Form 941: Employer’s Quarterly Federal Tax Return Definition

What is IRS Form 941: Employer’s Quarterly Federal Tax Return?

Generally speaking, employers must electronically pay withholding employment taxes to the Internal Revenue Service (IRS) every month or every half week. This includes federal income tax withholding, as well as social security and health insurance taxes for employers and employees. Then, once a quarter, the employer reports these payments on Form 941, the employer’s quarterly federal tax return.

How to file Form 941: Employer’s Quarterly Federal Tax Return

Form 941 is six pages and consists of five parts. At the top of page 1, the employer provides the name (including the business name used), address, and employer identification number (EIN). In addition, the employer indicated that the submission deadline:

  • The first quarter (January, February, March)
  • The second quarter (April, May, June)
  • The third quarter (July, August, September)
  • Fourth quarter (October, November, December)

first part

The first part is where the employer reports the number of employees hired, their salaries and taxes owed. This section also shows whether the employer owes taxes (balance due) or overpays employment taxes. Any overpayment can be used for the next quarter or received as a refund. Indicate the selection by checking the corresponding box on line 15.

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the second part

The second part starts from the middle of the second page and explains the tax deposit plan for employment tax. Most employers’ savings plans are monthly or semi-weekly. If you deposit monthly, enter the monthly tax liability details here. Employers pay taxes every half week and explain their tax obligations on deposits in Schedule B. Taxes over USD 100,000 require a deposit on the next day. Taxes less than $2,500 can be paid using this form without depositing.

the third part

In the third part, the employer must answer two questions: whether the company closes or stops paying wages (and the date it occurs), and whether the company is a seasonal employer (so there is no need to submit a quarterly return).

Fourth and fifth part

In the fourth part, employers are asked whether they will authorize employees, paying tax preparers, or other third parties (such as certified public accountants (CPA)) to talk to the IRS about tax returns. If so, the employer must provide the designated person’s name, phone number, and five-digit personal identification number of their choice so that the IRS can confirm the person’s identity.

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In the fifth part, the employer signs, date, and provides the phone number during the day.

If the employer uses a paid compiler to fill out the form, the compiler must enter their information in Section 5. This includes the name, tax filer’s tax identification number (PTIN), company name, tax filer or company’s EIN, address and phone number.

If the employer owes employment taxes for the quarter, the payment can be submitted with Form 941. Use Form 941-V: The payment voucher will help the IRS process the payment correctly.

Form 941 is available on the IRS website.

Tax reported on Form 941: Employer’s quarterly federal tax return

As mentioned earlier, the first part is the employer’s report on the amount of taxes paid for wages, tips, and other compensation. There are four types of taxes:

  1. Federal taxes withheld from employee wages (line 3).
  2. Social security tax (lines 5a and 5b). The tax rate is 12.4%, covering employees and employers’ shares.
  3. Medicare tax (line 5c). The tax rate is 2.9%, covering the employer and employee’s share.
  4. Additional Medicare taxes in excess of $200,000 (line 5d). The tax rate is 0.9%, which is paid separately by employees.
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Special considerations when submitting Form 941

For small employers

If approved by the U.S. Internal Revenue Service, employers who owed employment taxes that year did not exceed $1,000 can submit Form 944, the employer’s annual federal tax return. Call 800-829-4933 or send a written request, because you must obtain permission before submitting this form instead of Form 941.

Revised form

If you need to correct Form 941, please use Form 941-X, adjusted employer quarterly tax return or refund request. For example, if the salary is underestimated or the social security tax for tips is overestimated, and you find an error, use this form to correct it.

Bottom line

Employment tax is a major responsibility. Learn more about the fees paid to employees and how to calculate employment taxes in IRS Publications 15 (Circular E) and 15-B.

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