IRS Form 941 Instructions for 2023 - Line by Line
Updated on August 30, 2023 - 10:30 AM by Admin, TaxBandits
If you are an employer, you likely need to fill out and file IRS Form 941 for each quarter. To avoid major mistakes, learn the Form 941 instructions for 2023 and how to fill out line by line.
Table of Contents:
1. Complete Business Information
First, complete your basic details in
Box 1 - Entering Employer Details
In box 1, enter the EIN, name, business name, and address.
Box 2 - Choosing Quarter
In box 2, choose a quarter for which Tax Form 941 is being filed.
For example, if you are filing the Form for the first quarter of 2022 & 2023 tax year, put an “X” in the box next to “January, February, March.”
2. Part 1 - Questions for the quarter
Part 1 reports the employees, their wages, and the federal income taxes withheld from their paycheck.
Part 1 consists of 15 lines where each line is explained in detail with the information that must be entered.
Enter the number of employees, who got wages, tips, or other pay in the particular quarter
Enter the complete wages, tips, paid and other pay to your employees
Enter the federal income tax withheld from the employee’s paycheck
Check this box if wages are not subject to social security and medicare tax. And if it doesn't apply, please skip this line
Line 5a* - Taxable Social Security Wages
(*Include qualified sick and family leave wages taken after March 31, 2021)Line 5a = Column 1 x 0.124 = Column 2
Line 5a (i)* - Qualified sick leave wages
(*Only include wages paid after March 31, 2020, for leave taken before April 1, 2021)Line 5a (i) = Column 1 x 0.062 = Column 2
Line 5a (ii)* - Qualified family leave wages
(*Only include wages paid after March 31, 2020, for leave taken before April 1, 2021)Line 5a (ii) = Column 1 x 0.062 = Column 2
Line 5b - Taxable social security tips
Enter the tips reported for all your employees during the quarterLine 5b = Column 1 x 0.124 = Column 2
Line 5c - Taxable Medicare wages & tips
Enter the wages, tips, that are subject to medicare taxLine 5c = Column 1 x 0.029 = Column 2
Line 5d - Taxable wages & tips subject to Additional Medicare Tax withholding
Enter all the taxable wages & tips subject to Additional Medicare Tax withholdingLine 5d = Column 1 x 0.009 = Column 2
Line 5e - Total social security and Medicare taxes
Sum of Column 2 from Lines 5a, 5a(i), 5a(ii) 5b, 5c and 5d.
Line 5f - Section 3121(q) Notice and Demand—Tax due on unreported tips
Enter the tax due that you have received from the Section 3121(q) Notice and Demand
The IRS issues Section 3121(q) Notice and Demand to employers advising them to report tips that their employees have failed to report. Employers aren’t liable for their share of social security and medicare taxes unless the employer receives this notice.
Line 6 - Total taxes before adjustments
Enter the sum of line 3, 5e, and 5f
Line 7 to 9 - Tax Adjustments
Enter the Adjustment for a fraction of cents (Line 7), sick pay (Line 8), tips and group life insurance (Line 9)
Line 10 - Total taxes after adjustments
Enter the sum of line 6 to line 9
Line 11a - Qualified small business payroll tax credit for increasing research activities
Enter the amount calculated in Form 8974 and attach.
Form 8974 is used to determine the amount of credit that can be claimed for the increasing research activities.
Line 11b - Nonrefundable portion of credit for qualified sick and family leave wages for leave taken before April 1, 2021
Enter the amount from Worksheet 1, step 2, line 2j.
Line 11c - Nonrefundable portion of the employee retention creditNote: Reserved for future use
Line 11d - Nonrefundable portion of credit for qualified sick and family leave wages for leave taken after March 31, 2021
Enter the amount from Worksheet 3, step 2, line 2r.
Line 11e - Nonrefundable Portion of COBRA Premium Assistance CreditNote: Reserved for future use
Line 11f - Number of Individuals Provided COBRA Premium AssistanceNote: Reserved for future use
Line 11g - Total nonrefundable credits
Add the amounts from lines 11a, 11b, 11c, 11d.
Line 12 - Total taxes after adjustments and nonrefundable credits
To get this amount, subtract line 11g from line 10, the amount on line 12 can’t be less than zero.
Line 13a - Total deposits for this quarter, including overpayment applied from a prior quarter and overpayments applied from Form 941-X, 941-X (PR), 944-X, or 944-X (SP) filed in the current quarter
Line 13b - Reserved for future use
This was previously used for entering deferred amount of social security tax. Now it is reserved for future use.
Line 13c - Refundable portion of credit for qualified sick and family leave wages for leave taken before April 1, 2021
Enter the amount from Worksheet 1, step 2, line 2k.
Line 13d - Refundable Portion of Employee Retention CreditNote: Reserved for future use
Line 13e - Refundable Portion of Credit for Qualified Sick and Family Leave Wages for Leave Taken After March 31, 2021
Enter the amount from Worksheet 3, step 2, line 2s.
Line 13f - Refundable Portion of COBRA Premium Assistance CreditNote: Reserved for future use
Line 13g - Total Deposits and Refundable Credits
To get the total, add lines 13a, 13c, 13d, 13e.
Line 13h - Total Advances Received From Filing Form(s) 7200 for the QuarterNote: Reserved for future use
Line 13i - Total Deposits and Refundable Credits Less AdvancesNote: Reserved for future use
Line 14 - Balance due
If the amount you entered in line 12 is more than the amount entered on line 13i, enter the difference here.
- You can make federal tax deposits for the amount shown on line 14 using EFW.
- If you are a monthly schedule depositor and making a payment for the amount shown on Line 14, you can pay by EFW, EFT, Credit or debit card, check, money order.
- File Form 941-V, if you prefer to pay the balance due using check or money order.
- If you were unable to pay the balance due in full you can apply for an installment agreement online. To apply using the Online Payment Agreement Application, please visit IRS.gov/OPA.
Line 15 - Overpayment
Enter the difference, if line 13g is more than line 12. Choose either box, Apply to next return or send a refund as you prefer
If you deposited more than the correct amount for the quarter, you can either choose to get the refund for the overpayment or apply it to your next 941 return.
3. Form 941 Part 2 - Deposit schedule and tax liability for the quarter
Part 2 requires information about tax liability for the quarter, whether you are a semiweekly or monthly depositor.
Line 16 , you have options to check any one of the boxes based on your tax liability.
Check box 1, If Line 12
- On your Form 941 was less than $2,500
- On your previous quarterly return was less than $2,500
- You didn’t incur a $100,000 next-day deposit obligation during the current quarter
Check box 2, If you were
A monthly schedule depositor for the entire quarter, and enter your tax liability for each month of the quarter (Month 1, Month 2, and Month 3).
Your total liability for the quarter must be equal to line 12 on your tax form 941.
Check box 3, If you were
A semiweekly depositor during any part of the quarter.
You must also enter the tax liability on Schedule B (Form 941), Report of Tax Liability for Semiweekly Schedule Depositors, and attach it along the Form 941 if you were a semiweekly depositor.
4. Form 941 Part 3 - About your business
The third portion of the 2023 IRS Form 941 collects information that will not be relevant to every business, for example if the business is closing or is a seasonal employer. If the question does not apply to the business you are filing for, leave the field blank.
Line 17 - If your business has closed or you stopped paying wages
If your business was closed or you stopped paying wages in the quarter, check on line 17 and enter the final date when you paid wages.
Line 18a - If you are a seasonal employer and you don’t have to file a return for every quarter of the year
If you are a seasonal employer and don’t have to file Form 941 every quarter, then check the box under line 18.
Line 19 - Qualified health plan expenses allocable to qualified sick leave wages for leave taken before April 1, 2021
Enter the amount on Worksheet 1, step 2, line 2b.
Line 20 - Qualified Health Plan Expenses Allocable to Qualified Family Leave Wages for Leave Taken Before April 1, 2021
Enter the amount from Worksheet 1, step 2, line 2f.
Line 21 - Qualified Wages for the Employee Retention CreditNote: Reserved for future use
Line 22 - Qualified Health Plan Expenses for the Employee Retention CreditNote: Reserved for future use
Line 23 - Qualified Sick Leave Wages for Leave Taken After March 31, 2021
Enter the amount from Worksheet 3, step 2, line 2a.
Line 24 - Qualified Health Plan Expenses Allocable to Qualified Sick Leave Wages Reported
on Line 23
Enter the amount from Worksheet 3, step 2, line 2a.
Line 25 - Amounts Under Certain Collectively Bargained Agreements Allocable to Qualified Sick Leave Wages Reported on Line 23 Enter the collectively bargained defined benefit pension
Enter the amount from Worksheet 2, step 2, line 2c.
Line 26 - Qualified Family Leave Wages for Leave Taken After March 31, 2021
Enter the amount from Worksheet 3, step 2, line 2g.
Line 27 - Qualified Health Plan Expenses Allocable to Qualified Family Leave Wages Reported on Line 26
Enter the amount from Worksheet 3, step 2, line 2h.
Line 28 - Amounts Under Certain Collectively Bargained Agreements Allocable to Qualified Family Leave Wages Reported on Line 26
Enter the amounts from Worksheet 3, step 2, line 2i.
If lines 17 and 18 don’t apply to your business, then just leave Part 3 blank and move on to Part 4.
5. Form 941 Part 4 - Third-party designee
Part 4 requires information about the third party designee that the employer authorizes to discuss with the IRS.
Check “Yes”, If you wish to discuss this return with the IRS and provide the designee name and phone number. Also, enter the 5 digit pin to use while talking with the IRS.
Check “No”, if you don’t wish to discuss.
6. Form 941 Part 5 - Signature
Once each and every part is completed, you are required to sign Form 941.
The following persons are authorized to sign the return for each type of business entity.
- Sole proprietorship: Individual who owns the company
- Corporation or an LLC treated as a corporation: President, vice president, or other principal officer
- Partnership or an LLC treated as a partnership: Partner, member, or officer
- Single-member LLC: Owner of the LLC or a principal officer
- Trust or estate: The fiduciary
Paid Preparers Using Only Form 941 must be
- Form 941 must be signed by a duly authorized agent of the taxpayer if a valid power of attorney has been filed.
- If the form is prepared by the paid preparer, enter their information such as name, signature, address, PTIN, and contact number.
- A paid preparer is someone who completes your Form 941 filing and is responsible for preparing payroll tax forms on your behalf.
- If your Form 941 is filed by a paid preparer, they have to enter their information
on part 5.
7. E-file Form 941 with TaxBandits in Minutes
TaxBandits makes the filing easier with these Form 941 instructions. E-File 941 with TaxBandits and get an Instant Approval from the IRS.
Follow the below simple steps to e-file form 941 for 2023 & Prior years (2022, 2021 & 2020).
- Create a free TaxBandits account!
- Choose "Form 941" and enter the details.
- Review and Transmit to the IRS.