Form 941: Employer's Quarterly Federal Tax Return

Line 1: Number of employeesEmployees on the payroll for the pay period that includes March 12, June 12, September 12 or December 12. Leave out household and farm employees, pensioners, employees in nonpay status and active members of the Armed Forces.Click to open the row in the table belowLine 2: Wages, tips, and other compensationThe amounts that also go in box 1 of the employees' Forms W-2, including sick pay paid by your agent. Must not be left blank even when zero.Click to open the row in the table belowLine 3: Federal income tax withheldIncome tax withheld (or required to be withheld) from wages, tips, taxable fringe benefits and supplemental unemployment benefits. Do not include tax withheld by a third-party payer of sick pay, and never backup withholding.Click to open the row in the table belowLine 4: No wages subject to social security or Medicare taxCheck only if none of the line 2 amounts is subject to FICA, then skip to line 6. Governmental employers are not automatically exempt.Click to open the row in the table belowLine 5a: Taxable social security wagesWages, sick pay and taxable fringe benefits subject to social security tax, times 0.124. Stop at $184,500 per employee for 2026; tips go on 5b, not here.Click to open the row in the table belowLine 5b: Taxable social security tipsAll tips employees reported, until wages plus tips reach $184,500, even if you could not withhold the employee tax. Allocated tips go on Form 8027, not here.Click to open the row in the table belowLine 5c: Taxable Medicare wages and tipsAll wages, tips, sick pay and taxable fringe benefits subject to Medicare tax, times 0.029. There is no wage base limit.Click to open the row in the table belowLine 5d: Wages and tips subject to Additional Medicare TaxOnly wages paid to an employee in excess of $200,000 in the calendar year, times 0.009. There is no employer share.Click to open the row in the table belowLine 5e: Total social security and Medicare taxesSum of column 2 on lines 5a to 5d.Click to open the row in the table belowLine 5f: Section 3121(q) Notice and DemandEmployer tax due on unreported tips, only after the IRS issues the notice. The liability accrues on the notice date and must be recorded in Part 2 or on Schedule B for that date.Click to open the row in the table belowLine 6: Total taxes before adjustmentsLines 3, 5e and 5f added together.Click to open the row in the table belowLine 7: Adjustment for fractions of centsRounding difference between the column 2 employee share and what was actually withheld. Positive or negative, and usually small.Click to open the row in the table belowLine 8: Adjustment for sick payNegative adjustment for the employee FICA withheld and deposited by a third-party sick pay payer that is not your agent. No adjustment when the payer is your agent.Click to open the row in the table belowLine 9: Adjustments for tips and group-term life insuranceNegative adjustment for uncollected employee FICA on tips and on group-term life coverage for former employees. Prior-quarter errors are not adjusted here; they go on Form 941-X.Click to open the row in the table belowLine 10: Total taxes after adjustmentsLines 6 through 9 combined.Click to open the row in the table belowLine 11: Qualified small business payroll tax creditThe research credit from Form 8974, which must be attached. It reduces only the employer share of social security tax (up to $250,000 per quarter) and then Medicare tax.Click to open the row in the table belowLine 12: Total taxes after adjustments and nonrefundable creditsLine 10 minus line 11, never below zero. This is the number the deposit rules and the $2,500 test run on, and Part 2 or Schedule B must add to it exactly.Click to open the row in the table belowLine 13: Total deposits for this quarterDeposits made for the quarter plus any overpayment applied from a prior quarter or from a Form 941-X or 944-X filed this quarter.Click to open the row in the table belowLine 14: Balance dueLine 12 minus line 13. If you were required to deposit, a balance here usually means a deposit was missed; pay it electronically.Click to open the row in the table belowLine 15a to 15e: Overpayment, refund election and direct depositNew in 2026: choose apply-to-next-return or refund on 15b and give routing number, account type and account number on 15c to 15e. Refunds are issued by direct deposit; a refund election without account details may be delayed.Click to open the row in the table below

Hover over a line for what goes on it; click to open its row in the table below. On a touch screen, tap the line to jump to the row.

Line 16: Tax liability for the quarter (Part 2)Check one box: de minimis (under $2,500), monthly depositor (enter month 1, 2 and 3 liabilities, totaling line 12), or semiweekly depositor (attach Schedule B). Enter liabilities by the date wages were paid, not by deposit date.Click to open the row in the table belowLine 17: Business closed or stopped paying wagesCheck the box, enter the final date wages were paid and attach a statement naming who keeps the payroll records and where.Click to open the row in the table belowLine 18: Seasonal employerCheck on every Form 941 you file if you do not pay wages in every quarter; otherwise the IRS expects a return for each quarter.Click to open the row in the table belowPart 4: Third-party designeeNames a person (not a firm) and a five-digit PIN the IRS may call about processing questions. The authorization ends one year after the return's due date.Click to open the row in the table belowPart 5: SignatureSigned by the owner, a principal corporate officer, a responsible partner or member, or the fiduciary; a paid preparer completes the preparer block.Click to open the row in the table below

Who files Form 941

If you pay wages subject to federal income tax withholding or social security and Medicare taxes, you file Form 941 for every quarter, starting with the quarter in which you first paid such wages, “even if you have no taxes to report”, until you file a final return. Multiple locations or divisions still file one Form 941 per EIN per quarter.

Not on Form 941: employers the IRS has notified in writing to file Form 944; wages for agricultural labor, which go on Form 943; most household employers, who use Schedule H (Form 1040); backup withholding and withholding on pensions, annuities and gambling winnings, which go on Form 945; and FUTA tax, which goes on Form 940. Seasonal employers skip quarters with no wages but must check line 18 on every Form 941 they do file.

Since the March 2026 revision, aggregate filers identify themselves at the top of page 1: section 3504 agents and certified professional employer organizations (CPEOs) check their box and attach Schedule R (Form 941); other third parties such as non-certified PEOs check “Other Third Party”. CPEOs must generally file Form 941 and Schedule R electronically. Forms 941-SS and 941-PR were discontinued after 2023, so employers in the U.S. territories also file Form 941 (or Form 941 (sp)).

Line by line

Due dates

Deposits

Deposit by EFT, not with the return. All federal tax deposits must be made electronically through EFTPS, IRS Direct Pay or your IRS business tax account (or by a third party, or a same-day wire through the Federal Tax Collection Service). EFTPS takes same-day payments of $1 million or less submitted before 3:00 p.m. Eastern on a business day; larger payments must be submitted by 8:00 p.m. Eastern the day before the due date. New employers that showed a federal tax obligation when they got their EIN are pre-enrolled in EFTPS.

Which schedule. The schedule is set once a year from the lookback period, not by payroll frequency. For 2026 the lookback period is July 1, 2024 through June 30, 2025: $50,000 or less of line 12 taxes in those four quarters makes you a monthly schedule depositor; more than $50,000 makes you semiweekly. If you filed Form 944 in 2024 or 2025, the lookback period is calendar year 2024. A new employer is monthly for its first calendar year. Corrections on Form 941-X do not change the lookback amounts, which stay as originally reported.

Monthly depositors deposit taxes on wages paid during a month by the 15th of the next month. Semiweekly depositors deposit taxes on Wednesday, Thursday and Friday paydays by the following Wednesday, and on Saturday to Tuesday paydays by the following Friday, with at least 3 business days after the period closes. A semiweekly period that straddles two quarters needs two deposits.

$2,500 de minimis rule. If line 12 is under $2,500 for the current quarter or the prior quarter, and you did not incur a $100,000 next-day obligation, you may pay with a timely filed return instead of depositing. If you are not sure the current quarter will stay under $2,500 (and the prior quarter was not under it), deposit on schedule.

$100,000 next-day rule. “If you accumulate $100,000 or more in taxes on any day during a monthly or semiweekly deposit period”, deposit by the next business day, measured before nonrefundable credits. A monthly depositor that hits $100,000 becomes a semiweekly depositor the next day for the rest of the year and all of the next year.

Accuracy of deposits rule. No penalty for a shortfall that does not exceed the greater of $100 or 2% of the required deposit, if it is made up by the makeup date: for monthly depositors, with the return; for semiweekly depositors, by the first Wednesday or Friday on or after the 15th of the following month, or the return due date if earlier.

Penalties

Failure to deposit (IRC 6656). 2% for deposits 1 to 5 days late; 5% for 6 to 15 days late; 10% for 16 or more days late, and also for amounts that should have been deposited but were paid directly to the IRS or with the return; 15% for amounts still unpaid more than 10 days after the first IRS notice or the day you receive notice and demand. “Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability.” Deposits are applied to the most recent liability in the quarter, which can leave an older liability short; within 90 days of an FTD penalty notice you may designate how deposits are applied (Rev. Proc. 2001-58), see the deposit designation request.

“Averaged” FTD penalty. When line 12 is $2,500 or more and the liability record is missing or wrong (a semiweekly depositor who uses line 16 instead of Schedule B, no Schedule B attached, or deposits entered instead of liabilities), the IRS spreads line 12 evenly across the quarter and assesses 2% to 10% on whatever looks late against that average. The IRS may also waive the deposit penalty for an inadvertent failure in the first quarter you had to deposit or the first deposit after a frequency change, if the return was timely and the net worth and size limits of section 7430 are met.

Late filing and late payment (IRC 6651(a)(1) and (a)(2)). 5% of the unpaid tax per month or part month the return is late, up to 25%, and 0.5% per month of tax paid late, also up to 25%; in a month when both apply the filing penalty is reduced by the payment penalty. Interest runs from the due date. Request abatement of assessed penalties or interest on Form 843, not on Form 941 or 941-X, and reply to the penalty notice rather than attaching an explanation to the return.

Trust fund recovery penalty (IRC 6672). “The penalty is 100% of the unpaid trust fund tax.” It reaches any person responsible for collecting, accounting for or paying over withheld income tax and the employee share of FICA who acted willfully, which can include officers, employees, accountants, volunteer directors and anyone with authority over business funds. Using a payroll provider does not shift this; see trust fund recovery penalty.

Corrections

Correct a filed Form 941 on Form 941-X, one per quarter, filed separately from Form 941. Underreported tax is corrected by the due date of the Form 941 for the quarter in which you discover the error, with payment by the time you file, and is then interest free. Overreported tax may be taken as a credit (adjustment process) or refunded (claim process), subject to the 90-day rule at the end of the period of limitations.

Current-quarter rounding, third-party sick pay, uncollected tip FICA and group-term life for former employees are not corrections: they go on lines 7 to 9 of the current return. Errors limited to the employee count on line 1 or to the liability record in Part 2 or on Schedule B are not corrected on Form 941-X at all; for those, a semiweekly depositor files an amended Schedule B (marked “Amended”) in response to an FTD penalty notice, and a monthly depositor may file a Schedule B with monthly totals only.

Wage corrections usually also need a Form W-2c and W-3c; Form 941-X line 3 is a certification that you filed or will file them.

Where it goes wrong

• Liability record by deposit date. “The amounts entered on line 16 are a summary of your monthly tax liability, not a summary of deposits you made.” Enter liability in the month (or on the Schedule B day) wages were paid. A December 31 period end paid January 6 is a January liability, on Schedule B month 1, line 6.
• Totals that do not tie. Part 2 or the Schedule B total must equal line 12 to the cent, or deposits may not be counted as timely. Do not change the record for current-period adjustments or for Form 941-X corrections, and never enter a negative day or month: carry an excess negative adjustment forward as “-0-”.
• Schedule B when you do not need one, or none when you do. Monthly depositors do not attach Schedule B. Semiweekly depositors must, and an employer that became semiweekly during the quarter (for example on a $100,000 day) completes Schedule B for the entire quarter and checks the third box on line 16. Don't complete Schedule B if line 12 is under $2,500.
• Quarterly returns that do not reconcile to the W-3. “The IRS matches amounts reported on your four quarterly Forms 941 with Form W-2 amounts totaled on your yearly Form W-3”: federal income tax withheld, social security wages, social security tips and Medicare wages and tips. Gaps produce a combined annual wage reporting (CAWR) inquiry such as Letter 98C or Letter 99C; see CAWR reconciliation. FICA tax on Form 941 should be roughly twice the W-3 employee amounts, except for Additional Medicare Tax, which has no employer share. Keep the reconciliation.
• Wrong EIN. Use the EIN exactly as assigned, never an SSN or ITIN, and the legal name used to obtain it. If a different EIN (including a prior owner's) was used on any Form 941 for the year, report it in box h of Form W-3. An e-filed return without a valid EIN is not accepted.
• Backup withholding on Form 941. Backup withholding on 1099 payments belongs on Form 945, deposited separately. Only taxes and withholding reported on Forms W-2 belong on Form 941, so anything else on line 3 breaks the W-3 reconciliation.
• Relying on the payroll provider. The employer stays responsible for filing and depositing when a third party fails, except for wages covered by a CPEO contract.

Inside the IRS: what happens to Form 941

How a 941 is processed. Paper returns go through code and edit before data entry (IRM 3.11.13). “A return must contain specific items before it is considered processable”: an EIN, a legible name, a valid tax period, legible tax data and a signature. Returns with two EINs, more than one quarter combined, or no signature are unprocessable, and the IRS writes to you before it will post the return. For 2026, IRM 21.7.2 notes that “Beginning in processing year 2026, certain employment tax returns have the new Aggregate Return Filers Only section” for section 3504 agents, CPEOs and other third parties.

Your deposit record is checked against your deposits. Monthly depositors complete line 16; semiweekly depositors file Schedule B. When the record of federal tax liability (ROFTL) is “incomplete or illegible,” or its total does not match the return, the system sends CP 207 or CP 207L to get a valid schedule. If you do not fix it, the IRS spreads the tax evenly and figures the deposit penalty on that basis: averaging is used when “the ROFTL is missing, incomplete, blank, or has negative amounts.” “A negative entry will invalidate the ROFTL schedule,” because “it is impossible to have a negative liability.” A manually proposed averaged penalty comes on Letter 313C.

Deposit penalties as the IRM applies them. IRC 6656 uses four tiers: 2%, 5%, 10% and 15% (IRM 20.1.4.7.1). The 10% tier also covers “10 percent for required deposits not paid by EFT.” IRM 21.7.2 lists the triggers: deposits made late, short, “made directly to the IRS (e.g., sending a check with a tax return or paying by credit card),” or not by EFT. The small-employer exception applies only when you pay in full with a timely return.

Filing and payment penalties. “Regulations prohibit an extension of time to file employment tax returns.” But “no penalty for filing late is asserted if the taxpayer paid (For example, via Federal tax deposits, and so on) 100 percent of the tax required to be paid on or before the due date for payment.” Employment tax returns are also “not subject to the minimum penalty for filing late” that applies to income tax returns (IRM 20.1.2.3.9). If deposits fully pay the tax, “The return due date for Form 941 is extended 10 days.”

Year end: CAWR. The IRS shares your 941 totals with SSA and compares the four quarters to your W-2s. A mismatch leads to Letter 99C or Letter 98C (see Form W-2). Make sure every line 16 or Schedule B total equals line 12, and fix a wrong quarter on Form 941-X before the W-3 goes out.

Notices about this form

• Letter 98C (CAWR: Form 941 more than W-3)
• Letter 99C (CAWR: W-3 more than Form 941)
• Letter 313-C (averaged deposit penalty, schedule needed)

Questions people ask about Form 941

Other employer, withholding and ACA forms

Payroll and employment tax returns: W-4 · 941-X · 944 · 943 · 940 · W-2 · W-3 · W-2c · 8027
Withholding returns: 945 · 1042
Health coverage (ACA) returns: 1095-C · 1094-C · 1095-B · 1094-B
Paper transmittal: 1096
All of them on one table · Information returns (1099 series)

Sources: Form 941 (Rev. March 2026) and Instructions for Form 941 (Rev. March 2026); draft Form 941 (Rev. March 2027); Schedule B (Form 941) (Rev. March 2024) and Instructions (Rev. June 2025); Pub 15 (2026), sections 11 to 13; IRM 20.1.2 (IRC 6651), IRM 20.1.4 (IRC 6656, rev. April 17, 2026), IRM 5.7.3 (IRC 6672).