Form 941 - Instructions, and Due Date
Updated on June 30, 2021 - 10:30 AM by Admin, TaxBandits
If you are an employer, you are responsible for withholding federal income tax, social security tax, and Medicare tax from each employee’s wages.
For each quarter, this withholding information has to be reported with the IRS using Form 941.
In this article, we cover the following topics:
- What is Form 941?
- Who needs to file Form 941?
- What are the changes to Form 941 for the Q2 of 2021?
- What is the purpose of the 941 Worksheets and how have they been updated
for the Q2 of 2021?
- Information to be reported on Form 941
- What information shouldn’t be reported on Form 941?
- What is the deadline for Form 941?
- What are the changes in 2021 Form 941 First Quarter?
- What are the different types of Form 941 filing methods?
1. What is Form 941?
The IRS Form 941, Employer’s Quarterly Federal Tax Return, used by businesses to report employee wages and payroll taxes.
Usually, Form 941 reports:
- Wages paid to employees
- Federal income taxes withheld
- FICA taxes (Social Security, and Medicare taxes)
- Tips Reported
- Additional taxes withheld
2. Who needs to file Form 941?
Employers or business owners who pay wages to an employee must file IRS Form 941 every quarter.
There are a few exceptions. If you are
- Seasonal business employers
- Employers of household employees
- Employers of farm employees
then you don’t have to file Form 941.
3. What are the changes to Form 941 for the Q2 of 2021?
The American Rescue Plan Act was introduced in March, under this new legislature the COVID-19 related tax credits have been extended and expanded. This has resulted in many changes to the Form 941 for Q2 2021. Employers can still claim the sick and family leave credits and the employee retention credit, however they will be calculated differently after March 31, 2021. In addition, eligible employers can also claim the new COBRA premium assistance credit.
4. What is the purpose of the 941 Worksheets and how have they been updated for the Q2 of 2021?
The Form 941 Worksheets were created to help employers calculate the refundable and nonrefundable portions of the sick and family leave and employee retention credits. The 941 Worksheet 1 was used to calculate these credits in past quarters, however it has been updated for the second quarter of 2021. It has also been expanded into 5 separate Worksheets.
The third step of Worksheet 1 has been removed and made into its own separate worksheet. Form 941 Worksheet 2 for the Q2 of 2021 should be used to calculate the refundable and nonrefundable portions of the employee retention credit.
Visit https://www.taxbandits.com/form-941/worksheet-2-for-q2-2021/ to learn more.
5. Information to be reported on Form 941
As an employer, you need to report the following information when you are filing form 941 with the IRS:
- Quarter for which form 941 is filed
Business details including:
- Business Name, EIN, and Address
- Number of Employees
- Medicare and Social Security Taxes
- Deposits Made to the IRS
- Deposit schedule and tax liability
- Signing Authority Information
- Online Signature PIN or Form 8453-EMP
6. What information shouldn’t be reported on the 941 Tax Form?
Use Form 941 for reporting tax withholdings from employee wages. You shouldn’t report nonpayroll withholding information on Form 941. This includes employee backup withholding and income tax withholding for:
- Gambling wins
Use Form 945 to report the withholdings from pensions, annuities and gambling wins.
7. When is Form 941 Due?
Your IRS Form 941 is due by the last day of the month that follows the end of the quarter:
- April 30 for the First-quarter (January, February, and March)
- July 31 for the Second-quarter (April, May, and June)
- October 31 for the Third-quarter (July, August, and September)
- January 31 for the Fourth-quarter (October, November, and December)
If the due date falls on any federal holiday, then the next business day will be the filing deadline.
8. What are the changes in 2021 Form 941 First Quarter?
The tax rates for both Social Security and Medicare have remained the same.
However, there are updated withholding tables for 2021.
Visit, https://www.irs.gov/pub/irs-dft/i941--dft.pdf for more information about withholding tables.
- The social security wage base limit is $142,800 for 2021 (it was $137,700 for 2020).
- Social security and Medicare taxes apply to the wages of household workers that you paid $2,300 or more in cash wages in 2021. Social security and Medicare taxes apply to election workers who are paid $2,000 or more in cash or an equivalent form of compensation during 2021.
- Line 13b and 24 are reserved for future use in the revised Form 941, and employers must use it for the first quarter of 2021.
9. Form 941 filing methods
E-filing of Form 941 is the easiest method and it is actually preferred by the IRS. Employers will be able to get their IRS filing status instantly and the total filing process will take less than 5 minutes. This method saves employers time and allows them to easily pay their balance due as well.
The traditional paper filing Form 941 involves more time and effort. Many hidden costs like printing, envelopes, and postal mailing charges are included. Tracking the filing status of your Form 941 can be stressful for employers, as they might not know whether or not the return is accepted by the IRS.
Review all wage and tax categories. Then, prior to processing your W-2s and 941s, verify that all general ledger liability accounts balance.