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

7. Tax adjustments

10. Total taxes after adjustment for advance

EIC

Enter tax amounts on lines 7a through 7c that result from

current quarter adjustments. Use a minus sign (if possible)

Subtract line 9 from line 8 and enter the result on line 10.

to show an adjustment that decreases the total taxes shown

•

If line 10 is less than $2,500 or line 10 on the

on line 6e instead of parentheses. Doing so enhances the

preceding quarterly return was less than $2,500, and

accuracy of our scanning software. For example, report

you did not incur a $100,000 next-day deposit obligation

“-10.59” instead of “(10.59).” However, if your software only

during the current quarter. You may pay the amount with

allows for parentheses in reporting negative amounts, you

Form 941 or you may deposit the amount. To avoid a

may use them.

penalty, you must pay the amount in full with a timely filed

Current quarter’s adjustments. In certain cases, you

return or you must deposit the amount timely.

must adjust the amounts you reported as social security and

•

If line 10 is $2,500 or more and line 10 on the

Medicare taxes in column 2 of lines 5a, 5b, and 5c to figure

preceding quarterly return was $2,500 or more, or if you

your correct tax liability for this quarter’s Form 941. See

incurred a $100,000 next-day deposit obligation during

section 13 of Pub. 15 (Circular E).

the current quarter.You must make deposits according to

Prior quarter’s adjustments. If you need to adjust any

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

amount reported on lines 7a, 7b, or 7c from a previously

E) for information and rules about federal tax deposits. The

filed Form 941, complete and file Form 941-X. Form 941-X

amount shown on line 10 must equal the “Total liability for

is filed separately from Form 941. See section 13 of Pub. 15

the quarter” shown on line 17 or the “Total liability for the

(Circular E).

quarter” shown on Schedule B (Form 941).

7a. Current quarter’s adjustment for fractions of

The IRS has issued proposed regulations under

cents. Enter adjustments for fractions of cents (due to

section 6302 which provide that beginning January

rounding) relating to the employee share of social security

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

CAUTION

and Medicare taxes withheld. The employee share

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

(one-half) of amounts shown in column 2 of lines 5a, 5b, and

electronically using the Electronic Federal Tax Payment

5c may differ slightly from amounts actually withheld from

System (EFTPS). Under these proposed regulations, which

employees’ paychecks due to the rounding of social security

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

and Medicare taxes based on statutory rates.

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

7b. Current quarter’s adjustment for sick pay. Enter

used after December 31, 2010. For more information about

the adjustment for the employee share of social security and

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

Medicare taxes that were withheld by your third-party sick

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

pay payer.

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

7c. Current quarter’s adjustments for tips and

For more information on federal tax deposits, see

group-term life insurance. Enter adjustments for:

Depositing Your Taxes on page 4 and section 11 of Pub. 15

•

Any uncollected employee share of social security and

(Circular E).

Medicare taxes on tips and

•

If you are a semiweekly depositor, you must

The uncollected employee share of social security and

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

Medicare taxes on group-term life insurance premiums paid

complete and submit Schedule B (Form 941), the

for former employees.

CAUTION

IRS will assert deposit penalties based on available

8. Total taxes after adjustments

information.

Combine the amounts shown on lines 6e through 7c and

11. Total deposits for this quarter...

enter the result here.

Enter your deposits for this quarter, including any

9. Advance earned income credit (EIC)

overpayment that you applied from filing Form 941-X or

payments made to employees

Form 944-X in the current quarter. Also include in the

amount shown any overpayment from a previous period that

you applied to this return.

After December 31, 2010, advance payroll payments

of EIC cannot be made to employees. However,

12a. COBRA premium assistance payments

employees may be eligible to claim EIC on their

CAUTION

Report on this line 65% of the COBRA premiums for

individual income tax returns.

assistance eligible individuals. Take the COBRA premium

Enter the amount of the advance EIC payments that you

assistance credit on this line only after the assistance

made to your employees. Eligible employees may choose to

eligible individual’s 35% share of the premium has been

receive part of the EIC as an advance payment. Those who

paid. For COBRA coverage provided under a self-insured

expect to have a qualifying child must give you a completed

plan, COBRA premium assistance is treated as having been

Form W-5 stating they expect to qualify for the EIC. Once

made for each assistance eligible individual who pays 35%

the employee gives you a signed and completed Form W-5

of the COBRA premium. Do not include the assistance

you must make the advance EIC payments starting with the

eligible individual’s 35% of the premium in the amount

employee’s next wage payment. Advance EIC payments are

entered on this line. For more information on the COBRA

generally made from withheld federal income tax and

premium assistance credit visit IRS.gov and enter the

employee and employer social security and Medicare taxes.

keyword COBRA.

If the amount of your advance EIC payments is more

The amount reported on line 12a is treated as a

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

deposit of taxes on the first day of your return period

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

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

and must not be used to adjust line 17 or Schedule B

CAUTION

(Form 941).

Attach a statement to Form 941 identifying the amount of

excess payments and the pay periods in which you paid

If you provided premium assistance in a prior quarter of

them.

the current year and did not report the amount of that

For more information on advance EIC, see section 10 of

premium assistance on Form 941 for that quarter, you may

Pub. 15 (Circular E) and Pub. 596.

include the amount of that premium assistance in the

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Instructions For Form 941 - Employer'S Quarterly Federal Tax Return - 2010 Page 8

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