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

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 IRS.gov/cpeo.

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 IRS.gov/form941.

(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

IRS.gov/irb/2017-03_IRB/

Social security and Medicare tax for 2017. The social

ar14.html.

security tax rate is 6.2% each for the employee and

Reminders

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 IRS.gov 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

IRS.gov 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

TIP

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

IRS.gov/irb/

status, background, experience, business location, financial

2017-03_IRB/ar14.html.

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

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

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