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

When you deposit in multiple states, IRS cannot

until February, it does not affect January liabilities reported

determine what portion of your liability was affected by a

in Month 1 of line 15.

state holiday and may propose a deposit penalty for one or

Using the above example, if the overreported social

more of the states where you made deposits. If you receive

security tax on a prior quarter return had been $10,000, Pine

a notice and your deposit due date was extended because

Co. could carry the excess negative adjustment of $6,000

of a state bank holiday, respond to the notice citing the state

($10,000 − $2,000 − $2,000) to the next quarter. Pine Co.

holiday and applicable deposit amount.

would only report $4,000 of the adjustment on line 7e

because line 10 must equal the total shown in line 15. See

15. Check one:

Form 941c for reporting requirements and information on the

•

If line 10 is less than $2,500, check the appropriate box in

option of filing a claim for refund of overpaid employment

line 15 and go to Part 3.

taxes.

•

If you reported $50,000 or less in taxes during the

lookback period (see below), you are a monthly schedule

depositor unless the $100,000 Next-Day Deposit Rule

Part 3: Tell us about your business

discussed in section 11 of Pub. 15 (Circular E) applies.

Check the appropriate box on line 15 and fill out your tax

In Part 3, answer only those questions that apply to your

liability for each month in the quarter.

business. If a question does not apply, leave it blank and go

to Part 4.

Month 1

Month 2

16. If Your Business Has Closed . . .

Month 3

Total tax liability for the quarter

If you go out of business or stop paying wages, you must file

a final return. To tell IRS that a particular Form 941 is your

Note that your total tax liability for the quarter must equal

final return, check the box on line 16 and enter the date you

your total taxes shown on line 10.

last paid wages in the space provided.

You are a monthly schedule depositor for the calendar

17. If You Are a Seasonal Employer . . .

year if the amount of your Form 941 taxes reported for the

lookback period is $50,000 or less. The lookback period is

If you hire employees seasonally — such as for summer or

the four consecutive quarters ending on June 30 of the prior

winter only — check the box on line 17. Checking the box

year. For 2005, the lookback period begins July 1, 2003,

tells IRS not to expect four Forms 941 from you throughout

and ends June 30, 2004. For details on the deposit rules,

the year because you have not paid wages regularly.

see section 11 of Pub. 15 (Circular E).

IRS will mail you two forms once a year after March 1.

Generally, we will not ask about unfiled returns if you file at

This is a summary of your monthly tax liability, not a

least one return showing tax due each year. However, you

summary of deposits you made. If you do not

must check the box every time you file a Form 941.

properly report your liabilities when required or if you

CAUTION

are a semiweekly schedule depositor and report your

Also, when you fill out Form 941, be sure to check the

liabilities on line 15 instead of on Schedule B (Form 941),

box on the top of the form that corresponds to the quarter

you may be assessed an “averaged” failure-to-deposit (FTD)

reported.

penalty. See Deposit Penalties in section 11 of Pub. 15

(Circular E) for more information.

•

If you reported more than $50,000 of taxes for the

Part 4: May we contact your

lookback period, you are a semiweekly schedule

third-party designee?

depositor. Check the appropriate box on line 15.

You must complete the 2005 Schedule B (Form 941) and

If you want to allow an employee, a paid tax preparer, or

submit it with your Form 941. Do not use Schedule B

another person to discuss your Form 941 with the IRS,

(Form 941) if you are a monthly schedule depositor.

check the “Yes” box in Part 4. Then tell us the name, phone

Reporting adjustments on line 15. If your tax liability for

number, and the five-digit personal identification number

any month is negative (for example, if you are adjusting an

(PIN) of the specific person to contact — not the name of the

overreported liability in a prior period), do not enter a

firm who prepared your tax return. The designee may

negative amount for the month. Instead, enter zero for the

choose any five numbers as his or her PIN.

month and subtract that negative amount from your tax

liability for the next month.

By checking “Yes,” you authorize IRS to call the person

you named (your designee) with any questions we may

have while we process your return. You also authorize your

Here’s an example:

designee to:

Pine Co. discovered on February 6, 2005, that it

•

give us any information that is missing from your return,

overreported social security tax on a prior quarter return by

•

call us for information about processing your return, and

$2,500. Its Form 941 taxes for the first quarter of 2005 were:

•

respond to certain IRS notices that you have shared with

your designee about math errors and return preparation.

January =

$2,000

February =

$2,000

IRS will not send notices to your designee.

March =

$2,000

You are not authorizing your designee to bind you to

anything (including additional tax liability) or to otherwise

Pine Co. reports liabilities on line 15 as follows:

represent you before the IRS. If you want to expand your

Month 1 =

$2,000

designee’s authorization, see Pub. 947, Practice Before the

Month 2 =

IRS and Power of Attorney.

Month 3 =

+$1,500

The authorization will automatically expire one year from

Total

$3,500

the due date (without regard to extensions) for filing your

Form 941. If you or your designee want to terminate the

The prior period adjustment ($2,500) offsets the $2,000

authorization, write to the IRS office for your locality using

liability for February and the excess $500 must be used to

the “Without a payment” address under Where Should You

offset March liabilities. Since the error was not discovered

File on page 4.

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Instructions For Form 941 - Employer'S Quarterly Federal Tax Return - 2005 Page 7

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