Instructions For Form 941 - Employer'S Quarterly Federal Tax Return

employees use the amount shown on Form W-2 as a credit

required to deposit. See section 11 of Pub. 15 (Circular E)

when they file their income tax returns.

for information and rules about federal tax deposits.

•

If line 10 is $2,500 or more, you must deposit your tax

Do not adjust federal income tax withholding for

liabilities by using the Electronic Federal Tax Payment

quarters in previous years unless you do it to correct

System (EFTPS) or at an authorized financial institution with

an administrative error. An administrative error

CAUTION

Form 8109. The amount shown on line 10 must equal the

happened if the amount you entered on Form 941 was not

“Total liability for quarter” shown on Form 941, line 15 or the

the same amount you actually withheld. For example, when

“Total liability for the quarter” shown on Schedule B

the total amount of federal income tax actually withheld was

(Form 941).

not reported correctly on Form 941 because of a

If you are a semiweekly depositor, you must

mathematical or transposition error, the difference is an

complete Schedule B (Form 941). If you fail to

administrative error. The administrative error adjustment

complete and submit Schedule B (Form 941), IRS

corrects the amounts reported on the Form 941 to agree

CAUTION

will assert deposit penalties based on available information.

with the amount actually withheld from the employee.

Remember to attach an explanation for the adjustment.

11. Total Deposits for This Quarter

7e. Prior quarters’ social security and Medicare

Enter your deposits for this quarter, including any deposits

taxes. Enter adjustments for prior quarters’ social security

that you were required to make to cover prior period

and Medicare taxes. For example, if you made a mistake

liabilities resulting from adjustments shown on line 7. Also

when reporting social security and Medicare taxes on

include in the amount shown any overpayment from a

previously filed Forms 941, adjust it here. If you need to

previous period that you applied to this return.

report both an underpayment and an overpayment, show

only the net difference.

12. Balance Due

If line 10 is more than line 11, write the difference in line 12.

If you are adjusting an employee’s social security

Otherwise, see Overpayment below.

TIP

wages, social security tips, or Medicare wages and

tips for a prior year, you must also file Form W-2c,

You do not have to pay if line 12 is under $1. Generally,

Corrected Wage and Tax Statement, and Form W-3c,

you should have a balance due only if your total taxes after

Transmittal of Corrected Wage and Tax Statements.

adjustment for advance EIC for the quarter (line 10) are less

than $2,500. (However, see section 11 of Pub. 15 (Circular

7f. Special additions to federal income tax. This line

E) for information about payments made under the

is reserved for employers with special circumstances. Use

accuracy of deposits rule.)

this line only if the IRS has sent you a notice instructing you

You may pay the amount shown on line 12 using EFTPS

to do so. You must attach Form 941c explaining the tax

or credit card. Do not use a credit card to pay taxes that

increase.

were required to be deposited. For more information on

7g. Special additions to social security and

paying your taxes with a credit card, visit the IRS website at

Medicare. This line is reserved for employers with special

and type “e-pay” in the Search box.

circumstances. Use this line only if the IRS has sent you a

If you pay by EFTPS or credit card, file your return using

notice instructing you to do so. You must attach Form 941c

the “Without a payment” address on page 4 under Where

explaining the tax increase.

should you file? and do not file Form 941-V, Payment

7h. TOTAL ADJUSTMENTS. Combine all adjustments

Voucher.

shown on lines 7a through 7g and enter the result here.

If line 10 is $2,500 or more and you have deposited all

taxes when due, line 12 (“Balance due”) should be zero.

Total Taxes After Adjustments

Combine the amounts shown on lines 6 and 7h and enter

If you do not deposit as required and, instead, pay

the result here.

the taxes with Form 941, you may be subject to a

penalty.

CAUTION

9. Advance Earned Income Credit (EIC)

13. Overpayment

Payments Made to Employees

If line 11 is more than line 10, write the amount in line 13.

Enter the amount of the advance earned income credit (EIC)

Never make an entry in both lines 12 and 13.

payments that you made to your employees. Eligible

employees may choose to receive part of the EIC as an

If you deposited more than the correct amount for a

advance payment. Those who expect to have a qualifying

quarter, you can choose to have the IRS either refund the

child must give you a completed Form W-5 stating they

overpayment or apply it to your next return. Check the

expect to qualify for the EIC. Once the employee gives you

appropriate box in line 13. If you do not check either box, we

a signed and completed Form W-5 you must make the

will automatically refund the overpayment. We may apply

advance EIC payments starting with the employee’s next

your overpayment to any past due tax account that is shown

wage payment. Advance EIC payments are generally made

in our records under your EIN.

from withheld federal income tax and employee and

If line 13 is under $1, we will send a refund or apply it to

employer social security and Medicare taxes. See section

your next return only if you ask us in writing to do so.

10 of Pub. 15 (Circular E) and Pub. 596, Earned Income

Fill out both pages.

Credit.

You must fill out both pages of Form 941 and sign it on the

If the amount of your advance EIC payments is more

second page. Failure to do so may delay processing of your

than your total taxes after adjustments (line 8) for the

return.

quarter, you may claim a refund of the overpayment or elect

to have the credit applied to your return for the next quarter.

Attach a statement to your Form 941 identifying the amount

Part 2: Tell us about your deposit

of excess payments and the pay periods in which you paid

it. See section 10 of Pub. 15 (Circular E).

schedule and tax liability for this

10. Total Taxes After Adjustment for

quarter.

Advance EIC

Calculate your total taxes as shown below.

14. State abbreviation

line 8

In the spaces provided, write the two-letter U.S. Postal

−

line 9

Service abbreviation for the state where you deposit your

line 10

taxes using Form 8109 or initiate EFTPS transfers. IRS uses

•

If line 10 is less than $2,500, you may pay the full

the state shown to determine banking days for purposes of

amount with a timely filed return because you were not

deposit due dates. Official state holidays for the state shown

-6-

Instructions For Form 941 - Employer'S Quarterly Federal Tax Return - 2006 Page 6

Related Articles

Related forms

Related Categories