Form 941

What is Form 941? 

Form 941 is a form from the Internal Revenue Service (IRS). It is also called the “Employer’s Quarterly Federal Tax Return”. 

According to federal law, employers are required to pay their employees and withhold specific taxes from paychecks. These details are reported to the Internal Revenue Service (IRS) via Form 941 which is filed quarterly. 

What is the purpose of filing Form 941?

Form 941 is fundamentally a quarterly report that is submitted to the IRS. The following information is indicated in Form 941:

• Federal income taxes that were taken from the employees’ wages
• Number of employees
• Medicare and Social Security taxes withheld from employees’ wages
• Any Additional Medicare Tax that is taken from the wages paid to employees over $200,000 in a calendar year
• Employer’s share of Social Security and Medicare taxes
• Any tax credits for participation in COVID-19 related tax relief program

Aside from reporting the withholding information of employers, Form 941 can also be used to calculate payroll tax liability and adjust amounts due. 

Keep in mind that Form 941 is not to be used for reporting unemployment taxes or income tax withholding on non payroll payments like pensions and annuities. 

I am a business owner. Must I file Form 941?

If you are a business owner and you pay wages to your employees that are subject to federal income tax, Social Security, and Medicare taxes, then yes. You must file Form 941 quarterly. 

Where can you get Form 941? 

Employers can download Form 941 from the Internal Revenue Service (IRS) website. It is possible to fill it out electronically on the website or download it for printing. 

Are there any exceptions to filing Form 941? 

Some employers do not need to file Form 941. If you are an employer, you do not have to use Form 941 if:

• You have been notified to file Form 944 yearly. 
• You are an employer of household employees. If you must pay for Social Security and Medicare taxes or federal unemployment taxes, or if you withhold income tax, you can use Schedule H (Form 1040) (Household Employment Taxes).
• You are an employer of farm employees. To report wages for and taxes for farm employees, Form 943 (Employer’s Annual Tax Return for Agricultural Employees) is used instead. 
• If you are a seasonal employer, you only file Form 941 for quarters in which you paid wages. You do not have to file Form 941 for quarters where no wages were paid to employees. 

I am a business owner. When should I file Form 941? 

Form 941 is filed quarterly. When is it due? Remember that the deadline is the last day of the month following the end of the quarter. 

• First Quarter: January through March
  • Due date: April 30
• Second Quarter: April through June
  • Due date: July 31
• Third Quarter: July through September
  • Due date: October 31
• Fourth Quarter: October through December
  • Due date: January 31 

If the due date for filing falls on a weekend or a legal holiday, it is all right to file before the end of the next business day. This will still be considered timely filing. 

How can I file Form 941? 

Employers have two options to choose from that they can file Form 941. The first way is by mail. Before sending, be sure to check the IRS website for the list of addresses for each state. It will also give you the address to use if you are sending a payment together with Form 941. 

Another option to filing Form 941 is to e-file. If you want to submit Form 941 yourself,  you can either use an authorized IRS e-file provider or buy an IRS-approved software to file electronically. You may do this or have a tax professional file Form 941 for you. 

What are some tips to avoid penalties and interest? 

There are penalties and interest that may be charged for late payment of taxes and late filing of returns. Here are some tips for employers to avoid penalties and interest:

• Deposit and pay your tax when it is required. 
• Fill out Form 941 accurately and completely.
• File your Form 941 on time.
• Tax liabilities should be reported accurately. 
• If you will submit checks for tax payments, make sure that the checks are valid. 
• Make sure that the W-2 Forms of employees are accurate. 

If the IRS sends you a notice about a penalty after filing Form 941, be sure to reply to the IRS notice explaining your situation. The IRS can evaluate and see if this meets the reasonable-cause criteria. Do not attach an explanation letter when filing your Form 941.