941 Returns & 941 Payments FAQ's
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The 941 Return is an Employer's Quarterly Federal Tax Return associated with payroll taxes. The return reports wages & taxes for a 3 month quarterly period to the IRS. The IRS uses the information return to reconcile the 941 tax payments an employer is required to submit based on the employer's Federal tax payment frequency requirements (quarterly, monthly, semi-weekly, or next-day).
Copies of returns filed are located in each employer's folder in the Client Portal. Insurance auditors may request copies of these returns from time to time to reconcile the wages you have paid vs. your estimated worker's compensation or liability premiums paid for a policy period. If you have an insurance audit to file, please let us know we can assist. Your CPA will also likely request copies of these returns. We can provide your CPA direct access to your portal if interested. If you have specific questions about your 941 return, please feel free to ask. Otherwise, please note that ASAP files this return electronically for all payroll tax clients and you do not need to file this return directly.
Employers are required to remit their Federal 941 taxes to the IRS based on a frequency established annually which is determined based on an employer's prior history or look-back history of prior tax liabilities. If you fail to make a timely tax payment, you may be subject to a failure-to-deposit penalty of up to 15 percent.
New employers with no history are required in their first year of operation to submit 941 taxes to the IRS monthly on the 15th of each month or following business day for the 941 tax liabilities accrued during the prior calendar month. The IRS operates on a cash basis; so by calendar month you should reference the check dates of the payroll checks rather than the pay period the wages were earned. Example: On January 5th 2016 you issued paychecks to your employees for wages earned Dec 16 - Dec 31st 2015. These wages would be reflected on your employee's 2016 W2's. In addition, for a monthly tax depositor 941 tax liabilities would be due Feb 15th 2016 (based on the January check date). However, since Feb 15th was President's day and a Federal Reserve Holiday; the payment would be due on or prior Tuesday the 16th of February 2016.
If you are an established employer with prior payroll history you would need to determine your deposit frequency requirements by reviewing your prior 941 tax liabilities across your prior look-back history. To learn more about 941 tax payment schedules & look-back history, please reference the "depositing taxes" section of the IRS Publication 15 Circular E.
In short, employer's whose 941 taxes during the look-back history have met or exceeded $50,000 should remit taxes on a semi-weekly schedule. Employers that are considered semi-weekly depositors would roughly need to deposit the 941 taxes within only a few days of each payroll check date. Generally speaking; liabilities from checks dated Monday or Tuesday would be due Friday of the same week. Liabilities from checks dated Wednesday, Thursday or Friday would be due Wednesday of the following week. Holidays push the due dates to the following day and other exceptions may arise, so please reference the IRS Publication 15 Circular E for more details or contact our tax department if you have specific concerns.
While, semi-weekly and monthly depositors are the two most common payment frequency schedules, there are other exceptions. For instance, if an employer's accrued 941 tax liability should meet or exceed $100,000 at any point the taxes would become due the very next business day regardless of the employer's prior history or deposit schedule. Also, some exceptions are allowed should an employer's 941 tax liability not exceed $2500.00 in a quarterly reporting period. If you have a specific issue or question, you should review the full rules as listed in the IRS Circular E or please contact us directly with further details.