compensation subject to Social Security and Medicare taxes, fill out lines 5a-5f next.
The most confusing lines on Form 941 are 5a-5d. To calculate the totals for these lines correctly, break up the wages by type (e.g., regular wages or tips).
Lines 5a-5d are the totals for both the employee and employer portions of Social Security and Medicare taxes withheld from an employee’s wages.
On lines 5a and 5b, you must multiply taxable Social Security wages (5a) and taxable Social Security tips (5b) by 0.124.
The decimal represents the rate of Social Security tax on taxable wages. Both you and your employee must contribute 6.2% each paycheck for Social Security. Combined, you and your employee contribute 12.4%, which is the amount you multiply on lines 5a and 5b (0.124).
Multiply any qualified sick leave wages (5a(i)) and qualified family leave wages (5a(ii)) by 0.062 for Social Security tax. Because qualified sick leave and family leave wages aren’t subject to the employer portion of Social Security tax, you only need to multiply those wages by 6.2% (0.062).
For 2023, the Social Security wage base is $160,200. An employee’s annual income is no longer subject to Social Security tax after they earn above the wage base. Do not include any wages above the wage base on lines 5a-5d (including lines 5a(i) and 5a(ii)).
On line 5c, multiply taxable Medicare wages and tips by 0.029. You and your employee must both contribute 1.45% each paycheck for Medicare taxes. Combined, you and your employee pay 2.9%, or 0.029.
Medicare tax does not have a wage base. However, you must withhold an additional 0.9% for Medicare tax once an employee meets one of the following thresholds:
- Single with an annual income of $200,000 or more
- Married filing jointly with an annual income of $250,000 or more
- Married filing separately with an annual income of $125,000 or more
If applicable, account for the additional 0.9% on line 5d by multiplying taxable wages and tips subject to additional Medicare tax withholding by 0.009.
Let’s look at an example of calculating totals for lines 5a-5d for an employee. Say your employee earns $30,000 in regular wages and $2,000 in tips during the quarter. You did not have to pay the employee any sick leave or family leave wages.
Line 5a : Taxable Social Security wages* x 0.124 Line 5a(i) : Qualified sick leave wages* x 0.062 Line 5a(ii) : Qualified family leave wages* x 0.062 Line 5b : Taxable Social Security tips x 0.124 Line 5c : Taxable Medicare wages and tips x 0.029 Line 5d : Leave blank if employee doesn’t earn more than the applicable Medicare threshold
*Include taxable qualified sick and family leave wages paid in this quarter of 2023 for leave taken after March 31, 2021, and before October 1, 2021, on line 5a. Use lines 5a(i) and 5a(ii) only for taxable qualified sick and family leave wages paid in this quarter of 2023 for leave taken after March 31, 2020, and before April 1, 2021.
Line 5a: $30,000 x 0.124 = $3,720.00 Line 5a(i): $0 x 0.062 = $0.00 Line 5a(ii): $0 x 0.062 = $0.00 Line 5b: $2,000 x 0.124 = $248.00 Line 5c: $32,000 x 0.029 = $928.00 Line 5d: Leave blank
Fill out Columns 1 and 2 with the correct totals based on your wages and calculations. Be sure to separate the dollar and cents amounts on the form. For example:
Add the totals from Column 2 for 5a, 5a(i), 5a(ii), 5b, 5c, and 5d together to fill in the total on line 5e. Using the same data from above, you would input $4,896.00 on line 5e ($3,720 + $248 + $928).
Line 5f is specifically for documenting tax due on unreported tips.
The IRS may issue a Section 3121(q) Notice and Demand to employers. This notice tells you about the amount of tips received by employees that were unreported (e.g., employee failed to report tips or underreported tips to their employer).
If you receive a notice, fill in the amount the notice lists on line 5f. Do not fill out line 5f if you did not receive a notice from the IRS.
To get your total for line 6, add together totals from lines 3, 5e, and 5f (if applicable). Line 6 is the total amount of taxes you owe before any adjustments.
Fill out line 7 to adjust fractions of cents from lines 5a – 5d. At some point, you will probably have a fraction of a penny when you complete your calculations. The fraction adjustments relate to the employee share of Social Security and Medicare taxes withheld.
The employee portion of Social Security and Medicare taxes from lines 5a-5d may differ from the amounts you actually withheld from employees’ wages due to rounding.
For example, say your employee had a tax liability of $2,225.212. You can’t send 21.2 pennies to the IRS. Instead, you round the penny amount down to 21 cents.
Line 7 is for you to report these types of penny discrepancies. Say you paid $5,500.14. Your form states you should have paid $5,500.16. You would put -.02 on line 7 to show the penny discrepancy.
The fractions of cents adjustment can be either a positive or negative amount. Be sure to use the negative sign (not parentheses) to show a decrease.
Fill out line 8 if you have a third-party sick payer, such as an insurance company, that transfers the liability for the employer share of SS and Medicare taxes to you. Calculate third-party sick pay for the quarter and enter the total on line 8 as a negative (e.g., -$130).
Line 9 is for recording adjustments for tips and group-term life insurance .
On line 9, enter a negative amount for:
- Any uncollected employee share of Social Security and Medicare taxes on tips
- The uncollected employee share of Social Security and Medicare taxes on group-term life insurance premiums paid for former employees
Don’t fill in line 9 if you do not have any uncollected taxes for tips (Social Security and Medicare taxes) or group-term life insurance (employee share of taxes).
On line 10, fill in the total taxes after your adjustments (if applicable) from lines 6-9. Add the totals from lines 6-9 and fill in the sum on line 10.
Form 941 Line 11a is specifically for a payroll tax credit for increasing research activities. If this credit applies to you, enter the amount of credit from Form 8974 , line 12.
You must also attach Form 8974, Qualified Small Business Payroll Tax Credit for Increasing Research Activities, to Form 941.
Do not fill in line 11a if this credit does not apply to your business.
On line 11b, enter the nonrefundable portion of the credit for qualified sick and family leave wages from Worksheet 1, Step 2, line 2j (if applicable) for leave taken before April 1, 2021. Do not fill out this line if the credit does not apply to you.
Only complete line 11b if qualified sick leave wages and/or qualified family leave wages were paid in 2023 for leave taken after March 31, 2020 and before April 1, 2021.
Line 11c is reserved for future use. Do not fill this line out.
Line 11d is the total nonrefundable portion of credit for qualified sick and family leave wages for leave taken after March 31, 2021 and before October 1, 2021. Enter the nonrefundable portion of the credit for qualified sick and family leave wages from Worksheet 2, Step 2, line 2p.
Only complete line 11d if you paid qualified sick leave wages and/or qualified family leave wages in 2023 for leave taken after March 31, 2021 and before October 1, 2021.
Reserved for future use. Do not fill out.
Line 11f is reserved for future use. Do not fill anything out on this line.
Add lines 11a, 11b, and 11d together and enter the total on line 11g.
Record your total taxes after adjustments and nonrefundable credits on line 12. Subtract line 11g from line 10 and enter your total on line 12. The amount entered cannot be less than zero.
According to the IRS, You can either pay your amount with Form 941 or deposit the amount if both of the following are true:
- Line 12 is less than $2,500 or line 12 on your previous quarterly return was less than $2,500
- You didn’t incur a $100,000 next-day deposit obligation during the current quarter
You must follow a deposit schedule if both of the following apply to you:
- If line 12 is $2,500 or more and line 12 on your previous quarterly return was $2,500 or more
- You incurred a $100,000 next-day deposit obligation during the current quarter
List your total deposits for the quarter on line 13a. If you had any overpayments from previous quarters that you’re applying to your return, include the overpayment amount with your total on line 13a.
Also, include any overpayment you applied from filing Form 941-X, 941-X (PR), 944-X, or 944-X (SP) in the current quarter.
Line 13b is reserved for future use. Leave this line blank.
Line 13c is for the refundable portion of credit for qualified sick and family leave wages for leave taken before April 1, 2021. Gather the information from Worksheet 1, Step 2, line 2k.
Complete line 13c only if you paid qualified sick leave wages and/or qualified family leave wages in 2023 for leave taken after March 31, 2020 and before April 1, 2021.
Line 13d is reserved for future use. Do not fill out this line.
Line 13e is the refundable portion of credit for qualified sick and family leave wages for leave taken after March 31, 2021 and before October 1, 2021 from Worksheet 2, Step 2, line 2q.
Only complete line 13e if you paid qualified sick leave wages and/or qualified family leave wages in 2023 for leave taken after March 31, 2021 and before October 1, 2021.
This line is reserved for future use. Keep this line blank.
Input the total deposits and refundable credits on line 13g by adding up lines 13a, 13c, and 13e.
Line 13h is reserved for future use. Do not fill it out.
Line 13i is reserved for future use. Leave this line blank.
If line 12 is more than line 13g, enter the difference on line 14. You do not have to pay if your line 14 total is less than one dollar.
Do not fill out line 14 if line 12 is less than line 13g. Move on to line 15.
If line 13g is more than line 12, enter the difference on line 15.
Do not fill in both lines 14 and 15. Only fill out one of these lines.
Mark if you want the amount applied to your next return or if you want the IRS to send you a refund. If line 15 is under one dollar, the IRS will send a refund. Or, the IRS can apply it to your next return if you ask them to do so in writing.
Part 2: Deposit schedule and tax liability for the quarter
In Part 2, fill out information about whether you’re a semiweekly or monthly depositor. If you’re not sure which type of depositor you are, check IRS Publication 15 .
Next to line 16, you will see three boxes.
Mark an “X” next to the first box if:
- Line 12 on your Form 941 was less than $2,500 or line 12 on your previous quarterly return was less than $2,500 AND
- You didn’t incur a $100,000 next-day deposit obligation during the current quarter.
If you were a monthly depositor for the entire quarter, put an “X” next to the second box and fill out your tax liability for Months 1, 2, and 3. Your total liability for the quarter must equal line 12 on your form.
If you were a semiweekly depositor during any part of the quarter, mark an “X” next to the third box. You must also complete Schedule B, Report of Tax Liability for Semiweekly Schedule Depositors, and attach it to Form 941 if you were a semiweekly depositor.
Part 3: About your business
Above the section for Part 3, enter your business name and EIN one more time.
Part 3 includes lines 17-28 and asks you certain questions about your business. If a question does not apply to your business, leave it blank .
Part 3, line 17 asks you whether your business closed or stopped paying wages during the quarter. If you did close your business or stopped paying wages in the quarter, place an “X” next to the box that says “Check here.” Then, enter the final date you paid wages. Also, attach a statement to your final return.
If you hire employees seasonally and you don’t have to file a return for every quarter of the year, check the box on line 18.
On line 19, enter the qualified health plan expenses allocable to qualified sick leave wages for leave taken before April 1, 2021. You can also find this on Worksheet 1, Step 2, line 2b.
Enter the qualified health plan expenses allocable to qualified family leave wages for leave taken before April 1, 2021 from Worksheet 1, Step 2, line 2f.
Line 21 is reserved for future use. Leave it blank.
Line 22 is reserved for future use. Do not fill out this line.
Enter the qualified sick leave wages you paid to your employees for leave taken after March 31, 2021 and before October 1, 2021 on line 23. Include any qualified sick leave wages excluded from the definition of employment under sections 3121(b)(1)–(22). And, enter the amount on Worksheet 2, Step 2, line 2a.
Enter the qualified health plan expenses allocable to qualified sick leave wages for leave taken after March 31, 2021 and before October 1, 2021 on line 24. Enter this amount on Worksheet 2, Step 2, line 2b.
Enter the collectively bargained defined benefit pension plan contributions and collectively bargained apprenticeship program contributions allocable to qualified sick leave wages for leave taken after March 31, 2021 and before October 1, 2021. Enter this amount on Worksheet 2, Step 2, line 2c.
Enter the qualified family leave wages paid to your employees for leave taken after March 31, 2021 and before October 1, 2021. Include qualified family leave wages excluded from the definition of employment under sections 3121(b)(1)–(22). Also enter this information on Worksheet 2, Step 2, line 2g.
On line 27, input the qualified health plan expenses allocable to qualified family leave wages. Also enter this amount on Worksheet 2, Step 2, line 2h.
Enter the collectively bargained defined benefit pension plan contributions and collectively bargained apprenticeship program contributions allocable to qualified family leave wages for leave taken after March 31, 2021 and before October 1, 2021. Enter this amount on Worksheet 2, Step 2, line 2i.
Part 4: Third-party designee
Part 4 asks permission for the IRS to speak with your third-party designee. Your third-party designee is the individual (e.g., employee or tax preparer) who prepared Form 941 and is typically responsible for payroll tax prep.
If you want your third-party designee to be able to discuss your return with the IRS, mark an “X” next to the “Yes” box. Then, fill in the designee’s name and phone number. You must also select a five-digit PIN to use when talking to the IRS (e.g., 12345).
If you do not want another person to be able to discuss the return with the IRS, check off the box next to “No” and move on to Part 5.
The example below shows what it would look like if you chose “Yes.”
Part 5: Signature
After you complete all of the above sections, sign your form under Part 5.
The following people can sign Form 941:
- Sole proprietorship: Individual who owns the company
- Corporation or an LLC treated as a corporation: President, vice president, or other principal officer
- Partnership or an LLC treated as a partnership: Partner, member, or officer
- Single-member LLC: Owner of the LLC or a principal officer
- Trust or estate: The fiduciary
One of the authorized signers from above must sign Form 941 in the box next to “Sign your name here.” The signer must also print their name and title (e.g., president) and include the date and their phone number.
If you have someone else prepare Form 941 on your company’s behalf, the preparer must fill out the Paid Preparer Use Only section. This section includes the preparer’s name, signature, firm’s name, address, phone number, EIN, and date. Your preparer must also check off whether or not they’re self-employed.
After you complete all three pages of 941 and sign it, you’re ready to submit your form to the IRS.
4. Submit Form 941
Where you file Form 941 depends on your state and whether you make a deposit with your filing. To find out where to mail Form 941, check out the IRS’s website . You might also be able to electronically file Form 941, depending on your business and state.
File a new Form 941 with the IRS every quarter. Because Form 941 is a quarterly form, it has multiple due dates:
- April 30 for Quarter 1 (January 1 – March 31)
- July 31 for Quarter 2 (April 1 – June 30)
- October 31 for Quarter 3 (July 1 – September 30)
- January 31 for Quarter 4 (October 1 – December 31)
For additional details on completing Form 941 and sending it to the IRS, consult the IRS’s Form 941 Instructions .
How Patriot addresses Form 941
Patriot’s Basic Payroll software customers will get a prefilled version of Form 941 with all of the information we have available from them. It is the customer’s responsibility to review and file Form 941 with the IRS. Full Service Payroll customers will also receive a prefilled Form 941 that Patriot will file with the IRS on the customer’s behalf. Full Service Payroll customers can view their Form 941 in their company tax packets.
This article has been updated from its original publication date of June 24, 2019.
This is not intended as legal advice; for more information, please click here.
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What Is Form 941 Worksheet 1 And How To Use It?
Learn the easiest way to utilize Form 941 Worksheet 1 to figure the tax credit for paid time off provided to employees.
According to the American Rescue Plan Act of 2021 (ARP), enacted March 11, 2021, employers are required to provide paid time off to employees that request leaves for illness and other personal causes. Considering the health emergencies of the employed Americans, the government has promised to refund a portion of the qualified sick leave to the employers.
The employers, after approving and bearing the employee cost for the paid time off, are compensated by the federal agency with a tax credit. However, this refund applies to employers after a thorough evaluation by the IRS and is only processed per the specifications cited in the American Rescue Plan Act of 2021 (ARP) and more particularly in the Families First Coronavirus Response Act
The calculation for the paid time off and the figuration of the tax credit can be a fairly complex task.
Hence, the IRS encourages taxpayers to use Form 941 Worksheet 1, which must be included in Form 941 filing, to calculate and figure the tax credit for the paid time off provided by the employers.
The following will discuss in detail how you can use Worksheet 1 of Form 941 to calculate and figure the tax credit.
So, let’s get to it.
- What Is Form 941 Worksheet 1
- Form 941 Worksheet 1: An Overview
- Form 941 Worksheet 1: Step 1
Form 941 Worksheet 1: Step 2
- Form 941 Worksheet 1: Step 3
What Is Form 941 Worksheet 1?
Worksheet 1 is included in the Form 941 filing regime to help employers figure the tax credit for the refundable and the non-refundable portions of the qualified sick and family leave the credit. It has a series of steps that enable the employer to determine the employer’s share of social security tax and the paid sick and family leave the credit.
Form 941 Worksheet 1: An Overview
Worksheet 1 of Form 941 allows the employer to figure the employer’s portion of the social security tax and the paid time off provided to the employees in a quarter.
It has two basic steps and a third step (which is extended to Worksheet 2 of Form 941) as follows.
- Step 1: Determine the employer’s share of social security tax this quarter
- Step 2: Figure the sick and family leave credit
- Step 3: Employee Retention Credit for the Second Quarter
Let’s take a look at these steps in detail.
Form 941 Worksheet 1: Step 1
This step is all about determining the total employer’s share of social security tax. The amount is figured after subtracting any credit claimed on Form 8974 and any credit that’s yet to be claimed on Form 5884-C and/or Form 5884-D .
This step allows you to figure the sick and family leave the credit.
A variety of qualified sick leave wages that were included and reported on Form 941 are used to figure the sick and family leave the credit.
The non-refundable portion and the refundable portion of the credit for qualified sick and family leave wages for leave taken before April 1 of the year are calculated in this step.
Form 941 Worksheet 1: Step 3
Step 3 allows you to figure the employee retention credit for the second quarter of the year. This means the preparer must add the qualified health plan expenses and wages paid to the employee. The non-refundable portion of the credit for qualified sick and family leave wages for leave is deducted from the employer’s share of social security tax from Step 1. (Anchor link to Step 1)
While calculating and determining these amounts, it’s advised to keep a rough copy of Form 941 by your side. Worksheet 1 is called a worksheet for a reason. It allows you to thoroughly calculate and figure the total tax credit you can claim for the paid time off provided to your employees prior to filing.
You can further use this guide and this guide from the IRS while following the above steps.
eFile Form 941 With Tax1099 – A Convenient Approach To Tax Compliance
If you’re preparing your 941 forms, it is likely that you are using traditional forms of filing to send your returns and attachments to the IRS.
Here’s how Tax1099 can enhance your experience.
Tax1099 – an authorized agent of the IRS enables you to file your employment tax forms to the IRS in just a simple click with our 3-step process.
- Import your data
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Everything You Need To Know About Form 941 Schedule B
Penalties For Late Filing Form 941
IRS Form 941: Here’s Everything You Need To Know
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Update: instructions revised for irs form 941-x, adjusted employer’s quarterly federal tax return or claim for refund, does form 941 have to be filed electronically.
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Run » finance, what is tax form 941 and who needs to file.
File this form quarterly to report federal withholdings from employees and avoid penalties and fees.
IRS Form 941 is one of the many IRS tax forms with which business owners need to be familiar. Form 941 needs to be filed regularly. As a result, setting up your accounting systems properly is important to make the reporting and filing process as seamless as possible. Take the time to understand what information is required on Form 941 and to make filing this document part of business as usual.
[Read more: Working as an Independent Contractor? These Resources Will Help You Manage Your Taxes ]
What is IRS Form 941?
IRS Form 941 is more commonly known as the Employer’s Quarterly Federal Tax Return . This is the form your business uses to report income taxes and payroll taxes that you withheld from your employees’ wages. It also provides space to calculate and report Social Security and Medicare taxes.
Most businesses are required to file Form 941 quarterly, with a few exceptions. Seasonal businesses only need to file for the quarters in which they are operating. Businesses that hire farm workers or household employees, such as a maid, also don’t need to file Form 941 (but do need to file Schedule H from Form 1040 ). And if your business pays less than $1,000 in employment tax in a given tax year, you’ll need to file Form 944 instead.
[Read more: A Complete Guide to Filing Your Business Taxes ]
What do you need to report on Form 941?
Businesses need to fill out Form 941 to report federal withholdings from employees . This includes information such as wages; employee tips (as reported); federal income tax withholdings; employer and employee shares of Social Security and Medicare taxes; and additional Medicare tax withholdings. You may also need to include quarterly adjustments to Social Security or Medicare taxes for things like sick pay or tips.
Accounting for these items will result in a total amount of money you will need to pay to cover your payroll tax responsibilities for the quarter.
Note that there are penalties for failing to file Form 941. The IRS charges a penalty of 5% of the total tax amount due, and your business will continue to be charged an additional 5% every month the return has not been submitted for up to five months.
How to file Form 941
There are two options for filing Form 941: by mail or electronically. The most convenient option is to use the federal e-File system . This can be accessed through many common small business tax software providers, such as TurboTax, H&R Block, or TaxSlayer. If you work with an accountant or a CPA, they will likely have access to an e-file tool and can send the form and payment on your behalf.
Alternatively, you can mail Form 941 directly to the IRS. “The mailing address depends on the state your business is in, whether you’re submitting payment with your return and what quarter you’re filing for,” notes NerdWallet . The IRS provides a list of addresses according to your state here . If you do need to send payment, mail a check made out to U.S. Treasury with your form.
When is Form 941 due?
File Form 941 with the IRS one month after the last day of the reporting period to avoid penalties. This means the due dates are:
- April 30 , for the first quarter covering Jan. 1 to March 31.
- July 31 , for the second quarter covering April 1 to June 30.
- October 31 , for the third quarter covering July 1 to Sept. 30.
- January 31 , for the fourth quarter covering Oct. 1 to Dec. 31.
On top of facing penalties for failing to file your tax return, you will also be charged an initial penalty of 0.5% of the unpaid tax amount if you also did not pay the taxes owed. After receiving a notice of intent to levy from the IRS, the penalty will increase to 1% after ten days. This penalty will continue to increase every month until the payment is made.
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- HELP & INFORMATION
The IRS continues to remind taxpayers to watch out for email schemes. Taxpayers will only receive an email from EFTPS if they have opted in for email notifications when they sign up for email through EFTPS. Report all unsolicited email claiming to be from the IRS or an IRS-related function to [email protected].
You must be enrolled to use the EFTPS® tax payment service. To enroll, click on Enrollment at the top of this page and follow the steps. If this is your first time enrolling in EFTPS®, your information will need to be validated with the IRS. After this process is complete you will receive a personal identification number (PIN) via U.S. Mail in five to seven business days at your IRS address of record.
Payments using this Web site or our voice response system must be scheduled by 8 p.m. ET the day before the due date to be received timely by the IRS. The funds will move out of your banking account on the date you select for settlement.
This EFTPS® tax payment service Web site supports Microsoft EDGE for Windows, Google Chrome for Windows and Mozilla Firefox for Windows.
You may use this Web site and our voice response system (1.800.555.3453) interchangeably to make payments.
If you are required to make deposits electronically but do not wish to use the EFTPS® tax payment service yourself, ask your financial institution about ACH Credit or same-day wire payments, or consult a tax professional or payroll provider about making payments for you. Please note: These options may result in fees from the providers. Payments through third parties may have earlier cutoff times; please check with them for their deadlines.
Revised Form 941 Worksheet 1 for Q3 2023
Credit for Qualified Sick and Family Leave Wages and the Employee Retention Credit
E-file Form 941 for the lowest price ($5.95) with ExpressEfile. E-file Now
Q3 Form 941 is Due on November 01, 2021 . E-File Now
Q3 form 941 is due on november 01, 2021 .--> <--.
The IRS has replaced worksheet 2 with worksheet 4 for the 3rd Quarter of 2021, to calculate Employee Retention Credit. ExpressEfile supports the Form 941 along with the new Worksheet 4. E-File Now
- Form 941 Worksheet 1
IRS Form 941 Worksheet 1 - Explained
Updated on October 23, 2023 - 10:30 AM by Admin, ExpressEfile
Form 941, Employer's QUARTERLY Federal Tax Return , filed by employers in the United States has seen multiple revisions this year due to the COVID-19 pandemic. The IRS initially revised Form 941 for quarter 2, 2020, to accommodate the relief measures announced by the government to overcome the pandemic. So, from quarter 2, 2020, employers must file the revised Form 941 .
To calculate the tax credits applicable for the reporting period accurately, the IRS has introduced Worksheet 1 (available on Page 20 of Form 941 instructions ). If you’re an employer who are likely to apply for the COVID-19 tax credits, you must know about Form 941 Worksheet 1 and how to use it.
This article covers the following topics:
- Why IRS Form 941 Worksheet 1?
- Who should use 941 Worksheet 1?
- How to complete Form 941 Worksheet 1?
- File Form 941 by completing Worksheet 1 through ExpressEfile
Browse By Topics
- Revised Form 941 Q2, 2021
- Revised Form 941 Q1, 2021
- Revised Form 941 Q2, 2020
- Revised Form 941 Q3, 2020
- Form 941 Instructions
- Form 941 Due Date
- Form 941 Mailing Address
- Form 941 Worksheet 4
- Form 941 Schedule B
- Form 941 Penalty
- Revised Form 941-X
1. Why IRS Form 941 Worksheet 1?
The main purpose of this worksheet is to help employers calculate their tax credits accurately and then claim it on their tax return, i.e., Form 941. The credits include:
- Nonrefundable and refundable portion of credit for qualified sick and family leave wages
- Nonrefundable and refundable portion of employee retention credit
These credits can be calculated in 3 steps by entering the required information.
You can easily complete Worksheet 1 without worrying about errors if you choose to e-file Form 941 using ExpressEfile. E-file Form 941 Now
2. Who should use 941 Worksheet 1?
Employers who claim refundable tax credits due to COVID-19 must use this worksheet.
3. How to complete Form 941 Worksheet 1?
Before proceeding to complete Worksheet 1, make sure you have all the required information. As mentioned, this worksheet contains 3 steps. Let’s see what should be done in each step.
Step 1: Determine the employer share of social security tax this quarter after it is reduced by any credit claimed on Form 8974 and any credit to be claimed on Form 5884-C and/or Form 5884-D
By completing this step, you can determine the remaining employer share of social security tax excluding the credits claimed on Form 8974 and credits to be claimed on Form 5884-C and/or 5884-D.
To do so, add Form 941, Part 1, line 5a, column 2, and Form 941, Part 1, line 5b, column 2. Then, multiply the total by 50% (0.50).
Subtract the amount with any adjustments on line 8 of Form 941, if you're a third-party sick payer, and then add the result to the amount employer share of social security tax from the Section 3121(q) Notice and Demand, if any, during the quarter. You will get the employer share of social security tax (1h) .
Add the amount from Form 941, line 11a (credit from Form 8974), and the amounts to be claimed on Form 5884-C , lines 11 and 12, for the applicable quarter to get the total nonrefundable credits already used against the employer share of social security tax (1k) .
Now, subtract line 1k from 1h to get the employer share of social security tax remaining.
Step 2: Figure the sick and family leave credit.
By completing this step, you can determine the nonrefundable and refundable portion of credit for qualified sick and family leave wages.
Calculating the credit for qualified sick leave wages
- First, determine the total qualified sick leave wages (line 2a(ii) in Worksheet 1) by adding the qualified sick leave wages reported on Form 941, Part 1, line 5a(i) column 1 and line 5c (but not included on Form 941, Part 1, line 5a(i)).
- Then, determine the employer share of Medicare tax on qualified sick leave wages (line 2c in Worksheet 1) by multiplying the total qualified sick leave wages by 1.45% (0.0145).
- Now, calculate the credit for qualified sick leave wages (line 2d in Worksheet 1) by adding total qualified sick leave wages (line 2a(ii)), qualified sick leave wages excluded from the definition of employment under section 3121(b), qualified health plan expenses allocable to qualified sick leave wages (Form 941, Part 3, line 19), and employer share of Medicare tax on qualified sick leave wages (line 2c).
Calculating the credit for qualified family leave wages
- First, determine the total qualified family leave wages (line 2e(ii) in Worksheet 1) by adding the qualified family leave wages reported on Form 941, Part 1, line 5a(ii) column 1 and line 5c (but not included on Form 941, Part 1, line 5a(ii)).
- Then, determine the employer share of Medicare tax on qualified family leave wages (line 2g in Worksheet 1) by multiplying the total qualified family leave wages by 1.45% (0.0145).
- Then, calculate the credit for qualified family leave wages (line 2h) by adding total qualified family leave wages (line 2e(ii)), qualified family leave wages excluded from the definition of employment under section 3121(b), qualified health plan expenses allocable to qualified family leave wages (Form 941, Part 3, line 20), and employer share of Medicare tax on qualified family leave wages (line 2g).
Now, calculate the credit for qualified sick and family leave wages (line 2i) by adding the credit for qualified sick leave wages (line 2d) and credit for qualified family leave wages (line 2h)
Report these credits on Form 941:
- Enter line 1l or 2i, whichever is smaller, on Form 941, Part 1, line 11b , as the nonrefundable portion of credit for qualified sick and family leave wages.
- Subtract line 2j from 2i and enter this amount on Form 941, Part 1, line 13c , as the refundable portion of credit for qualified sick and family leave wages.
Looks complex? Simply e-file Form 941 using ExpressEfile and complete the worksheet in just a few clicks. All your worksheet information will be auto-populated from your information. E-file Form 941 by completing Worksheet 1
Step 3: Figure the employee retention credit
By completing this step, you can determine the nonrefundable and refundable portion of employee retention credit.
- First, calculate the retention credit for the quarter by adding qualified wages (excluding qualified health plan expenses) for the employee retention credit (Form 941, Part 3, line 21) and qualified health plan expenses allocable to qualified wages for the employee retention credit (Form 941, Part 3, line 22), then multiplying the total by 70% (0.70).
- Now, subtract the amount of the nonrefundable portion of the credit for qualified sick and family leave wages from Step 2, line 2j from amount of the employer share of social security tax from Step 1, line 11 and enter the difference on Step 3, line 3g.
- Enter line 3d or 3g, whichever is smaller, on Form 941, Part 1, line 11c , as the nonrefundable portion of employee retention credit.
- Subtract nonrefundable portion of employee retention credit from retention credit and enter the difference on Form 941, Part 1, line 13d , as the refundable portion of employee retention credit.
Did you know? The IRS rejects many paper-filed 941 forms due to the errors in returns. Note that the IRS will reject a return with incorrect tax credits. Switch to e-filing and reduce the chances of rejection. ExpressEfile has an in-built audit check that analyzes your return against the IRS business rules. E-file Form 941 Now
If you have all the required information, you can complete this worksheet in no time. However, you may not be required to complete all steps in the worksheet. It’s completely based on how you’ve paid your employees in the reporting quarter. See below to learn what are all the steps you need to complete based on your business’s payroll:
In the reporting quarter, you have paid your employees:
- both sick and family leave wages and qualified wages under employee retention credit: You have to complete Steps 1, 2, and 3 of Worksheet 1.
- only sick and family leave wages (no qualified wages under employee retention credit): You have to complete Steps 1 and 2 of Worksheet 1.
- only qualified wages under employee retention credit (no sick and family leave wages): You have to complete Steps 1 and 3 of Worksheet 1.
4. File Form 941 by completing Worksheet 1 through ExpressEfile
As recommended by the IRS, it’s always better to e-file Form 941 for quick processing of returns. With ExpressEfile, you can e-file Form 941 in less than 5 minutes for $5.95/form only.
The in-built audit check checks your return based on the IRS business rules and decreases the chances of a form rejection.
Here’s how to file Form 941 by completing Worksheet 1 through ExpressEfile:
- Sign in to ExpressEfile and choose Form 941.
- Select the quarter you’re filing the return.
- Enter the Part 1 information and then complete Worksheet 1 in line 11b by clicking the worksheet icon. ExpressEfile will map required information from your Form 941 and calculate credits for you.
- Enter Part 2 and 3 information. Complete Schedule B (if you’re a semiweekly depositor) and Form 8974 (if you have applied small business tax credit for increasing research activities).
- Review your form and edit if necessary.
- Select the payment method for paying tax dues.
- E-sign your return by entering your Online Signature PIN or completing the Form 8453-EMP (authorizing ExpressEfile to transmit returns on your behalf).
- Transmit the return directly to the IRS.
Once your Form 941 has been processed by the IRS, you’ll receive an email with the status of your return.
File your Form 941 by completing the Worksheet 1 through ExpressEfile now for the lowest price in the industry, Only $5.95/return .
Checkout this video to know how to complete the 941 Worksheet 1.
File with confidence. It’ll take only a few minutes.