you were required to withhold on golden parachute payments
tipped employees must report tips to you. No report is
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
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
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%.
line 5c (column 1)
5a–5e. Taxable Social Security and Medicare
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
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.
Once wages and tips exceed the $200,000 withholding
line 5a (column 1)
threshold, include all tips your employees reported during the
quarter, even if you were unable to withhold the employee tax
line 5a (column 2)
line 5d (column 1)
5b. Taxable social security tips. Enter all tips your
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)