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

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A substitute Form W-2 with the same EIC information on

the preceding quarter were less than $2,500, you are unsure

the back of the employee’s copy that is on Copy B of the

whether you will incur a $100,000 next-day deposit

IRS Form W-2.

obligation in the current quarter, and you are unsure your

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Notice 797, Possible Federal Tax Refund Due to the

taxes will be less than $2,500 in the current quarter, deposit

Earned Income Credit (EIC).

your taxes using the appropriate rules (above) to avoid

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Your written statement with the same wording as Notice

failure to deposit penalties.

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797.

$2,500 or more for the current quarter and the

preceding quarter.You must make deposits according to

For more information, see section 10 of Pub. 15 (Circular

your deposit schedule. See section 11 of Pub. 15 (Circular

E) and Pub. 596, Earned Income Credit (EIC).

E) for information and rules about federal tax deposits.

Reconciling Forms 941 and Form W-3

The IRS has issued proposed regulations under

The IRS matches amounts reported on your four quarterly

section 6302 which provide that beginning January

Forms 941 with Form W-2 amounts totaled on your yearly

1, 2011, you must deposit all depository taxes (such

CAUTION

Form W-3. If the amounts do not agree, you may be

as employment tax, excise tax, and corporate income tax)

contacted by the IRS or the Social Security Administration

electronically using the Electronic Federal Tax Payment

(SSA). The following amounts are reconciled.

System (EFTPS). Under these proposed regulations, which

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Federal income tax withholding.

are expected to be finalized by December 31, 2010, Forms

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Social security wages.

8109 and 8109-B, Federal Tax Deposit Coupon, cannot be

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Social security tips.

used after December 31, 2010. For more information about

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Medicare wages and tips.

EFTPS or to enroll in EFTPS, visit the EFTPS website at

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Advance EIC payments.

, or call 1-800-555-4477. You can also get

Pub. 966, The Secure Way to Pay Your Federal Taxes.

For more information, see section 12 of Pub. 15

(Circular E) and the Instructions for Schedule D (Form 941).

You may reduce your deposits during the quarter by the

amount of:

Depositing Your Taxes:

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COBRA premium assistance payments on line 12a,

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When Must You Deposit Your Taxes?

Employer’s exempt social security tax on line 6d, and

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Employer’s exempt social security tax on line12e (only for

the second quarter of 2010).

Determine if you are a monthly or

EFTPS is an easy, safe, and convenient way for all

semiweekly schedule depositor for the

employers to make their tax deposits. Using EFTPS

TIP

quarter.

helps eliminate errors commonly made on federal tax

deposit (FTD) coupons. Some taxpayers are required to

The IRS uses two different sets of deposit rules to determine

use EFTPS to deposit their taxes. See section 11 of

when businesses must deposit their social security,

Pub. 15 (Circular E) for details.

Medicare, and withheld federal income taxes. These

schedules tell you when a deposit is due after you have a

What About Penalties and Interest?

payday.

Your deposit schedule is not determined by how often

you pay your employees. Your deposit schedule depends on

Avoiding penalties and interest

the total tax liability you reported on Form 941 during the

previous four-quarter lookback period (July 1 of the second

You can avoid paying penalties and interest if you do all of

preceding calendar year through June 30 of last year). See

the following.

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section 11 of Pub. 15 (Circular E) for details. If you filed

Deposit or pay your taxes when they are due, using

Form 944 in either 2008 or 2009, your lookback period is the

EFTPS if required.

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2008 calendar year.

File your fully completed Form 941 on time.

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Report your tax liability accurately.

Before the beginning of each calendar year, determine

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Submit valid checks for tax payments.

which type of deposit schedule you must use. If you

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Furnish accurate Forms W-2 to employees.

reported:

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File Form W-3 and Copies A of Form W-2 with the Social

$50,000 or less in taxes during the lookback period, you

Security Administration (SSA) on time and accurately.

are a monthly schedule depositor.

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More than $50,000 of taxes for the lookback period, you

Penalties and interest are charged on taxes paid late

are a semiweekly schedule depositor.

and returns filed late at a rate set by law. See sections 11

and 12 of Pub. 15 (Circular E) for details.

See section 11 of Pub. 15 (Circular E) for the Next

Day Deposit Rule on taxes of $100,000 or more

TIP

Use Form 843, Claim for Refund and Request for

accumulated on any day during the deposit period.

Abatement, to request abatement of assessed penalties or

interest. Do not request abatement of assessed penalties or

How Must You Deposit Your Taxes?

interest on Form 941 or Form 941-X.

A trust fund recovery penalty may apply if federal

You may have to deposit the federal income taxes you

withheld and both the employer and employee social

income, social security, and Medicare taxes that

security taxes and Medicare taxes. If your total taxes after

must be withheld are not withheld or paid. The

CAUTION

adjustment for advance EIC (line 10) are:

penalty is the full amount of the unpaid trust fund tax. This

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Less than $2,500 for the current quarter or the

penalty may apply when these unpaid taxes cannot be

preceding quarter, and you did not incur a $100,000

collected from the employer. The trust fund recovery penalty

next-day deposit obligation during the current quarter.

may be imposed on all people the IRS determines to be

You do not have to make a deposit. To avoid a penalty, you

responsible for collecting, accounting for, and paying these

must pay the amount in full with a timely filed return or you

taxes, and who acted willfully in not doing so. For details,

must deposit the amount timely. However, if your taxes for

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

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Instructions For Form 941 - Employer'S Quarterly Federal Tax Return - 2010 Page 5

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