Instructions For Form 941 - Employer'S Quarterly Federal Tax Return - 2017


Instructions for Form 941
Department of the Treasury
Internal Revenue Service
(Rev. January 2017)
Employer's QUARTERLY Federal Tax Return
Section references are to the Internal Revenue Code unless
performing services for a customer of the CPEO and covered
otherwise noted.
by a contract described in section 7705(e)(2) between the
CPEO and the customer (CPEO contract), but only for wages
Future Developments
and other compensation paid to the individual by the CPEO.
For more information, visit the IRS website at
For the latest information about developments related to
Form 941 and its instructions, such as legislation enacted
CPEOs generally must file Form 941 and Schedule R
after they were published, go to
(Form 941), Allocation Schedule for Aggregate Form 941
Filers, electronically. For more information about a CPEO’s
What's New
requirement to file electronically, see Rev. Proc. 2017-14,
2017-3 I.R.B. 426, available at
Social security and Medicare tax for 2017. The social
security tax rate is 6.2% each for the employee and
employer, unchanged from 2016. The social security wage
base limit is $127,200.
Work opportunity tax credit for qualified tax­exempt or­
The Medicare tax rate is 1.45% each for the employee
ganizations hiring qualified veterans. The work
and employer, unchanged from 2016. There is no wage base
opportunity tax credit is available for eligible unemployed
limit for Medicare tax.
veterans who begin work on or after November 22, 2011, and
Social security and Medicare taxes apply to the wages of
before January 1, 2020. Qualified tax-exempt organizations
household workers you pay $2,000 or more in cash wages in
that hire eligible unemployed veterans can claim the work
2017. Social security and Medicare taxes apply to election
opportunity tax credit against their payroll tax liability using
workers who are paid $1,800 or more in cash or an
Form 5884-C. For more information, visit and enter
equivalent form of compensation in 2017.
“work opportunity tax credit” in the search box.
Qualified small business payroll tax credit for increas­
COBRA premium assistance credit. Effective for tax
ing research activities. For tax years beginning after
periods beginning after December 31, 2013, the credit for
December 31, 2015, a qualified small business may elect to
COBRA premium assistance payments can't be claimed on
claim up to $250,000 of its credit for increasing research
Form 941. Instead, after filing your Form 941, file Form
activities as a payroll tax credit against the employer’s share
941-X, Adjusted Employer's QUARTERLY Federal Tax
of social security tax. The portion of the credit used against
Return or Claim for Refund, to claim the COBRA premium
the employer’s share of social security tax is allowed in the
assistance credit. Filing a Form 941-X before filing a Form
first calendar quarter beginning after the date that the
941 for the quarter may result in errors or delays in
qualified small business filed its income tax return. The
processing your Form 941-X. For more information, visit
election and determination of the credit amount that will be and enter “COBRA” in the search box.
used against the employer’s share of social security tax is
If you’re entitled to claim the COBRA premium
made on Form 6765, Credit for Increasing Research
assistance credit, but aren't otherwise required to file
Activities. The amount from Form 6765, line 44, must then be
Form 941, file a Form 941 with -0- entered on line 14
reported on Form 8974, Qualified Small Business Payroll Tax
before filing a Form 941-X to claim the credit.
Credit for Increasing Research Activities. Form 8974 is used
to determine the amount of the credit that can be used in the
Aggregate Form 941 filers. Agents and CPEOs must
current quarter. The amount from Form 8974, line 12, is
complete Schedule R (Form 941) when filing an aggregate
reported on Form 941, line 11. If you are claiming the
Form 941. Aggregate Forms 941 are filed by agents
research payroll tax credit on your Form 941, you must attach
approved by the IRS under section 3504. To request
Form 8974 to that Form 941.
approval to act as an agent for an employer, the agent files
New certification program for professional employer or­
Form 2678 with the IRS. Aggregate Forms 941 are also filed
ganizations. The Tax Increase Prevention Act of 2014
by CPEOs approved by the IRS under section 7705. CPEOs
required the IRS to establish a voluntary certification program
file Form 8973, Certified Professional Employer
for professional employer organizations (PEOs). PEOs
Organization/Customer Reporting Agreement, to notify the
handle various payroll administration and tax reporting
IRS that they started or ended a service contract with a
responsibilities for their business clients and are typically
customer. CPEOs generally must file Form 941 and
paid a fee based on payroll costs. To become and remain
Schedule R electronically. For more information about a
certified under the certification program, certified
CPEO’s requirement to file electronically, see Rev. Proc.
professional employer organizations (CPEOs) must meet tax
2017-14, 2017-3 I.R.B. 426, available at
status, background, experience, business location, financial
reporting, bonding and other requirements described in
Correcting a previously filed Form 941. If you discover
sections 3511 and 7705 and related published guidance. The
an error on a previously filed Form 941, make the correction
IRS began accepting applications for PEO certification in July
using Form 941-X. Form 941-X is filed separately from Form
2016. Certification as a CPEO affects the employment tax
941. For more information, see the Instructions for Form
liabilities of both the CPEO and its customers. A CPEO is
generally treated as the employer of any individual
Feb 27, 2017
Cat. No. 14625L


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