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Form 941: How Employers Report Federal Payroll and Income Tax
October 09, 2024
An up-close review of how to complete and file Form 941, including when it’s due and why it’s essential.
- Reviewed by Paylocity's Compliance & Government Relations Team
What is Form 941?
Form 941 is a quarterly report that gives the Internal Revenue Service (IRS) a snapshot of an employer’s payroll tax liabilities and payments. The 941 tax form shows how much has been withheld from each employee’s wages to pay their income and Federal Insurance Contributions Act (FICA) taxes and how much the employer owes.
What is FICA Tax?
FICA is the collective term for the federal Medicare and Social Security taxes employees and employers owe every pay period. Also known as Old Age, Survivors, and Disability Insurance (OASDI), these taxes fund Medicare and Social Security benefits for employees who are 62 or older.
The 2024 FICA tax rate is 15.3% of each employee’s gross pay until their annual salary or wages reach the wage base limit set by the IRS ($176,100 for 2025). If an employee earns over $200,000 annually, however, they’ll also owe an Additional Medicare Tax of 0.9% on the income that exceeds $200,000.
Unlike unemployment and income taxes, FICA taxes are split evenly between employees and employers. So, each pay period, an employee only owes 7.65% of their wages in FICA taxes while their employer pays the other 7.65%.
Key Takeaways
- The federal 941 form tracks how much employees and employers owe in FICA taxes and whether an employee’s income for that year has reached the annual wage base limit.
- Most employers who withhold FICA taxes from employee wages must file the quarterly 941 form.
- Employers can file Form 941 electronically or via mail but must do so by the final day of the month following the end of the quarter.
Who Must File a 941 Form?
Generally, any employer who withholds FICA taxes from employee wages must file federal Form 941 every quarter, even if they paid no wages or owed no FICA taxes that particular quarter. There are, however, a few exceptions:
|
Employer Type |
Details |
Tax Form/Exemption |
|
Household |
Employ household workers (e.g., maids or nannies) |
|
|
Agricultural |
Employ farmworkers |
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Seasonal |
Employ workers only for a specific period |
Only file Form 941 for quarters in which employees received wages. |
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Small |
Annual payroll is less than $1,000 |
What is Form 941-X?
Form 941-X (Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund Form) is used to correct a previously filed Form 941 that contained errors, such as misreported wages or tips. It may also, however, be used to retroactively claim certain tax credits (e.g., CARES Act Employee Retention Credits).
How to Complete Form 941
When preparing to file tax form 941, there are a few pieces of information each employer will need to have, including:
- Employee and payroll data (e.g., headcount of paid workers and the wages they earned)
- Amount owed in FICA taxes that quarter
- Amount of FICA tax withheld from employee wages that quarter
- Records of the FICA tax deposits that quarter
2024 Form 941 Instructions
Employers must first enter basic information about their organization, such as its legal name, address, and Employer Identification Number (EIN), and indicate which quarter the form is reporting for.
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Line |
Description |
|
|
Part 1 |
1 |
The total number of employees who received wages, tips, or other forms of compensation during the quarter. Only include employees who were paid during the reporting period. |
|
2 |
The total wages, tips, and other forms of compensation paid to employees for the quarter. |
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3 |
The total amount of federal income taxes withheld from employee wages during the quarter, including any for taxable fringe benefits or supplemental unemployment benefits. |
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4 |
Only for employers who paid FICA-exempt wages or compensation. Such employers should check this box and skip to Line 6 below, while all other employers should leave the box blank and proceed to Line 5a. |
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5a* |
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5b* |
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5c |
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5d |
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5e |
The sum of adding each Column 2 amount together from Lines 5a – 5d. |
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5f |
Record the taxes owed for previously under or unreported tips employees received (if any). This amount will be identified in a Section 3121(q) Notice and Demand from the IRS. |
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6 |
The total amount of pre-adjustment FICA taxes owed based on adding Lines 3, 5e, and 5f together. |
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7 |
How much was over or underpaid in FICA taxes that quarter due to payroll calculations rounding to the nearest cent on each paycheck. |
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8 |
The total amount of FICA taxes a third-party sick pay company withheld and deposited from the sick pay employees received that quarter. |
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9 |
How much employees owe in uncollected FICA taxes for tips and group-term life insurance. |
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10 |
The total amount of adjusted FICA taxes owed based on adding Lines 6 – 9 together. |
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11 |
How much is being claimed in research and development tax credits, as determined by completing (and attaching) Form 8974. |
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12 |
The total amount of FICA taxes owed based on subtracting Line 11 from Line 10. |
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13 |
The total amount of FICA tax deposits made that quarter, including any overpayments from prior quarters. |
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14 |
The amount (if any) still due in FICA taxes for the quarter based on the Line 12 total being larger than the Line 13 total. |
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15 |
The amount (if any) overpaid in FICA taxes for the quarter based on the Line 13 total being larger than the Line 12 total. This amount can be refunded or applied to a future FICA tax return. |
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Part 2 |
16 |
Identifies the employer’s tax deposit schedule based on prior quarterly tax returns and owed FICA tax amounts.
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Part 3 |
17 |
Indicates if an employer closed or stopped paying employee wages and records the final date wages were paid. |
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18 |
Identifies seasonal employers who don’t file a 941 form every quarter. |
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Part 4 |
N/A |
Grants the IRS permission to speak with a designated third party (e.g., an employee, CPA, etc.) regarding the information on the form and provides the designee’s contact information. |
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Part 5 |
N/A |
Records the employer’s signature, name, phone number, etc., and information on any third-party preparer that completed the form on the employer’s behalf. |
*Don’t include excess wages or tips.
Where to File 941 Forms
Employers can submit their 941 form via mail, file it online from the IRS’ employment tax forms page, or use an IRS-approved modernized e-file (MeF) provider.
Determining where to send 941 forms by mail can be trickier, as the correct Form 941 mailing address varies depending on the employer’s location and intent (i.e., mailing with or without a payment).
941 Form 2024 Due Dates
Form 941 submissions must be made by the final day of the month directly following the end of a quarter. If a due date falls on a weekend or federal holiday, submissions may be made by the next business day.
- Q1 (Jan. Feb, Mar): April 30, 2024
- Q2 (Apr, May, June): July 31, 2024
- Q3 (July, Aug, Sept): October 31, 2024
- Q4 (Oct, Nov, Dec): January 31, 2025
Is there a Penalty for Filing Form 941 Late?
If Form 941 isn’t filed on time, employers will face a Failure-to-File penalty of 5% of the unpaid tax for each full or partial month the form is late. The maximum penalty is generally 25% of the owed tax.
Get Taxes Done Right, Without the Stress
We know there's a lot that goes into preparing and filing payroll tax forms. Save time and get support from our expert team. As a Registered Reporting Agent with the IRS, we can help prepare and file all the necessary forms you need to remain compliant - even in the face of changing legislation. Learn more here.
