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

you were required to withhold on golden parachute payments

tipped employees must report tips to you. No report is

(section 4999).

required for months when tips are less than $20. Employees

may use Form 4070 (available only in Pub. 1244), or submit a

If you’re a third-party payer of sick pay, enter the federal

written statement or electronic tip record.

income tax you withheld (or were required to withhold) on

Don't include allocated tips on this line. Instead, report

third-party sick pay here.

them on Form 8027. Allocated tips aren't reportable on Form

4. If No Wages, Tips, and Other Compensation

941 and aren't subject to withholding of federal income,

social security, or Medicare taxes.

are Subject to Social Security or Medicare

Tax . . .

line 5b (column 1)

If no wages, tips, and other compensation on line 2 are

x 0.124

subject to social security or Medicare tax, check the box on

line 5b (column 2)

line 4. If this question doesn't apply to you, leave the box

blank. For more information about exempt wages, see

5c. Taxable Medicare wages & tips. Enter all wages,

section 15 of Pub. 15 and section 4 of

Pub. 15-A, Employer's Supplemental Tax Guide.

tips, sick pay, and taxable fringe benefits that are subject to

Medicare tax. Unlike social security wages, there is no limit

If you’re a government employer, wages you pay

on the amount of wages subject to Medicare tax.

aren't automatically exempt from social security and

The rate of Medicare tax is 1.45% (0.0145) each for the

Medicare taxes. Your employees may be covered by

CAUTION

employer and employee or 2.9% (0.029) for both. Include all

law or by a voluntary Section 218 Agreement with the SSA.

tips your employees reported during the quarter, even if you

For more information, see Pub. 963, Federal-State

were unable to withhold the employee tax of 1.45%.

Reference Guide.

line 5c (column 1)

5a–5e. Taxable Social Security and Medicare

x 0.029

Wages and Tips

line 5c (column 2)

5a. Taxable social security wages. Enter the total

wages, sick pay, and taxable fringe benefits subject to social

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

security taxes you paid to your employees during the quarter.

For this purpose, sick pay includes payments made by an

5d. Taxable wages & tips subject to Additional

insurance company to your employees for which you

Medicare Tax withholding. Enter all wages, tips, sick pay,

received timely notice from the insurance company. See

and taxable fringe benefits that are subject to Additional

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

Medicare Tax withholding. You’re required to begin

reporting.

withholding Additional Medicare Tax in the pay period in

which you pay wages in excess of $200,000 to an employee

Enter the amount before deductions. Don't include tips on

and continue to withhold it each pay period until the end of

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

the calendar year. Additional Medicare Tax is only imposed

security taxes, see section 5 of Pub. 15.

on the employee. There is no employer share of Additional

For 2017, the rate of social security tax on taxable wages

Medicare Tax. All wages that are subject to Medicare tax are

is 6.2% (0.062) each for the employer and employee or

subject to Additional Medicare Tax withholding if paid in

12.4% (0.124) for both. Stop paying social security tax on

excess of the $200,000 withholding threshold.

and entering an employee's wages on line 5a when the

For more information on what wages are subject to

employee's taxable wages (including tips) reach $127,200 for

Medicare tax, see the chart, Special Rules for Various Types

the year. However, continue to withhold income and

of Services and Payments, in section 15 of Pub. 15. For more

Medicare taxes for the whole year on wages and tips even

information on Additional Medicare Tax, visit IRS.gov and

when the social security wage base of $127,200 has been

enter “Additional Medicare Tax” in the search box.

reached.

Once wages and tips exceed the $200,000 withholding

line 5a (column 1)

threshold, include all tips your employees reported during the

x 0.124

quarter, even if you were unable to withhold the employee tax

of 0.9%.

line 5a (column 2)

line 5d (column 1)

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

x 0.009

employees reported to you during the quarter until the total of

line 5d (column 2)

the tips and wages for an employee reach $127,200 for the

year. Include all tips your employee reported to you even if

you were unable to withhold the employee tax of 6.2%. Don’t

5e. Total social security and Medicare taxes. Add the

include service charges on line 5b.

column 2 amounts on lines 5a–5d. Enter the result on line 5e.

Your employee must report cash tips to you by the 10th

5f. Section 3121(q) Notice and Demand—Tax

day of the month after the month the tips are received. The

Due on Unreported Tips

report should include charged tips (for example, credit and

debit card charges) you paid over to the employee for charge

Enter the tax due from your Section 3121(q) Notice and

customers, tips the employee received directly from

Demand on line 5f. The IRS issues a Section 3121(q) Notice

customers, and tips received from other employees under

and Demand to advise an employer of the amount of tips

any tip-sharing arrangement. Both directly and indirectly

received by employees who failed to report or underreported

Instructions for Form 941 (Rev. 12017)

Instructions For Form 941 - Employer'S Quarterly Federal Tax Return - 2017 Page 7

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