941 Employer's Quarterly Federal Tax

Return Instructions
Employers who pay wages to employees are required to prepare and file Internal Revenue
Service Form 941 on a quarterly basis. Form 941 is due on the last day of the month immediately
following the prior calendar quarter. Federal tax deposits made by mail or via EFTPS, the
IRS’s electronic payment system, are reflected on Form 941 and any balance due is
remitted with the return. Employer credits exist for advanced earned income payments and
COBRA assistance.
Step 1
Complete the business identifying information on the top of the form, including Employer
Identification Number, business name and address. Check the box for the applicable calendar
quarter.
Step 2
Enter the number of employees who received wages during the quarter in Box 1. This includes
full-time and part-time employees as well as employees who began or ended employment during
the quarter. Record the total wages paid to employees during the calendar quarter in Box 2 and
the respective federal withholding taxes in Box 3.
Step 3
Report wages subject to Social Security tax, tips subject to Social Security tax and wages subject
to medicare tax in Boxes 5a, 5b and 5c,. It is important to remember that wages up to $106,800
are subject to Social Security tax. Multiply each line by the rate provided to calculate the total
employer and employee portion of each tax.
Step 4
Calculate the total of column 2 for Boxes 5a, 5b and 5c and enter in Box 5d.
Step 5
Determine if you have employees qualified to be exempt from the employer’s
portion of social security tax. A qualified employee is one who has not been employed for more
than 40 hours in the prior 60 days, was hired between Feb. 3, 2010 and Jan. 11, 2011 and is not
related to you.
Step 6

Enter the number of qualified employees first paid wages during the calendar quarter in Box 6a,
the total number of qualified employees paid any wages during the calendar quarter in Box 6b,
total wages for the exempt employees in Box 6c. Calculate the employer portion of Social
Security tax by multiplying Box 6c by the rate of 0.062 and enter the total in Box 6d.
Step 7
Calculate the total taxes before adjustments by adding Box 3 and Box 5 and subtracting Bbox 6d.
Enter the result in Box 6e.
Step 8
Record adjustments for fractions of cents, sick pay and tips and group-term life insurance in
Boxes 7a through 7c. Rounding adjustments are included in Box 7a. Enter negative adjustments
with a minus sign instead of parentheses. Combine Lines 63 through 7c to calculate total taxes
after adjustments and record in Box 8.
Step 9
Record advanced earned income payments made to employees in Box 9. Subtract Box 9 from
Box 8 and record the total in Box 10. Enter total tax deposits made for the quarter in Box 11. If
you are able to take a credit for COBRA assistance payments, record the adjustment in Box 12a
and the number of employees receiving assistance in Box 12b.
Step 10
Add Boxes 11 and 12a and enter in Box 13. If Box 10 is more than Box 13, a balance is due with
Form 941. If Box 13 is less than Box 10, an overpayment exists and you can elect to receive a
refund or a credit for the next quarter. Sign and date Form 941 on Page 2 before mailing to the
appropriate Internal Revenue Service Center per the form instructions.