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

with the SSA. For more information, see Pub. 963,

6. Total taxes before adjustments

Federal-State Reference Guide.

Add the total federal income tax withheld from wages, tips,

and other compensation (line 3) and the total social security

5. Taxable social security and Medicare

and Medicare taxes before adjustments (line 5d).

wages and tips

5a. Taxable social security wages. Report the total

7. TAX ADJUSTMENTS

wages, sick pay, and fringe benefits subject to social

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

security taxes you paid to your employees during the

current or prior period adjustments. Use a minus sign (if

quarter. For this purpose, sick pay includes payments made

possible) to show an adjustment that decreases the total

by an insurance company to your employees for which you

taxes shown on line 6 instead of parentheses. Doing so

received timely notice from the insurance company. See

enhances the accuracy of our scanning software. For

Section 6 in Pub. 15-A for more information about sick pay

example, report “-10.59” instead of “(10.59).” However, if

reporting.

your software only allows for parentheses in reporting

negative amounts, you may use them. Do not enter an

Enter the amount before deductions. Do not include tips

amount on line 7f or line 7g unless the IRS has sent you a

on this line. For information on types of wages subject to

notice instructing you to do so.

social security taxes, see section 5 of Pub. 15 (Circular E).

The rate of social security tax on taxable wages is 6.2

Current period adjustments. In certain cases, you must

percent (.062) each for the employer and employee or 12.4

adjust the amounts you reported as social security and

percent (.124) for both. Stop paying social security tax on

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

and reporting an employee’s wages on line 5a when the

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

employee’s taxable wages (including tips) reach $102,000

section 13 of Pub. 15 (Circular E). Do not attach Form 941c

during 2008. However, continue to withhold income and

or an equivalent statement for current period adjustments.

Medicare taxes for the whole year on wages and tips even

If you need to adjust any amount previously reported on

when the social security wage base of $102,000 has been

lines 7a, 7b, or 7c, use line 7e to report the adjustment and

reached.

attach Form 941c or an equivalent statement with an

line 5a (column 1)

explanation.

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line 5a (column 2)

7a. Current quarter’s fractions of cents. Enter

adjustments for fractions of cents (due to rounding) relating

5b. Taxable social security tips. Enter all tips your

to the employee share of social security and Medicare taxes

employees reported to you during the quarter until the total

withheld. The employee share (one-half) of amounts shown

of the tips and wages for an employee reach $102,000

in column 2 of lines 5a, 5b, and 5c may differ slightly from

in 2008. Do this even if you were unable to withhold the

amounts actually withheld from employees’ paychecks due

employee tax of 6.2%.

to the rounding of social security and Medicare taxes based

on statutory rates.

An employee must report cash tips to you, including tips

you paid the employee for charge customers, totaling $20 or

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

more in a month by the 10th of the next month. Employees

for the employee share of social security and Medicare

may use Form 4070, Employee’s Report of Tips to

taxes that were withheld by your third-party sick pay payer.

Employer, or submit a written statement or electronic tip

record.

7c. Current quarter’s adjustments for tips and

group-term life insurance. Enter adjustments for:

Do not include allocated tips on this line. Instead, report

•

any uncollected employee share of social security and

them on Form 8027, Employer’s Annual Information Return

Medicare taxes on tips and

of Tip Income and Allocated Tips. Allocated tips are not

•

the uncollected employee share of social security and

reportable on Form 941 and are not subject to withholding of

Medicare taxes on group-term life insurance premiums paid

federal income, social security, or Medicare taxes.

for former employees.

line 5b (column 1)

Prior period adjustments. Use lines 7d through 7g to

.124

adjust amounts reported on previous returns. If you need

line 5b (column 2)

to report both an increase and a decrease for the same line,

show only the net difference.

5c. Taxable Medicare wages & tips. Report all

wages, tips, sick pay, and taxable fringe benefits that are

Adjustments you report here change your tax liability and

subject to Medicare tax. Unlike social security wages, there

your tax deposits. You will have to take these adjustments

is no limit on the amount of wages subject to Medicare tax.

into account on line 15 as Tax liability: Month 1; Month 2;

Include all tips your employees reported during the

Month 3 or on Schedule B (Form 941). You must explain

quarter, even if you were unable to withhold the employee

any prior period adjustments that you make on

tax of 1.45%.

Form 941c or in an equivalent statement.

line 5c (column 1)

Form 941c is not an amended return but is a statement

.029

providing the necessary information and certifications for

line 5c (column 2)

adjustments shown on lines 7d through 7g. Do not file

Form 941c separately from Form 941. See section 13 of

For more information on tips, see section 6 of Pub. 15

Pub. 15 (Circular E).

(Circular E).

7d. Current year’s income tax withholding. Enter

5d. Total social security and Medicare taxes. Add

adjustments for the current year’s federal income tax

the social security tax, social security tips tax, and Medicare

withholding. For example, if you made a mistake when

tax.

withholding federal income tax from wages that were paid in

earlier quarters of the same calendar year, adjust it here.

line 5a (column 2)

However, see the CAUTION at the top of page 6 for

line 5b (column 2)

adjustment of a prior year’s “administrative error” also

line 5c (column 2)

shown on line 7d.

line 5d

-5-

Instructions For Form 941 - Employer'S Quarterly Federal Tax Return - 2008 Page 6

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