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HRPYR: HR/PAYROLL PROCEDURES
PYR: PAYROLL
TAX: Taxes
20: Form 941, Employer’s Quarterly Federal Tax Return
Issued: 9/8/08; Revised:4/8/09
Table of Contents
GENERAL ..................................................................................................................................................................... 1
SCHEDULE................................................................................................................................................................... 1
DATA SOURCES .......................................................................................................................................................... 2
941 WORKSHEET FOR A QUARTER ......................................................................................................................... 2
How to Complete the Worksheet .............................................................................................................................. 4
PREPARING THE FORM 941 AND SCHEDULE B ..................................................................................................... 5
GENERAL
The Form 941, Employer’s Quarterly Federal Tax Return, is used to perform a reconciliation (e.g. true-up) of the
total federal tax payments made by an employer during a quarter to the quarterly tax liability as calculated on the
Form 941. Any difference between the two is handled either as a credit on the next return (overpayment) or an
additional remittance to the IRS (underpayment).
Federal tax is the total of Federal Income Tax (FIT) withholding, OASDI tax (both employee and employer amounts)
and Medicare tax (both employee and employer amounts).
Tax payments and tax liabilities are not the same thing. A tax payment is the Federal tax amount (as defined
above) for an individual pay cycle (e.g. confirm) that is sent (remitted) to the IRS following the close of each pay
period. The remittance amount is the sum of the FIT, OASDI and Medicare amounts detailed on the US Payroll
Summary (PY4150018H) produced each pay period. A federal tax liability is the amount which the IRS determines
is owed for a given period of time; in this case, as calculated by the formula on the Form 941. This may or may not
be what was actually remitted during the quarter. When the sum of all pay period payments made during the
quarter is greater than the calculated liability, the difference can be applied to the next return or taken as a refund.
If the calculated liability is greater, then the difference must be remitted to the IRS.
SCHEDULE
The Form 941 is due by the end of the month following the last day of the quarter.
OTR ENDS DUE BY
1 March 31 April 30
2 June 30 July 31
3 September 30 October 31
4 December 31 January 31
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HRPYR: HR/PAYROLL PROCEDURES
PYR: PAYROLL
TAX: Taxes
20: Form 941, Employer’s Quarterly Federal Tax Return
Issued: 9/8/08; Revised:4/8/09
DATA SOURCES
Payroll Balance Sheet
The data contained on the Payroll Balance Sheet is used to complete the 941 Worksheet. See HRPYR-TX-WKLY-
10 for procedures regarding the Payroll Balance Sheet.
TX4150004, Multiple Worksite Report
Use to complete the number of employees line on the Form 941.
941 WORKSHEET FOR A QUARTER
The 941 Worksheet for A Quarter is used to collect the pay period wage and tax information that is necessary to
complete the Form 941 at the end of the quarter. The line numbers and line text replicates what is on the Form
941. The Worksheet contains 4 sections:
One for each month in the quarter. Each month is divided into two pay periods. The wage and tax
st
information for pay periods is entered into the pay period sections: the 1 pay period in the month in the
first section and the second pay period in the month in the second pay period.
One section for the quarterly information which will be placed on the Form 941. The quarterly data is a
summary for the 3 months detailed on the same worksheet.
The Worksheet is constructed so that very little information needs to be entered manually.
The pay period wage and tax information in each pay period section is extracted from the Payroll Balance
Sheet by linking to the appropriate cells in the Payroll Balance Sheet.
Various pay period and monthly totals as well as the majority of the totals for the Quarterly section are
computed automatically based on formulae contained in the Worksheet.
Several figures in the Quarterly section are linked back to totals for each of the months.
Consequently, the Worksheet is protected and many of the cells containing the data are locked to prevent the
formulae and links from being disturbed.
The following diagrams identify how each cell is set-up within each section. Only Line 11, Total deposits this
quarter…, in the For The Quarter section requires a manual entry.
Key: PBS = Payroll Balance Sheet
2 Payroll Ending Date Sections per Month
PAYROLL ENDING DATE: Link to PBS
2. Wages, tips, and other compensation 2 Link to PBS
3. Total income tax withheld from line 2 3 Link to PBS
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HRPYR: HR/PAYROLL PROCEDURES
PYR: PAYROLL
TAX: Taxes
20: Form 941, Employer’s Quarterly Federal Tax Return
Issued: 9/8/08; Revised:4/8/09
Column 1 Column 2
5a. Taxable social security
wages Link to PBS x.124 Calculated
5c. Taxable Medicare wages Link to PBS x.029 Calculated
5d. Total social security & Medicare taxes (Column 2, 5a + 5c) 5d Calculated
6. Total taxes before adjustments (lines 3 + 5d) 6 Calculated
1 Tax Liability Total section per Month
MONTH x
Tax Liability (where x=1,2,3) Calculated
1 For the Quarter section per Quarter
FOR THE QUARTER
2. Wages, tips, and other compensation 2 Calculated
3. Total income tax withheld from line 2 3 Calculated
Column 1 Column 2
5a. Taxable social security
wages Calculated x.124 Calculated
5c. Taxable Medicare wages Calculated x.029 Calculated
5d. Total social security & Medicare taxes (Column 2, 5a + 5c) 5d Calculated
6. Total taxes before adjustments (lines 3 + 5d) 6 Calculated
8. Total Taxes 8 Calculated
10. Total taxes after
adjustments 10 Calculated
11. Total deposits this quarter, including overpayment from prior quarter 11 Link to PBS
12. Balance due if Ln 10 more than Ln 11 12 Calculated
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HRPYR: HR/PAYROLL PROCEDURES
PYR: PAYROLL
TAX: Taxes
20: Form 941, Employer’s Quarterly Federal Tax Return
Issued: 9/8/08; Revised:4/8/09
13. Overpayment if Ln 11 more than Ln 10 13 Calculated
Linked to Month 1
15. Tax Liability Month 1 Total Liability
Linked to Month 2
Month 2 Total Liability
Linked to Month 3
Month 3 Total Liability
Total Liability for
quarter Calculated
How to Complete the Worksheet
A Worksheet is created for each quarter in a given year. The 4 Worksheets for a year are filed in the folder for that year which
is maintained in H:\Payroll Process & Procedures\Taxes\941 forms. When beginning a new year, first create a new year’s
folder in that directory named for the year (e.g., 2008, 2009, etc).
st
For the 1 pay period in a new quarter
Step Activity
OPEN the Master Worksheet
1 Location: H:\Payroll Process & Procedures\Taxes\941 forms\Master 941 Worksheet.xls
SAVE AS Qtr X in the current year’s folder (H:\Payroll Process & Procedures\Taxes\941
2 forms\[current year folder] where x is the current quarter’s number (1,2,3 or 4)
3 Shrink the new Worksheet
OPEN the Payroll Balance Sheet
4 Location: H:\Payroll Process & Procedures\Taxes\Balance sheet\Master.xls
Shrink the Balance sheet so that both the Balance Sheet and the 941 Worksheet are on the same
5
screen. This will make it easier to move between the two.
LINK from the Payroll Balance Sheet to the 941 Worksheet:
Payrolls Payroll Ending Date
Total Income Line 2 Wages, Tips
Federal Tax Line 3 Total income tax
OASDI Wages Line 5a, column 1 Taxable social security wages
6 Medicare Wages Line 5c, column 1 Taxable Medicare wages
To perform the link:
1. Enter an equal sign (=) in the 941 Worksheet cell
2. Click on the Payroll Balance Sheet cell with the amount- a link formula to the Balance Sheet cell will
appear in the Worksheet
3. ENTER – the amount will appear in the Worksheet cell
4.
7 SAVE AS in the folder and as the file used in Step 2 above
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HRPYR: HR/PAYROLL PROCEDURES
PYR: PAYROLL
TAX: Taxes
20: Form 941, Employer’s Quarterly Federal Tax Return
Issued: 9/8/08; Revised:4/8/09
st
For pay periods in the current quarter after the 1 pay period
Step Activity
OPEN the 941Worksheet for the current quarter
1 Location: H:\Payroll Process & Procedures\Taxes\941 forms\ [yyyy]\[current quarter’s file]
where yyyy = current year
2 Shrink the new Worksheet
OPEN the Payroll Balance Sheet
3 Location: H:\Payroll Process & Procedures\Taxes\Balance sheet\Master.xls
Shrink the Balance sheet so that both the Balance Sheet and the 941 Worksheet are on the same
4
screen. This will make it easier to move between the two.
LINK from the Payroll Balance Sheet to the 941 Worksheet:
Payrolls Payroll Ending Date
Total Income Line 2 Wages, Tips
5
Federal Tax Line 3 Total income tax
OASDI Wages Line 5a, column 1 Taxable social security wages
Medicare Wages Line 5c, column 1 Taxable Medicare wages
6 Pay Date = date employee receive pay for the pay period
If it is the end of the quarter and the final pay period section has been completed, proceed with the
7
next steps. If not, SAVE AS in the folder and file opened in Step 1 above
At the end of the quarter
COPY from the Payroll Balance Sheet to the 941 Worksheet:
8
Total Tax Deposits QTD Line 11a Total Tax Deposits
OPEN the Form 941 for the prior quarter
9 Location: H:\Payroll Process & Procedures\Taxes\941 forms\yyyy]\Qtr q 941.pdf
Where yyyy = year and q = quarter number
10 If Line 13 contains an amount, COPY the amount to Line 11b of the Worksheet
11 SAVE in the folder and file opened in Step 1 above and leave the Worksheet Open.
12 Prepare the Form 941and Schedule B
PREPARING THE FORM 941 AND SCHEDULE B
Location: H:\Payroll Process & Procedures\Taxes\941 forms\f941.pdf and
H:\Payroll Process & Procedures\Taxes\941 forms\f941Sch B.pdf
These are the preferred forms as the recurring information has already been completed. They
should only be replaced when the IRS revises the form.
or
www.irs.gov >More Forms and Publications>Form and instruction number(PDF) – Enter 941 in the FIND
box and then select the most current version of the form 941 or Schedule B. All employer
information will have to be completed as well as the quarterly tax data.
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HRPYR: HR/PAYROLL PROCEDURES
PYR: PAYROLL
TAX: Taxes
20: Form 941, Employer’s Quarterly Federal Tax Return
Issued: 9/8/08; Revised:4/8/09
The Form 941 and the Schedule B are PDF forms which can be completed on screen and then printed. The Form
941 reconciles the tax deposits made periodically during the quarter to the tax liability as calculated on the Form
941. Schedule B details the individual pay period tax deposits as well as in total for the quarter. The total on the
Schedule B must equal the total shown on Line 10 of the Form 941.
The Form 941 is prepared using the data contained in the ‘For The Quarter’ section of the 941 Worksheet.
Complete the forms as follows:
Form 941
Step Activity
OPEN the Master Form 941 and shrink
1
Location: H:\Payroll Process & Procedures\Taxes\941 forms\f941.pdf
SAVE AS
2 Location: H:\Payroll Process & Procedures\Taxes\941 forms\ [yyyy]\f941 qtr#.pdf
where # is the current quarter
The current quarter’s 941 Worksheet should be open. If not, open and shrink it so that both the
Worksheet and the Form 941 are displayed on screen.
3
Location: H:\Payroll Process & Procedures\Taxes\941 forms\ [yyyy]\[current quarter’s file]
where yyyy = current year
In the Report for this Quarter box, Point and Click on the box next to the number of the quarter
4
to make a check mark appear indicating the quarter months being reported.
5 Go to Document Direct
6 Open and print the TX4150004, Multiple Worksite Report
Complete line 1 using the TX4150004, Company Total for last month of quarter (March, June,
7 September, December)
Enter lines 2 through 11 and line 15, Months 1, 2 and 3 from the Form 941 Worksheet, For The
8 Quarter to the same corresponding line numbers in Part 1 (lines 2-11) and Part 2 (line 15) of the
Form 941. The data cannot be copied because the decimal point on the Form 941 is fixed.
The Balance Due and Overpayment amount are automatically calculated:
Line 12, Balance Due is populated: If this amount is less than $1, then nothing is due.
9 Otherwise, see the Balance Due section of the 941 Instructions on the IRS website.
Line 13, Overpayment is populated (not zero): POINT and CLICK on the box next to ‘Apply
to next return’
10 In Part 2 for line 15, click ON the box for the ‘You were a semimonthly depositor…’
11 SAVE AS same location/file as in Step 2
Open 941 Worksheet to full screen size and SAVE AS the 941 Worksheet in the same folder/file
12
name as was opened when starting the Worksheet preparation outlined above
13 Prepare Schedule B
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HRPYR: HR/PAYROLL PROCEDURES
PYR: PAYROLL
TAX: Taxes
20: Form 941, Employer’s Quarterly Federal Tax Return
Issued: 9/8/08; Revised:4/8/09
Schedule B
Step Activity
OPEN the Master Schedule B and shrink
1
Location: H:\Payroll Process & Procedures\Taxes\941 forms\f941 Sch B.pdf
SAVE AS
2 Location: H:\Payroll Process & Procedures\Taxes\941 forms\ [yyyy]\Sch B qtr#.pdf
where # is the current quarter
Enter from the Worksheet, each individual pay periods’ Total Taxes amount to the appropriate
month/day line on Schedule B.
3 The appropriate month is the month of the pay period. The appropriate day is the ACTUAL PAY
st
DAY. That is, if the 1 payroll period of the first month of the quarter ends on the 15th and that is a
Saturday, then the actual pay day is Friday, the 14th. Therefore, the Total Tax Deposit for the 7/15
pay period is shown on the Schedule B in the first month’s section on line 14.
Enter
4
Worksheet Total Liability for the Quarter line Schedule B Total liability for quarter box
Compare the Schedule B Total liability for quarter amount to the Form 941 Line 10 amount. If they
5 are NOT equal, enter the difference on Lines 7a of the Worksheet and the Form 941. ENTER the
recalculated line 10 amount from the Worksheet to the Form 941 line 10.
6 SAVE AS same folder/file name as in Step 2
PRINT
Form 941 (x2)
7 Schedule B (x2)
941 Worksheet
Payroll Balance Sheet
89 SIGN both copies of the Form 941
Follow the 941 Instructions for making a payment if a BALANCE DUE amount is shown on the
9
Form 941.
10 Mail one Form 941 and Schedule B to the US Treasury.
11 Attach the TX4150004 to the copies from Step 7 and FILE
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