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

Here’s an example:

Part 2: Tell us about your deposit

Pine Co. discovered on February 6, 2008, that it

overreported social security tax on a prior quarter return by

schedule and tax liability for this

$2,500. Its Form 941 taxes for the first quarter of 2008 were:

quarter.

January, $2,000; February, $2,000, and March, $2,000. Pine

Co. reports liabilities on line 15 as follows:

Month 1 =

$2,000

14. State abbreviation

Month 2 =

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

Month 3 =

+$1,500

Service abbreviation for the bank branch in the state where

Total

$3,500

you deposit your taxes using Form 8109 or initiate EFTPS

transfers. IRS uses the state shown to determine banking

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

days for purposes of deposit due dates. Official state

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

holidays for the state shown are not counted as banking

offset March liabilities. Since the error was not discovered

days. If you deposit in multiple states, enter “MU” in the

until February, it does not affect January liabilities reported

spaces provided.

in Month 1 of line 15.

When you deposit in multiple states, IRS cannot

Using the above example, if the overreported social

determine what portion of your liability was affected by a

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

state holiday and may propose a deposit penalty for one or

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

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

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

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

a notice and your deposit due date was extended because

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

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

Form 941c for reporting requirements and information on the

holiday and applicable deposit amount.

option of filing a claim for refund of overpaid employment

taxes.

15. Check one:

•

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

Part 3: Tell us about your business.

line 15 and go to Part 3.

•

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

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

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

business. If the questions do not apply, leave them blank

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

and go to Part 4.

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

Check the appropriate box on line 15 and enter your tax

16. If your business has closed . . .

liability for each month in the quarter. Add the amounts for

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

each month. Enter the result in the Total liability for quarter

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

box.

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

Note that your total tax liability for the quarter must equal

last paid wages in the space provided. For additional filing

your total taxes shown on line 10. If it does not, your tax

requirements, see If your business has closed... on page 2.

deposits and payments may not be counted as timely.

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

If you hire employees seasonally — such as for summer or

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

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

the four consecutive quarters ending on June 30 of the prior

tells IRS not to expect four Forms 941 from you throughout

year. For 2008, the lookback period begins July 1, 2006,

the year because you have not paid wages regularly.

and ends June 30, 2007. For details on the deposit rules,

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

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

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

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

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

summary of deposits you made. If you do not

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

properly report your liabilities when required or if you

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

CAUTION

reported.

are a semiweekly schedule depositor and report your

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

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

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

Part 4: May we speak with your

(Circular E) for more information.

third-party designee?

•

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

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

lookback period (see above), you are a semiweekly

another person to discuss your Form 941 with the IRS,

schedule depositor. Check the appropriate box on line 15.

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

number, and the five-digit personal identification number

You must complete Schedule B (Form 941) and submit it

(PIN) of the specific person to speak with — not the name of

with your Form 941. Do not use Schedule B (Form 941) if

the firm who prepared your tax return. The designee may

you are a monthly schedule depositor.

choose any five numbers as his or her PIN.

Reporting adjustments on line 15. If your tax liability for

By checking “Yes,” you authorize the IRS to talk to the

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

person you named (your designee) about any questions we

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

may have while we process your return. You also authorize

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

your designee to:

•

month and subtract that negative amount from your tax

give us any information that is missing from your return,

•

liability for the next month.

call us for information about processing your return, and

-7-

Instructions For Form 941 - Employer'S Quarterly Federal Tax Return - 2008 Page 8

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