Business owners who have employees working for them must file Form 941 (Employer’s Quarterly Federal Tax Return) at the end of each quarter. The form asks the employer to detail wages paid to employees and the amount of taxes withheld from their paychecks. This is a very important tax form that the IRS requires every employer to file if they have payroll.
Not filing Form 941 on time or at all will bring penalties to the employer. If you don’t file Form 941, you’ll have to pay a penalty of 25% of the unpaid tax for that quarter. After that, each month that remains unfiled, a 5% penalty will be reflected on that quarter’s return.
With that being said, employers must report withholding federal income taxes and payroll taxes from each employee’s paycheck by using Form 941.
Printable Form 941 for 2020
The Internal Revenue Service issued the new Form 941 for 2020 quarters but it’s currently drafted. So, further changes might have been made to Form 941. We included the instructions based on the draft version of the 941. However, the changes could be minor that the functionality of the form will not change but the way that it is explained will.
We’ll keep an eye at the changes to the Form 941 to bring you the most accurate and latest information we have on it. Right below the instructions, you can take a look at Form 941 2020 Draft or download the printable version by clicking Download button. Upon downloading the printable Form 941, you can view it on your browser and press CTRL+P if you wish to print out.
941 Form 2020 Instructions
Form 941 is renewed every year by the IRS. As of early 2020, you can get the draft version of the form that will be used in 2020. As an employer, you’ll need a blank Form 941 and information regarding your employee’s wages and income tax withheld from their wages.
To sum it up, you’ll need
- The number of employees that received a salary, wage, tips, or any other compensation as part of the employment relationship for that quarter.
- The amount of total wages paid to employees for that quarter.
- Your Employer Identification Number.
- Tips that are reported by your employees.
- Employee’s portion of Social Security and Medicare taxes
- Social Security and Medicare taxes paid by the business
- Any additional Medicare taxes withheld from employee’s wages.
941 Form 2020 Instructions Part by Part
Form 941 2020 Part 1
1. Enter the number of employees who received wages, tips, or other compensation for the pay period. (Detail the quarter)
Include all the employees on your payroll for the specified period.
2. Wages, tips, and other compensation
Enter the total amount of wages, tips, and compensation paid to all of your employees for that year.
3. Federal income tax withheld from wages, tips, and other compensation
Enter the total amount of tax withheld from your employee’s paychecks for that year. Check your employee paystubs to be more accurate.
4. If no wages, tips, and other compensation are subjected to Social Security or Medicare Tax
If the wages you pay to your employees are not subjected to Social Security or Medicare tax, check the box.
Social Security and Medicare Tax Amounts
5. Taxable Social Security and Medicare wages and tips
Enter the taxable Social Security and Medicare tax withholding on Line 5a through Line 5e.
6. Total taxes before adjustments
Enter the total amount of all taxes withheld
7. Current quarter’s adjustments for fractions of cents
Enter the adjustments for fractions of cents due to rounding for both Social Security and Medicare taxes withheld.
8. Current quarter’s adjustments for sick pay
If your employees received any sick-pay and if those amounts were subjected to Social Security and Medicare taxes, enter the amount.
9. Current quarter’s adjustment for tips and group-term life insurance
Enter adjustments for the uncollected employee share of Social Security and Medical taxes or group-term life insurance premiums paid for former employees.
10. Total taxes after adjustments
Enter Line 6 – 7 – 8 – 9 to calculate the total.
11. Qualified small business payroll tax credit for increasing research activities
If your business qualify for Form 8974, file it and attach it to your complete Form 941 to claim the credit.
12. Total taxes after adjustments and credits
Enter the total tax amount that is due.
13. Total deposits for this quarter
Enter the total tax amount that is due
14. Balance due
Enter the amount of tax due for the year.
Enter the overpayment amount if you’ve paid too much tax for the year.
Form 941 2020 Part 2
16. Tax liability for the quarter
If the Line 12 on this return is less than $2,500 or line 12 on the return for the prior quarter was less than $2,500, and you didn’t incur a $100,00 next-day deposit obligation during the current quarter, check the box and get to the next line.
Form 941 2020 Part 3
17. If your business has closed
Check the box if your business has closed and you no longer pay wages along with when you made your final payment to your employees.
18. Also, check the box if you’re a seasonal employer and don’t have to file a return for every quarter.
Form 941 2020 Part 4
19. If you wish to designate an employee or a paid preparer to talk with the IRS about your Form 941, complete Part 4.
Form 941 2020 Part 5
Complete the rest and sign the form whether you’re the employer or the preparer.