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Updated: March 13, 2023
If you’re an employer that withholds more than $1,000 in Social Security, Medicare, and federal income taxes from your employees’ wages, you’ll need to fill out and submit Form 941, the Employer’s Quarterly Federal Tax Return. This form breaks down how much you’ve withheld from your staffers’ paychecks, as well as how much you’re sending in for the employer portion of Social Security and Medicare taxes.
The form has undergone some changes in recent years. In February 2022, the IRS issued a new version of Form 941 that employers need to use beginning with Q1’s tax filings. It was revised to account for the limited availability of Covid-19 employment tax credits and instructions were updated with requirements to claim remaining credits in 2022.
Previously revised in accordance with the American Rescue Plan Act, in June 2021, the previous Form 941 had 23 new (or adjusted) lines. It included lines for the COBRA Premium Subsidy, employers who need to report both the refundable and the non-refundable portions of the employment tax credits for qualified sick and family leave wages, and reconciling payroll tax credits and deferral opportunities available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and Families First Coronavirus Response Act (FFCRA).
Above is a fillable PDF version that you can print or download.
Here’s a guide to how the revised 941 works, with instructions for completing yours, and a downloadable PDF of the new form in case you need a copy.
A 941 return is used to report payroll tax withholdings such as federal income tax plus Social Security and Medicare (typically called FICA) that are withheld from employees’ paychecks. Your Form 941 filing also reports your business’s quarterly contribution to Social Security and Medicare taxes. Keep in mind that the 941 is meant to reconcile the amounts deducted from employee paychecks and amounts due from employers, but it is separate from the semiweekly or monthly deposits you are making.
There were significant changes made to Form 941 in 2021 to allow for the reporting of new employment tax credits and other tax relief related to COVID-19, including 10 new lines, and 13 more changes.
The revised Form 941 in June 2021 included lines to report:
The revised instructions alos included a new Worksheet 1, to be used to figure the credit for qualified sick and family leave wages.
Credits for qualified paid sick and family leave wages may only be claimed for wages paid for leave taken after March 31, 2021 and before October 1, 2021. That being said, employers that pay qualified wages in 2022 for leave taken during that time period still may claim the credit.
Any qualified leave wages paid in 2022 for leave taken in the second or third quarters of 2021 are to be included in Line 5a. Lines 5ai and 5aii are to be used only for qualified leave wages paid in 2022 for leave taken after March 31, 2020 and before April 1, 2021. Lines 11b, 11d, 13c, and 13e continue to allow reporting of the non-refundable and refundable portions of the qualified paid leave credit.
Keep in mind the employee retention credit expired December 31 for recovery startup businesses and September 30 for all other eligible employers. Lines 11c, 13d, 21, and 22 – which had been used to report amounts pertaining to the employee credit retention, are now labeled: “Reserved for future use.” Lines 13 h and 13i – previously in reference to 7200 advances – are also now labeled “Reserved for future use” as employers in 2022 cannot receive advance payments.
Worksheets 2 and 4 have been removed – they had allowed employers to calculate the employee retention credit. Worksheets for calculating the credit for qualified leave wages and the COBRA premium assistance credit have new numbers.
The revised 941 form released in February 2022 may only be used for the first quarter of 2022. If you need it, there’s a version linked here. Earlier versions of the form must not be used for 2022 reporting.
In June 2022, the IRS released a revised version of Form 941 (and instructions for completing it) to reflect the end of the COBRA premium assistance credit, which generally expired on September 30, 2021. Line 11e which previously was used to report the nonrefundable portion of the credit, and line 11f, which was used to report the number of individuals receiving assistance, are both now labeled “Reserved for future use.” Additionally, line 13f, which reported the nonrefundable portion of the credit is now labeled “Reserved for Future use” as part of the June revisions.
Line 11g (which is used to report the total number of nonrefundable credits) was updated, and a reference to Line 11e was removed. Also, Line 13g was changed in the same way, and a previous reference to Line 13f was removed from the sheet.
Also, Worksheet 3, which employers used to calculate the COBRA premium assistance, is no longer included in the form instructions. However, worksheets 1 and 2 are still part of the form and should continue to be used to calculate the credits for qualified leave wages, which still may be claimed for wages paid in 2022 for leave taken after March 31, 2020 and before October 1, 2021.
Moving forward, the IRS expects employers to use the version of Form 941, released in June 2022, to report the second, third, and fourth quarters of 2022. The instructions provided in this resource are for the June 2022 version of Form 941.
The deadline for filing your 941 is the last day of the month that follows the end of each quarter: April 30, July 31, October 31, and January 31. As a business owner, once you file a 941 the first time, you must file the form quarterly going forward, even if you have no taxes to report. If your business closes, you must also file a final return for the year the business closed.
The second quarter Form 941 and its schedules, when applicable, are due July 31 (or August 10, if all tax deposits were submitted in a timely manner for the second quarter). The following table will help you visualize the deadlines to:
|Quarter includes the months below||Quarter end date||Form 941 is due on the date below|
|January, February, March||March 31||April 30|
|April, May, June||June 30||July 31|
|July, August September||September 30||October 31|
|October, November, December||December 31||January 31|
Based on how much you’ve withheld for taxes, your company will be a monthly or semiweekly depositor, and all payments must be made through the Electronic Federal Tax Payment System. If your taxes due are less than $2,500, you can pay them when filing the return, but if your tax liability for the quarter is more than $2,500, you will be asked to make a monthly or semiweekly deposit.
Depending on how much tax you pay, you may need to file either a 941 or Form 944. For example, if you expect to have tax liability less than $1,000 annually, you may be able to file a simpler 944. If you are a new business owner, you’ll be advised on what form to file when you receive your Employer Identification Number (EIN). If you want to dive a little deeper, we’ve also got an overview of how Form 944 works as well as instructions to complete it.
You’ll need to gather the following information:
The IRS released the final instructions for the updated Form 941 in June of 2022, ahead of the second quarter’s end.
There are five parts that need to be completed on Revised Form 941:
The instructions include a worksheet (Worksheet 1) to help with the calculations. Only certain steps of the worksheet need to be completed depending on what type of qualified wages your business paid during the quarter:
Read on for a line-by-line explanation of all the details and calculations that are included in the Revised Form 941.
13b. Reserved for future use — there’s nothing to add to this line
13c. Refundable portion of credit for qualified sick and family leave leave taken before April 1, 2021: Enter the refundable portion of the credit from Worksheet 1, Step 2, line 2k for wages paid for qualified sick and family leave taken before April 1, 2021. The credit for qualified sick and family leave wages consists of the qualified sick leave wages, the qualified family leave wages, the allocatable qualified health plan expenses, and the employer share of Medicare tax allocatable to those wages. The refundable portion of the credit is allowed after the employer share of social security tax is reduced to zero by nonrefundable credits.
13d. Reserved for future use — don’t add anything to this line
13e. Refundable portion of credit for qualified sick and family leave leave taken from March 31 – October 1, 2021: Enter the refundable portion of the credit from Worksheet 1, Step 2, line 2k for wages paid for qualified sick and family leave taken after March 31, 2021, and before October 1, 2021. The credit for qualified sick and family leave wages consists of the qualified sick leave wages, the qualified family leave wages, the allocatable qualified health plan expenses, and the employer share of Medicare tax allocatable to those wages. The refundable portion of the credit is allowed after the employer share of social security tax is reduced to zero by nonrefundable credits.
13f. Reserved for future use
13g. Total deposits and refundable credits. Add lines 13a, 13c, and 13e.
13h. Reserved for future use — this line stays empty
13i. Reserved for future use — nothing to add here
Note: There are no changes to Part 2 of the revised Form 941 (Revised June, 2022, so there are no changes in the instructions for this section.
Based on how much you’ve withheld for taxes, your company will be a monthly or semiweekly depositor, and all payments must be made through the Electronic Federal Tax Payment System. If your taxes due are less than $2,500, you can pay them with the return, but if your tax liability for the quarter is more than $2,500, you will be asked to make a monthly or semiweekly deposit.
Important: You will use lines 19 and 20 only for paid leave taken before April 1, 2021.
Important: You will use lines 23 and 26 only for paid leave taken after March 31, 2021.
OnPay helps us to streamline our small law firm’s payroll process, saving us time dealing with administrative tasks so we can stayed focused on our clients. Payroll with direct deposit is simple, takes only a few minutes, and OnPay handles our 940 and 941 filings with ease. It used to take time away from our practice to manually handle our tax filings and payroll, but it’s now painless.
— Benjamin Sperry, Bruce J Sperry, PA
Part 4 is used if you want to designate an employee or paid preparer or service to talk with the IRS about Form 941. If you elect yes, you will need to provide the designee’s name and phone number, as well as create a 5-digit PIN to use when talking to the IRS. The authorization will automatically expire one (1) year from the due date (without regard to extensions) for filing your Form 941.
Complete all information and sign and date the Form 941 — and you’re all set. Note that approved signers for Form 941 include the Sole Proprietor, Corporation President, Vice President, or Principal Officer, Partnership Member or Partner, Owner of an LLC, or Fiduciary of a Trust or Estate.
Be sure to review your return for accuracy and send deposits on or before the due dates. If you use a payroll service provider, your 941 may be completed for your business, so be sure to check on what will be provided to you and to the IRS.
If you have any questions or need additional Form 941 (Revised June 2021) instructions, you can find help on the IRS website.
This article has been updated with the most up-to-date information available. This article is for informational purposes only and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors for formal consultation.