IRS Form 941: Here’s Everything You Need To Know

Learn all about the Employer’s Quarterly Federal Tax return in 2021.

Employers (businesses or otherwise) who have a number of employees on their payroll are required to file a quarterly federal tax return to inform and report the tax withheld from their employee’s paychecks. 

This self-explanatory business tax form is mandated for businesses that pay employee compensations, such as wages, salaries, variables, incentives, tips, and more to their employees.

When employers withhold certain federal taxes from their employee’s paychecks, the same has to be reported on Form 941.

A quarterly return, IRS Form 941 must be filed every quarter to keep the employer’s tax records up to date for every quarter. It is essential to note that the employer must file this federal tax return regardless of the compensations paid or taxes withheld. The very process of filing this quarterly federal return is crucial.

The following will discuss certain instructions on e-filing Form 941 and the uses of the Employer’s Quarterly Federal Tax return, Form 941. 

• June 2021: Updated Form 941 From The IRS

What Is Form 941?

Form 941, Employer’s Quarterly Federal Tax Return, is an IRS informational return that reports the employee compensations made by the employer and taxes withheld from the employee’s paychecks.

Employee compensations, such as salaries, wages, variables, tips reported by employees, incentives, and more are reported on this quarterly federal tax return.

Further, certain federal taxes which are withheld from the employee’s paycheck, such as the Medicare tax, social security tax, income tax, and more are reported on this return.

Update: The American Rescue Plan (2021) allows employers to claim credits on certain wages compensated to sick employees who lost pay to the global pandemic and other illnesses. Learn all about the new update in detail here from the IRS.

Who Should eFile Form 941?

Businesses or self-employed individuals that have one or more individuals on their payroll as employees are required to file Form 941 with the IRS. Gig economy entities, non-profit organizations, for-profit entities, companies, firms, partnerships, sole proprietors, and more are required to file the employer’s quarterly federal tax return, Form 941. 

Why Should Taxpayers File Form 941? 

From A Business Perspective:

The tax and compensation reports are used to understand the financial standing of the entity. The performance of an entity, business compliance status, compensatory factors, financial status, and more are assessed in a quarter.

From A Federal Perspective:

When businesses report the tax withholdings and the compensations, the IRS gains insights into the financial performance of an entity for that quarter. The cumulative reports are used to analyze the tax reporting trends across states, allowing the IRS to interpret the state-wise tax statistics in a quarter.

Businesses that do not report their quarterly tax returns are subject to scrutiny and unannounced audits from the IRS.

When Should You eFile Form 941?  What Are The Due Dates For Form 941?

The IRS requires employers to file Form 941 by the end of the successive month of a quarter. The following tabular explanation will help you better understand the quarterly filing timelines.

The Quarter Includes	Quarter Ends By	Form 941 Is Due By
January, February, March	March 31	April 30
April, May, June	June 30	July 31
July, August, September	September 30	October 31
October, November, December	December 31	January 31

So, for any given financial year, the due date to file Form 941 is as follows.

Quarter	Due Date
January, February, March	April 30
April, May, June	July 31
July, August, September	October 31
October, November, December	January 31

How To eFile Form 941? 

Form 941 can be filed by paper and through e-filing methods. However, an amended version of this return, Form 941X cannot be e-filed and must be drafted and mailed to the IRS through the paper filing method. 

Note: If you believe that your annual federal taxes for the 2021 tax year are $1,000 or less, then you can file Form 944 instead of a 941 return. 

• Employers that are reporting federal taxes higher than $1,000 are instructed by the IRS to file Form 941.  
• Several Covid-19 relief tax exceptions have been made to help reduce the tax burden on employers and employees for the 2021 tax year. Check them all here.

eFile Employer’s Quarterly Federal Tax Return, Form 941 with Tax1099 In 3 Easy Steps

Tax1099 is an IRS-Authorized e-File provider trusted by over 100,000 businesses in the U.S. Businesses like yours are utilizing our advanced e-file solutions to organize, file, and manage their IRS tax compliance and regulatory reporting requirements. 

To get started with the 3-step process, create your free Tax1099 account here. 

Step 1: Select Form 941 from the Form Directory on your user dashboard

Step 2: Import your business tax and employee data through any of the available integrations 

Step 3: Validate the reported information and e-File securely

All your returns are securely transmitted to the IRS through our 256-bit, end-to-end encrypted platform. 

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