The IRS Form 941 (Schedule B) is a tax form for the reporting of tax liability for semi-weekly pay schedules. The employer is required to withhold federal income tax and payroll taxes from the employee’s paychecks. The 941 form reports the total amount of tax withheld during each quarter.
Federal law requires an employer to withhold taxes from their employees’ paychecks. Each time an employer pays wages, certain amounts are withheld for federal income tax, Social Security tax, and Medicare tax. Under the withholding system, taxes withheld from your employees are credited to the employees in payment of their tax liabilities.
Employers are also required to pay any liability for the employer’s portion of Social Security and Medicare taxes.
On Form 941 (Schedule B), you must list your tax liability for each day. Liabilities include:
- The federal income tax you withheld from your employees’ paychecks
- Both employee and employer Social Security and Medicare taxes.
How do I Know if I’m a Semi-Weekly Depositor?
If you are a semi-weekly schedule depositor, you are required to file a Form 941 along with Schedule B. This designation applies if you:
- Reported more than $50,000 of employment taxes in the lookback period
- Accumulated a tax liability of $100,000 or more on any given day in the current or prior calendar year
If you have questions or lingering confusion about your status as a semi-weekly schedule depositor, we recommend visiting the IRS’s resource on Schedule B -941. This will provide additional information and further detail on compliance laws.
Are There Late Penalties?
As with most 941 situations, the IRS will impose a late payment penalty dependent on how late the deposit s made. However, if you fail to provide a Schedule B it may be impossible for the IRS to know exactly which penalty rates apply. In these situations, the IRS will generally split the difference by assessing the averaged penalties, determined by “distributing your total tax liability shown on Form 941, line 12, equally through the tax period. We have more information about 941 late payment penalties at this resource.
If you’re looking for strategies to get these forms and payments in on time, 1099-etc provides an easy to use software solution that will allow you to easily complete Form 941, including Schedule B, if needed.