Image of Form 941 Boxes 2023

As an employer, you must withhold federal income, social security, and Medicare taxes from each worker's earnings.

This withheld tax data must be submitted to the IRS using Federal Tax Form 941 each quarter.

What is the Purpose of IRS Form 941?

IRS Form 941 functions as an Employer's Quarterly Tax Return. This form is utilized by employers to report the federal income tax, social security tax, and Medicare tax (collectively known as FICA taxes) that have been withheld from each worker's pay. Additionally, this form allows employers to compute their own Social Security and Medicare tax obligations, along with any extra taxes withheld.

Correct filing of Form 941 is critical. The IRS cross-checks the amounts on your Form 941 against your yearly Form W-3.

Who is Required to File Form 941 Quarterly for the 2023 & 2024 Tax Years?

All employers or business proprietors paying wages to workers are obliged to file the IRS Tax Form 941 every quarter.

However, there are certain exceptions. You are exempted from filing Form 941 if you are a:

  • Seasonal business employer,
  • Employer of household staff,
  • Employer of agricultural workers.

If you, for instance, have been directed to file Form 944 instead of Form 941, you should file Form 944 annually and refrain from filing Form 941 every quarter.

What are the Changes to Form 941 in the First Quarter of 2024?

There are several updates to note for the 2024 Q1 Form 941. Firstly, the IRS has revised Form 8974, designed for Qualified Small Business Payroll Tax Credit for Increasing Research Activities. This enables small businesses to claim a tax credit of up to $250,000.

There's a modification in Line 12 of Form 8974, which now refers to the Credit against the employer part of the social security tax, replacing the earlier term "Credit." Also, Lines 13-17 are newly added to the form for the initial quarter of 2024. For the first quarter of 2024, the IRS has reintroduced Worksheet 2 and altered the first step of Worksheet 1.

One should also be aware that the social security wage base limit has been updated to $160,200 for the tax year 2023. Forms 941-PR and 941-SS are anticipated to be phased out after the 2023 tax year.

What is the Significance of IRS Form 941 Schedule B?

Schedule B of Form 941 is a record of daily tax liabilities for the employer, detailing federal income tax withheld from employees and submitted along with Form 941. It also indicates the employer's share of withheld Social Security and Medicare taxes during the reporting period.

For tax year 2023, semi-weekly scheduled depositors utilize the IRS Form 941 Schedule B with employment taxes exceeding $50,000. Moreover, businesses that amass over $100,000 in liabilities in a single day throughout the tax year are also required to start filing this Schedule.

What Role Do the 941 Worksheets Play and How Were They Updated for the Q3 & Q4 of 2021?

The Form 941 Worksheets are tools designed to aid employers in determining the refundable and nonrefundable portions of sick and family leave and employee retention credits. In prior quarters, the 941 Worksheet 1 was utilized to compute these credits but was revised after the second quarter of 2021 and divided into five separate Worksheets.

The third step of Worksheet 1 has been segregated into a separate worksheet. The Q2 of 2021's Worksheet 2 was employed to determine the refundable and nonrefundable segments of the employee retention credit for the second quarter. However, starting from the third and fourth quarters, employers should use Form 941 Worksheet 4 to determine the employee retention credit.

Insights into the Form 941 for 2023 & 2024 Tax Years

Data Required on Form 941

When submitting the IRS 941 Quarterly Report as an employer, the following data should be provided:

  • Identified Quarter of Form 941 Submission
  • Business Specifics, including
    • Name, EIN, and Address of the Business
  • Details about Employment
    • Employee Count
    • Social Security and Medicare Taxes
    • IRS Deposits
    • Schedule and Liability for Deposits
    • Information about the Signatory Authority
    • Online Signature PIN or Form 8453-EMP

It's crucial to note that you cannot delay all the tax payments for the quarter until the 941 filing deadline. Based on the amount owed, taxes should be deposited monthly or semi-weekly.

Information that Should Not be Reported on the 941 Tax Form

The revised Form 941 is meant to document tax deductions from employee wages. Nonpayroll withholding information should not be reported on Form 941. This covers backup withholding for employees and income tax withholdings for:

  • Pension schemes
  • Annuities
  • Gambling earnings

Form 945 should be utilized to report withholdings from pension plans, annuities, and gambling earnings.

When is the Deadline for Form 941 Submission?

The deadline for your 941 quarterly Form is the last day of the month immediately following the quarter's conclusion:

  • April 30th for the First quarter (January through March)
  • July 31st for the Second quarter (April through June)
  • October 31st for the Third quarter (July through September)
  • January 31st for the Fourth quarter (October through December)

If the deadline is on a federal holiday, the filing deadline is the following business day.

Provided your taxes have been paid in full and punctually, the deadline is extended to the 10th day of the second month after the quarter's end.

For more information about official IRS deadlines, check out our complete form deadlines.

Form 941 Submission Procedures for 2023 & 2024 Tax Years

The conventional paper filing Form 941 can be more time-consuming and labor-intensive. It involves hidden expenses such as printing, envelopes, and postal mailing fees. Keeping track of your Form 941's filing status can be a challenge for employers, as they may be unsure about the IRS's acceptance of the return.

Electronically filing Form 941 for 2024 is the simplest method and the one favored by the IRS. Employers can immediately receive their IRS filing status and complete the filing process in under 5 minutes. This method saves employers time and facilitates an easy balance due payment.