| Instructions for Form 941-M |
2006 Tax Year |
This is archived information that pertains only to the 2006 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
Part 1:Answer these questions for this month.
Line 1—Number of employees.
For March, June, September, and December, report the number of employees on your payroll for the pay period that includes
the 12th of the month.
Leave line 1 blank for all other months. Do not include household employees, employees in nonpay status during the pay period,
pensioners, or active
members of the Armed Forces. An entry of 250 or more on line 1 indicates you must file Forms W-2 electronically. Call the
SSA at 1-800-772-6270 or
access the SSA website at
www.socialsecurity.gov/employer for more information on electronic filing of Forms W-2.
Line 2—Wages, tips, and other compensation.
Enter amounts on line 2 that would also be included in box 1 of your employees' Forms W-2. See the Instructions for
Forms W-2 and W-3 for details.
If you get timely notice from your insurance carrier con- cerning the amount of third-party sick pay it paid to your
employees, include the sick
pay on line 2.
Line 3—Total income tax withheld from wages, tips, and other compensation.
Enter the federal income tax you withheld (or were required to withhold) on wages, tips, taxable fringe benefits,
sick pay, other compensation, and
supplemental unemployment compensation benefits. Also include here any excise taxes you were required to withhold on golden
parachute payments
(section 4999).
Line 4—If no wages, tips, and other compensation are subject to social security or Medicare tax.
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.
Line 5a—Taxable social security wages.
Enter the total wages subject to social security taxes you paid to your employees during the month. Also include
any sick pay and taxable fringe
benefits subject to social security taxes. Enter the amount before deductions. Do not include tips on this line. Stop reporting
for any employee whose
wages (including tips) reach $97,500 for 2007. However, continue to withhold income and Medicare taxes for the whole year
on wages and tips even when
the limit of $97,500 is reached. See the Line 5c instructions for Medicare wages and tips.
Line 5b—Taxable social security tips.
Enter all tips your employees reported during the month until tips and wages for an employee reach $97,500 in 2007.
Do this even if you were not
able to withhold the employee tax (6.2%). Report the uncollected employee's share of social security tax on line 7c. Also
see section 6 of Pub. 15
(Circular E).
An employee must report to you cash tips, including tips you paid the employee for charge customers, totaling $20
or more in a month by the 10th
day of the next month. The employee may use Form 4070, Employee's Report of Tips to Employer, or give you a written statement.
Do not include allocated tips on this line. Instead, report them on Form 8027, Employer's Annual Information Return
of Tip Income and Allocated
Tips. Allocated tips are not reportable on Form 941-M and are not subject to withholding of federal income, social security,
or Medicare tax.
Line 5c—Taxable Medicare wages and tips.
Report all wages and tips subject to Medicare tax. Also include any sick pay and taxable fringe benefits subject to
Medicare tax. See section 5 in
Pub. 15 (Circular E) for information on types of wages subject to Medicare tax. If none of the payments are 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%). 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 7a-7g that result from current or prior period adjustments. Use parentheses (if possible)
to show an adjustment
that decreases the total taxes shown on line 6. Otherwise, use a minus sign. Do not enter an amount on line 7f or line 7g unless the IRS
has sent you a notice instructing you to do so. See the Instructions for Form 941 for more information.
Current period adjustments.
In certain cases, amounts reported as social security and Medicare taxes on lines 5a-5c must be adjusted to arrive
at your correct tax
liability. See section 13 of Pub. 15 (Circular E) for information on the following adjustments:
-
Fractions-of-cents adjustment.
-
Adjustment for the employee share of social security and Medicare taxes withheld by a third-party sick pay payer.
-
Adjustment for the uncollected employee share of social security and Medicare taxes on tips.
-
Adjustment for the employee share of social security and Medicare taxes on group-term life insurance premiums paid for former
employees.
Prior period adjustments.
Use lines 7d-7g to correct errors in taxes reported on an earlier return, including errors from a previous month of
the current quarter. For
example, if you are correcting an error in social security and Medicare taxes reported on your July 2007 Form 941-M and you
found the error in
September 2007, report the adjustment using line 7e of your September 2007 Form 941-M.
If you report both an underpayment and an overpayment, show only the net difference.
You must explain any prior period adjustments on an attached Form 941c, Supporting Statement To Correct Information.
Line 9—Advance earned income credit (EIC) payments made to employees.
Enter advance EIC payments made to employees. Your eligible employees may elect to receive part of the EIC as an advance
payment. Eligible
employees who have a qualifying child must give you a completed Form W-5 stating they qualify for the EIC. Once the employee
gives you a signed and
completed Form W-5, you must make the advance EIC payments. 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 for more information on advance
EIC payments and
eligibility requirements.
If the amount of your advance EIC payments exceeds your total taxes (line 8) for the month, you may claim a refund
of the overpayment or elect to
have the credit applied to your return for the following month. Provide a statement with your return identifying the amount
of excess payment(s) and
the pay period(s) in which it was paid. See section 10 of Pub. 15 (Circular E).
Line 12—Balance due.
If line 10 is more than line 11, write the difference in line 12. Otherwise, see Line 13—Over- payment below. You do not have to
pay if line 12 is under $1.
If you fail to make deposits as required and instead pay the taxes with Form 941-M, you may be subject to a penalty.
Line 13—Overpayment.
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 month, you can have the overpayment refunded (applies only to
March, June, September, and
December Forms 941-M) or applied to your next return. Show any amount applied in the Record of Federal Tax Liability and Deposits
on your next return.
If line 13 is under $1, we will send a refund or apply it to your next return only on written request.
Part 2:Tell us about your tax liability and deposit schedule for this month.
Special deposit account.
Do not make deposits using the Electronic Federal Tax Payment System (EFTPS) or Form 8109, Federal Tax Deposit Coupon, and do not
complete line 14, Record of Federal Tax Liability and Deposits, if you are required to have a special deposit account under
section 7512(b). If
you have received, by hand delivery, Form 2481, Notice To Make Special Deposits of Taxes, you must deposit in a separate bank
account any taxes
collected or required by law to be collected. Your deposit must be made not later than the end of the second banking day after
any taxes were required
to be collected from your employees. The taxes deposited must 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 trust for the United States, payable to the “ United States Treasury” by you as trustee. For the
definition of the term “ bank,” see Form 2481.
Federal tax deposits.
If you are not required to have a special deposit account, in general, you must deposit your tax liability at an authorized
financial institution
with Form 8109 or by using EFTPS. For more information on the deposit rules and the electronic deposit requirements, see section
11 of Pub. 15
(Circular E).
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 employee shares of social security and Medicare taxes minus advance EIC payment
(if any) for each date
of payment (payday). Enter each deposit amount in the numbered entry space corresponding to the date of deposit.
Line 14a—Total tax liability for the month.
The amount of this line must equal line 10 (Total taxes after adjustment for advance EIC). Otherwise, you may be subject
to a penalty for failure
to make deposits of taxes.
Part 3:Tell us about your business.
In Part 3, answer only those questions that apply to your business. If a question does not apply, leave it blank and go to
Part 4.
Line 16—If Your Business Has Closed . . .
If you go out of business or stop paying wages, you must file a final return. To tell IRS 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.
Line 17—If You Are a Seasonal Employer . . .
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
Form 941-M from you every month because you have not paid wages regularly. However, you must check the box every time you file a Form
941-M. Also, be sure to check the box in the upper right corner of page 1 of Form 941-M that corresponds to the month reported.
Part 4:May we speak with your 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 the
“Yes” box in Part
4. Then tell us the name and the five-digit personal identification number (PIN) of the specific person to speak with—not
the name of the firm
who prepared your tax return. The designee may choose any five numbers as his or her PIN.
By checking “Yes,” you authorize the IRS to talk to the person you named (your designee) about any questions we may have while we process your
return. You also authorize your designee to:
-
give us any information that is missing from your return,
-
call us for information about processing your return, and
-
respond to certain IRS notices you have shared with your designee about math errors and return preparation. IRS will not send
notices to
your designee.
You are not authorizing your designee to bind you to anything (including additional tax liability) or to otherwise represent
you before the IRS. If
you want to expand your designee's authorization, see Pub. 947, Practice Before the IRS and Power of Attorney.
The authorization will automatically expire 1 year from the due date for filing your Form 941-M. If you or your designee want
to terminate the
authorization, write to the IRS office for your locality using the “Without a payment” address under Where Should You File on page 4
in the Instructions for Form 941.
Part 5:Sign here— Who Must Sign the Form 941-M?
Form 941-M must be signed as follows.
•Sole proprietorship—
The individual who owns the business.
•Corporation (including an LLC treated as a corporation)—
The president, vice president, or other principal officer.
•Partnership (including an LLC treated as a partnership) or unincorporated organization—
A responsible and duly authorized member or officer having knowledge of its affairs.
•Single member limited liability company (LLC) treated as a disregarded entity—
The owner of the limited liability company (LLC).
•Trust or estate—
The fiduciary.
Form 941-M may also be signed by a duly authorized agent of the taxpayer if a valid power of attorney has been filed.
Part 6:For Paid Preparers Only (optional)
You may complete Part 6 if you were paid to prepare Form 941-M and are not an employee of the filing entity. Sign in the space
provided and give
the filer a copy of the return in addition to the copy to be filed with the IRS. Do not complete Part 6 if you are filing
the return as a reporting
agent and have a valid Form 8655, Reporting Agent Authorization, on file with the IRS.
How to Order Forms and Publications from the IRS
Call 1-800-829-3676.
Visit the IRS website at
www.irs.gov.
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