Userid: ________ DTD INSTR04 Leading adjust: 0% ❏ Draft ❏ Ok to Print
PAGER/SGML Fileid: [Link] (16-Feb-2007) (Init. & date)
Page 1 of 4 Instructions for Form 941-M 14:33 - 16-FEB-2007
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Department of the Treasury
Instructions for Form 941-M Internal Revenue Service
(Rev. January 2007)
Employer’s MONTHLY Federal Tax Return
Section references are to the Internal Revenue Code unless stops working for you before the end of the year, furnish Form
otherwise noted. W-2 to the employee any time after employment ends but no
later than January 31 of the following year. However, if the
employee asks you for Form W-2, furnish the completed form
What’s New within 30 days after the request or the final wage payment,
whichever is later. Send Copy A of all Forms W-2, Wage and
Social security wage base for 2007. Stop withholding social Tax Statement, issued for the year with a Form W-3,
security tax after an employee reaches $97,500 in taxable Transmittal of Wage and Tax Statements, filed on paper, to the
wages. (There is no limit on the amount of wages subject to Social Security Administration (SSA) by the last day of
Medicare tax.) February. If you file Forms W-2 electronically, file them with
SSA by the last day of March.
Reminders If you file a final return on Form 941-M, you must furnish
! Form W-2 to your employees by the last day of the
CAUTION month in which the final Form 941-M is due. File Copy A
Telephone help. If you have questions about completing Form
941-M, call the IRS toll free at 1-800-829-4933 on Monday of Forms W-2 and Form W-3 with the Social Security
through Friday from 7 a.m. to 10 p.m. local time (Alaska and Administration by the last day of the month following the month
Hawaii follow Pacific time). your final Form 941-M was due. See the Instructions for Forms
W-2 and W-3 for details
Penalties and interest. There are penalties for filing a return
General Instructions late and paying or depositing taxes late, unless there is
reasonable cause. There are also penalties for failure to: (a)
Purpose of form. Use Form 941-M to report monthly: (a) furnish Forms W-2 to employees and file copies with the SSA
federal income tax you withheld from wages, tips, distributions and (b) deposit taxes when required. (Do not attach an
from nonqualified pension plans (including nongovernmental explanation of why the return is late to Forms W-2 sent to the
section 457(b) plans), supplemental unemployment compen- SSA.) In addition, there are penalties for willful failure to file
sation benefits, and third-party payments of sick pay; and (b) returns and pay taxes when due and for filing false returns or
social security and Medicare taxes. If you report just one kind of submitting bad checks. Interest is charged on taxes paid late at
tax, fill in only the lines that apply. the rate set by law. See Pub. 15 (Circular E) for additional
Form 941-M is not for general public use and should information.
!
CAUTION
only be filed directly with an IRS compliance
representative. A trust fund recovery penalty may apply if federal
Who must file. File Form 941-M if you must report federal
! income, social security, and Medicare taxes that must
CAUTION be withheld are not withheld or are not paid. This
income taxes withheld, social security taxes, and Medicare penalty is the full amount of any unpaid trust fund tax. This
taxes on a monthly basis with an IRS compliance penalty may apply to you if these unpaid taxes cannot be
representative. The IRS may require monthly returns on Form immediately collected from the employer or business. The trust
941-M and payments of tax from any employer who has not fund recovery penalty may be imposed on all persons who are
complied with the requirements for the filing of returns or the determined by the IRS to be responsible for collecting,
paying or depositing of taxes reported on quarterly or annual accounting for, and paying over these taxes, and who acted
returns. Do not file monthly returns unless you received written willfully in not doing so.
notification from the IRS to do so. A preaddressed return
A responsible person can be an officer or employee of a
envelope and blank Form 941-M will be mailed to you before
corporation, a partner or employee of a partnership, an
your first monthly return is due and for each month thereafter. If
accountant, a volunteer director/trustee, or any employee of a
you no longer expect to pay amounts subject to tax reportable
sole proprietorship. A responsible person also may include one
on Form 941-M, check the box on line 16 and enter the date
who signs checks for the business or otherwise has authority to
you last paid wages.
cause the spending of business funds. Willfully means
When to file. Form 941-M for any month is due by the 15th voluntarily, consciously, and intentionally.
day of the following month. If the due date for filing a return falls
on a Saturday, Sunday, or legal holiday, you may file the return Related publications. Pub. 15 (Circular E) explains the rules
on the next business day. for withholding, paying, depositing, and reporting federal
income tax, social security and Medicare taxes, and federal
Where to file. File Form 941-M, with any payment due, using unemployment (FUTA) tax on wages. See Pub. 15-A,
the preaddressed envelope furnished to you. Keep a duplicate Employer’s Supplemental Tax Guide, for information on sick
Form 941-M for your records. pay paid by third-party payers. Pub. 51 (Circular A), Agricultural
Form W-5. Each eligible employee wishing to receive any Employer’s Tax Guide, explains rules for employers of
advance earned income credit (EIC) payments must give you a farmworkers. These publications are available by calling
completed Form W-5, Earned Income Credit Advance Payment 1-800-TAX-FORM (1-800-829-3676). See Pub. 15 (Circular E)
Certificate. Your requirement to notify certain employees about for additional methods of obtaining forms and publications.
the EIC can be met by giving each eligible employee Notice Reconciliation of Forms 941-M and W-3. Certain amounts
797, Possible Federal Tax Refund Due to the Earned Income reported on the monthly Forms 941-M for the year should agree
Credit (EIC). See section 10 of Pub. 15 (Circular E) and Pub. with the Form W-2 totals reported on Form W-3. The amounts
596, Earned Income Credit (EIC), for more information. that should agree are: federal income tax withholding, social
Form W-2. By January 31, furnish Forms W-2 to employees security wages, social security tips, Medicare wages and tips,
who worked for you during the previous year. If an employee and the advance earned income credit (EIC).
Cat. No. 39535W
Page 2 of 4 Instructions for Form 941-M 14:33 - 16-FEB-2007
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
If the totals do not agree, the IRS may require you to explain section 5 in Pub. 15 (Circular E) for information on types of
the differences and correct any errors. See section 12 of wages subject to Medicare tax. If none of the payments are
Pub. 15 (Circular E) for details. subject to Medicare tax, enter “-0-.”
Include all tips your employees reported during the month,
even if you were not able to withhold the employee tax (1.45%).
Specific Instructions Report the uncollected employee’s share of Medicare tax on
line 7c. Also see section 6 of Pub. 15 (Circular E).
Line 7 — TAX ADJUSTMENTS. Enter tax amounts on lines
Part 1: Answer these questions for this 7a – 7g that result from current or prior period adjustments. Use
parentheses (if possible) to show an adjustment that decreases
month. the total taxes shown on line 6. Otherwise, use a minus sign.
Line 1 — Number of employees. For March, June, Do not enter an amount on line 7f or line 7g unless the IRS has
September, and December, report the number of employees on sent you a notice instructing you to do so. See the Instructions
your payroll for the pay period that includes the 12th of the for Form 941 for more information.
month. Leave line 1 blank for all other months. Do not include Current period adjustments. In certain cases, amounts
household employees, employees in nonpay status during the reported as social security and Medicare taxes on lines 5a – 5c
pay period, pensioners, or active members of the Armed must be adjusted to arrive at your correct tax liability. See
Forces. An entry of 250 or more on line 1 indicates you must file section 13 of Pub. 15 (Circular E) for information on the
Forms W-2 electronically. Call the SSA at 1-800-772-6270 or following adjustments:
access the SSA website at [Link]/employer for • Fractions-of-cents adjustment.
more information on electronic filing of Forms W-2. • Adjustment for the employee share of social security and
Line 2 — Wages, tips, and other compensation. Enter Medicare taxes withheld by a third-party sick pay payer.
amounts on line 2 that would also be included in box 1 of your • Adjustment for the uncollected employee share of social
employees’ Forms W-2. See the Instructions for Forms W-2 and security and Medicare taxes on tips.
W-3 for details. • Adjustment for the employee share of social security and
If you get timely notice from your insurance carrier con- Medicare taxes on group-term life insurance premiums paid for
cerning the amount of third-party sick pay it paid to your former employees.
employees, include the sick pay on line 2. Prior period adjustments. Use lines 7d – 7g to correct
Line 3 — Total income tax withheld from wages, tips, and errors in taxes reported on an earlier return, including errors
other compensation. Enter the federal income tax you from a previous month of the current quarter. For example, if
withheld (or were required to withhold) on wages, tips, taxable you are correcting an error in social security and Medicare
fringe benefits, sick pay, other compensation, and supplemental taxes reported on your July 2007 Form 941-M and you found
unemployment compensation benefits. Also include here any the error in September 2007, report the adjustment using line
excise taxes you were required to withhold on golden parachute 7e of your September 2007 Form 941-M.
payments (section 4999). If you report both an underpayment and an overpayment,
Line 4 — If no wages, tips, and other compensation are show only the net difference.
subject to social security or Medicare tax. If no wages, tips,
You must explain any prior period adjustments on an
and other compensation on line 2 are subject to social security
attached Form 941c, Supporting Statement To Correct
or Medicare tax, check the box on line 4. If this question does
Information.
not apply to you, leave the box blank. For more information
about exempt wages, see section 15 of Pub. 15 (Circular E) Line 9 — Advance earned income credit (EIC) payments
and section 4 of Pub. 15-A, Employer’s Supplemental Tax made to employees. Enter advance EIC payments made to
Guide. employees. Your eligible employees may elect to receive part of
Line 5a — Taxable social security wages. Enter the total the EIC as an advance payment. Eligible employees who have
wages subject to social security taxes you paid to your a qualifying child must give you a completed Form W-5 stating
employees during the month. Also include any sick pay and they qualify for the EIC. Once the employee gives you a signed
taxable fringe benefits subject to social security taxes. Enter the and completed Form W-5, you must make the advance EIC
amount before deductions. Do not include tips on this line. Stop payments. Advance EIC payments are generally made from
reporting for any employee whose wages (including tips) reach withheld federal income tax and employee and employer social
$97,500 for 2007. However, continue to withhold income and security and Medicare taxes. See section 10 of Pub. 15
Medicare taxes for the whole year on wages and tips even (Circular E) and Pub. 596 for more information on advance EIC
when the limit of $97,500 is reached. See the Line 5c payments and eligibility requirements.
instructions for Medicare wages and tips. If the amount of your advance EIC payments exceeds your
Line 5b — Taxable social security tips. Enter all tips your total taxes (line 8) for the month, you may claim a refund of the
employees reported during the month until tips and wages for overpayment or elect to have the credit applied to your return
an employee reach $97,500 in 2007. Do this even if you were for the following month. Provide a statement with your return
not able to withhold the employee tax (6.2%). Report the identifying the amount of excess payment(s) and the pay
uncollected employee’s share of social security tax on line 7c. period(s) in which it was paid. See section 10 of Pub. 15
Also see section 6 of Pub. 15 (Circular E). (Circular E).
An employee must report to you cash tips, including tips you Line 12 — Balance due. If line 10 is more than line 11, write
paid the employee for charge customers, totaling $20 or more the difference in line 12. Otherwise, see Line 13 — Over-
in a month by the 10th day of the next month. The employee payment below. You do not have to pay if line 12 is under $1.
may use Form 4070, Employee’s Report of Tips to Employer, or
If you fail to make deposits as required and instead pay
give you a written statement.
Do not include allocated tips on this line. Instead, report
!
CAUTION
the taxes with Form 941-M, you may be subject to a
penalty.
them on Form 8027, Employer’s Annual Information Return of
Tip Income and Allocated Tips. Allocated tips are not reportable Line 13 — Overpayment. If line 11 is more than line 10, write
on Form 941-M and are not subject to withholding of federal the difference in line 13. Never make an entry in both lines 12
income, social security, or Medicare tax. and 13.
Line 5c — Taxable Medicare wages and tips. Report all If you deposited more than the correct amount for a month,
wages and tips subject to Medicare tax. Also include any sick you can have the overpayment refunded (applies only to March,
pay and taxable fringe benefits subject to Medicare tax. See June, September, and December Forms 941-M) or applied to
-2-
Page 3 of 4 Instructions for Form 941-M 14:33 - 16-FEB-2007
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
your next return. Show any amount applied in the Record of
Federal Tax Liability and Deposits on your next return. Part 4: May we speak with your
If line 13 is under $1, we will send a refund or apply it to your
next return only on written request. third-party designee?
If you want to allow an employee, a paid tax preparer, or
another person to discuss your Form 941-M with the IRS, check
Part 2: Tell us about your tax liability the “Yes” box in Part 4. Then tell us the name and the five-digit
personal identification number (PIN) of the specific person to
and deposit schedule for this month. speak with — not the name of the firm who prepared your tax
Special deposit account. Do not make deposits using the return. The designee may choose any five numbers as his or
Electronic Federal Tax Payment System (EFTPS) or Form her PIN.
8109, Federal Tax Deposit Coupon, and do not complete line By checking “Yes,” you authorize the IRS to talk to the
14, Record of Federal Tax Liability and Deposits, if you are person you named (your designee) about any questions we
required to have a special deposit account under section may have while we process your return. You also authorize
7512(b). If you have received, by hand delivery, Form 2481, your designee to:
Notice To Make Special Deposits of Taxes, you must deposit in • give us any information that is missing from your return,
a separate bank account any taxes collected or required by law • call us for information about processing your return, and
to be collected. Your deposit must be made not later than the • respond to certain IRS notices you have shared with your
end of the second banking day after any taxes were required to designee about math errors and return preparation. IRS will not
be collected from your employees. The taxes deposited must send notices to your designee.
be kept in the account until paid with any employer tax that may
be due. The account must be designated as a special fund in You are not authorizing your designee to bind you to
trust for the United States, payable to the “United States anything (including additional tax liability) or to otherwise
Treasury” by you as trustee. For the definition of the term represent you before the IRS. If you want to expand your
“bank,” see Form 2481. designee’s authorization, see Pub. 947, Practice Before the IRS
and Power of Attorney.
Federal tax deposits. If you are not required to have a special
deposit account, in general, you must deposit your tax liability at The authorization will automatically expire 1 year from the
an authorized financial institution with Form 8109 or by using due date for filing your Form 941-M. If you or your designee
EFTPS. For more information on the deposit rules and the want to terminate the authorization, write to the IRS office for
electronic deposit requirements, see section 11 of Pub. 15 your locality using the “Without a payment” address under
(Circular E). Where Should You File on page 4 in the Instructions for Form
941.
Line 14 — Record of Federal Tax Liability and Deposits. If
you must deposit taxes using the Federal Tax Deposit System,
complete both columns of the record. In the tax liability column,
include federal income tax withheld plus both the employer and Part 5: Sign here—
employee shares of social security and Medicare taxes minus Who Must Sign the Form 941-M?
advance EIC payment (if any) for each date of payment Form 941-M must be signed as follows.
(payday). Enter each deposit amount in the numbered entry
space corresponding to the date of deposit. • Sole proprietorship — The individual who owns the
Line 14a — Total tax liability for the month. The amount of business.
this line must equal line 10 (Total taxes after adjustment for • Corporation (including an LLC treated as a
advance EIC). Otherwise, you may be subject to a penalty for corporation) — The president, vice president, or other
failure to make deposits of taxes. principal officer.
• Partnership (including an LLC treated as a partnership)
or unincorporated organization — A responsible and duly
Part 3: Tell us about your business. authorized member or officer having knowledge of its affairs.
In Part 3, answer only those questions that apply to your • Single member limited liability company (LLC) treated as
business. If a question does not apply, leave it blank and go to a disregarded entity — The owner of the limited liability
Part 4. company (LLC).
Line 16—If Your Business Has Closed . . . • Trust or estate — The fiduciary.
If you go out of business or stop paying wages, you must file a Form 941-M may also be signed by a duly authorized agent
final return. To tell IRS a particular Form 941 is your final return, of the taxpayer if a valid power of attorney has been filed.
check the box on line 16 and enter the date you last paid wages
in the space provided.
Line 17—If You Are a Seasonal Employer . . . Part 6: For Paid Preparers Only
If you hire employees seasonally — such as for summer or (optional)
winter only — check the box on line 17. Checking the box tells You may complete Part 6 if you were paid to prepare Form
IRS not to expect Form 941-M from you every month because 941-M and are not an employee of the filing entity. Sign in the
you have not paid wages regularly. However, you must check space provided and give the filer a copy of the return in addition
the box every time you file a Form 941-M. Also, be sure to to the copy to be filed with the IRS. Do not complete Part 6 if
check the box in the upper right corner of page 1 of Form you are filing the return as a reporting agent and have a valid
941-M that corresponds to the month reported. Form 8655, Reporting Agent Authorization, on file with the IRS.
-3-
Page 4 of 4 Instructions for Form 941-M 14:33 - 16-FEB-2007
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
the form displays a valid OMB control number. Books or
How to Order Forms and Publications records relating to a form or its instructions must be retained as
from the IRS long as their contents may become material in the
administration of any Internal Revenue law.
Generally, tax returns and return information are confidential,
Call 1-800-829-3676. as required by section 6103. However, section 6103 allows or
requires the IRS to disclose or give the information shown on
your tax return to others as described in the Code. For
Visit the IRS website at [Link]. example, we may disclose your tax information to the
Department of Justice for civil and criminal litigation, and to
cities, states, and the District of Columbia for use in
administering their tax laws. We may also disclose this
information to other countries under a tax treaty, to federal and
state agencies to enforce federal nontax criminal laws, or to
Privacy Act and Paperwork Reduction federal law enforcement and intelligence agencies to combat
Act Notice terrorism.
We ask for the information on Form 941-M to carry out the The time needed to complete and file Form 941-M will vary
Internal Revenue laws of the United States. We need it to figure depending on individual circumstances. The estimated average
and collect the right amount of tax. Subtitle C, Employment time is: Recordkeeping, 14 hrs., 35 min.; Learning about the law
Taxes, of the Internal Revenue Code imposes employment or the form, 1 hr., 0 min.; Preparing, copying, assembling, and
taxes on wages, including income tax withholding. Form 941-M sending the form to the IRS, 1 hr., 16 min. If you have
is used to determine the amount of the taxes you owe. Section comments concerning the accuracy of these time estimates or
6011 requires you to provide the requested information if the suggestions for making Form 941-M simpler, we would be
tax is applicable to you. Section 6109 requires you to provide happy to hear from you. You can write to: Internal Revenue
your employer identification number (EIN). If you fail to provide Service, Tax Products Coordinating Committee,
this information in a timely manner, you may be subject to SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, IR-6406,
penalties and interest. If you do not file this information, or Washington, DC 20224.
provide incomplete or fraudulent information, you may be Do not send Form 941-M to this address. Instead, use the
subject to penalties and/or criminal prosecution. preaddressed envelope furnished to you.
You are not required to provide the information requested on
a form that is subject to the Paperwork Reduction Act unless
-4-