Tell us the number of employees on your payroll for the pay period including March 12, June 12, September 12, or December 12 for the quarter indicated at the top of the return. Do not include:

Enter amounts on line 2 that would also be included in box 1 of your employees' Forms W-2. Include sick pay paid by a third party if you were given timely notice of the payments and transferred liability for the employees' taxes. See the Instructions for Forms W-2 and W-3 for details.

If you are a third-party payer of sick pay, do not include sick pay that you paid to policyholders' employees here if you gave the policyholders timely notice of the payments.

Enter the federal income tax you withheld (or were required to withhold) from your employees on this quarter's wages, tips, taxable fringe benefits, and supplemental unemployment compensation benefits. Do not include any income tax withheld by a third-party payer of sick pay even if you reported it on Form W-2. You will reconcile this difference on Form W-3. Also include here any excise taxes you were required to withhold on golden parachute payments (section 4999).

If you are a third-party payer of sick pay, enter the federal income tax you withheld (or were required to withhold) on third-party sick pay here.

If no wages, tips, and other compensation on line 2 are subject to social security or Medicare tax, check the box on line 4. If this question does not apply to you, leave the box blank. For more information about exempt wages, see section 15 of Pub. 15 (Circular E) and section 4 of Pub. 15-A, Employer's Supplemental Tax Guide.

Add the total federal income tax withheld from wages, tips, and other compensation and total social security and Medicare taxes before adjustments.

Enter tax amounts on lines 7a-7g that result from current or prior period adjustments. Use a minus sign (if possible) to show an adjustment that decreases the total taxes shown on line 6. Do not enter an amount on line 7f or line 7g unless the IRS has sent you a notice instructing you to do so.

Prior period adjustments.   Use lines 7d-7g to adjust amounts reported on previous returns. If you need to report both an increase and a decrease for the same line, show only the difference.

  Adjustments you report here change your tax liability and your tax deposits. You will have to take these adjustments into account on line 15 as Tax liability: Month 1; Month 2; Month 3 or on Schedule B (Form 941). You must explain any prior period adjustments that you make on Form 941c, Supporting Statement to Correct Information, or in an equivalent statement.

  Form 941c is not an amended return but is a statement providing the necessary information and certifications for adjustments shown on lines 7d-7g. Do not file Form 941c separately from Form 941. See also section 13 of Pub. 15 (Circular E).

7d. Current year's income tax withholding.   Enter adjustments for the current year's federal income tax withholding. For example, if you made a mistake when withholding federal income tax from wages that were paid in earlier quarters of the same calendar year, adjust it here. However, see the CAUTION below for adjustment of a prior year's “administrative error” also shown on line 7d.

  You cannot adjust or claim a refund or credit for any overpayment of federal income tax that you withheld or deducted from your employees in a previous year because employees use the amount shown on Form W-2 as a credit when they file their income tax returns.

  

Do not adjust federal income tax withholding for quarters in previous years unless you do it to correct an administrative error. An administrative error happened if the amount you entered on Form 941 was not the same amount you actually withheld. For example, when the total amount of federal income tax actually withheld was not reported correctly on Form 941 because of a mathematical or transposition error, the difference is an administrative error. The administrative error adjustment corrects the amounts reported on the Form 941 to agree with the amount actually withheld from the employee. Remember to attach an explanation for the adjustment.

7e. Prior quarters' social security and Medicare taxes.   Enter adjustments for prior quarters' social security and Medicare taxes. For example, if you made a mistake when reporting social security and Medicare taxes on previously filed Forms 941, adjust it here. If you need to report both an underpayment and an overpayment, show only the net difference.

  

If you are adjusting an employee's social security wages, social security tips, or Medicare wages and tips for a prior year, you must also file Form W-2c, Corrected Wage and Tax Statement, and Form W-3c, Transmittal of Corrected Wage and Tax Statements.

7f. Special additions to federal income tax.   This line is reserved for employers with special circumstances. Use this line only if the IRS has sent you a notice instructing you to do so. You must attach Form 941c explaining the tax increase.

7g. Special additions to social security and Medicare.   This line is reserved for employers with special circumstances. Use this line only if the IRS has sent you a notice instructing you to do so. You must attach Form 941c explaining the tax increase.

7h. TOTAL ADJUSTMENTS.   Combine all adjustments shown on lines 7a through 7g and enter the result here.

Combine the amounts shown on lines 6 and 7h and enter the result here.

Enter the amount of the advance earned income credit (EIC) payments that you made to your employees. Eligible employees may choose to receive part of the EIC as an advance payment. Those who expect to have a qualifying child must give you a completed Form W-5 stating they expect to qualify for the EIC. Once the employee gives you a signed and completed Form W-5 you must make the advance EIC payments starting with the employee's next wage payment. Advance EIC payments are generally made from withheld federal income tax and employee and employer social security and Medicare taxes. See section 10 of Pub. 15 (Circular E) and Pub. 596, Earned Income Credit.

If the amount of your advance EIC payments is more than your total taxes after adjustments (line 8) for the quarter, you may claim a refund of the overpayment or elect to have the credit applied to your return for the next quarter. Attach a statement to your Form 941 identifying the amount of excess payments and the pay periods in which you paid it. See section 10 of Pub. 15 (Circular E).

Calculate your total taxes as shown below.

Enter your deposits for this quarter, including any deposits that you were required to make to cover prior period liabilities resulting from adjustments shown on line 7. Also include in the amount shown any overpayment from a previous period that you applied to this return.

If line 10 is more than line 11, write the difference in line 12. Otherwise, see Overpayment below.

You do not have to pay if line 12 is under $1. Gen- erally, you should have a balance due only if your total taxes after adjustment for advance EIC for the quarter (line 10) are less than $2,500. (However, see section 11 of Pub. 15 (Circular E) for information about payments made under the accuracy of deposits rule.)

You may pay the amount shown on line 12 using EFTPS, or a check, money order, or credit card. Do not use a credit card to pay taxes that were required to be deposited. For more information on paying your taxes with a credit card, visit the IRS website at www.irs.gov and type “e-pay” in the Search box.

If you pay by EFTPS or credit card, file your return using the “Without a payment” address on page 4 under Where should you file? and do not file Form 941-V, Payment Voucher.

If line 10 is $2,500 or more and you have deposited all taxes when due, line 12 (“Balance due”) should be zero.

If line 11 is more than line 10, write the difference in line 13.
Never make an entry in both lines 12 and 13.

If you deposited more than the correct amount for a quarter, you can choose to have the IRS either refund the overpayment or apply it to your next return. Check the appropriate box in line 13. If you do not check either box, we will automatically refund the overpayment. We may apply your overpayment to any past due tax account that is shown in our records under your EIN.

If line 13 is under $1, we will send a refund or apply it to your next return only if you ask us in writing to do so.

You must fill out both pages of Form 941 and sign it on the second page. Failure to do so may delay processing of your return.

In the spaces provided, write the two-letter U.S. Postal Service abbreviation for the bank branch in the state where you deposit your taxes using Form 8109 or initiate EFTPS transfers. IRS uses the state shown to determine banking days for purposes of deposit due dates. Official state holidays for the state shown are not counted as banking days. If you deposit in multiple states, enter “MU” in the spaces provided.

When you deposit in multiple states, IRS cannot determine what portion of your liability was affected by a state holiday and may propose a deposit penalty for one or more of the states where you made deposits. If you receive a notice and your deposit due date was extended because of a state bank holiday, respond to the notice citing the state holiday and applicable deposit amount.

If you go out of business or stop paying wages, you must file a final return. To tell IRS that a particular Form 941 is your final return, check the box on line 16 and enter the date you last paid wages in the space provided. For additional filing requirements, see If your business has closed... on page 2.

If you hire employees seasonally—such as for summer or winter only—check the box on line 17. Checking the box tells IRS not to expect four Forms 941 from you throughout the year because you have not paid wages regularly.

IRS will mail you two forms once a year after March 1. Generally, we will not ask about unfiled returns if you file at least one return showing tax due each year. However, you must check the box every time you file a Form 941.

Also, when you fill out Form 941, be sure to check the box on the top of the form that corresponds to the quarter reported.