Schedule B (Form 941) - Report of Tax Liability for Semiweekly Schedule Depositors

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Instructions for Schedule B (Form 941)

16:18 - 10-FEB-2006

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Instructions for Schedule B
(Form 941)

Department of the Treasury
Internal Revenue Service

(Rev. January 2006)
Report of Tax Liability for Semiweekly Schedule Depositors

General Instructions:

See $100,000 Next-Day Deposit Rule in section 11 of
Pub. 15 (Circular E) for important details.

Purpose of Schedule B (Form 941)

Do not complete Schedule B (Form 941) if you have a
tax liability that is less than $2,500 (after you subtract
CAUTION any advance earned income credit (EIC) payment)
during the quarter and you pay in full with a return that you file
on time.

!

These instructions tell you about Schedule B (Form 941),
Report of Tax Liability for Semiweekly Schedule Depositors. To
determine if you are a semiweekly depositor, visit the IRS
website at www.irs.gov and type “semiweekly depositor” in the
search box. Also see Pub. 15 (Circular E), Employer’s Tax
Guide, or Pub. 80 (Circular SS), Federal Tax Guide for
Employers in the U.S. Virgin Islands, Guam, American Samoa,
and the Commonwealth of the Northern Mariana Islands.

What Is Schedule B (Form 941)?
Federal law requires you, as an employer, to withhold taxes
from your employees’ paychecks. Each time you pay wages,
you must withhold – or take out of your employees’ paychecks
– certain amounts for federal income tax, social security tax,
and Medicare tax (payroll taxes). Under the withholding system,
taxes withheld from your employees are credited to your
employees in payment of their tax liabilities.
Federal law also requires employers to pay any liability for
the employer’s portion of social security and Medicare taxes.
This portion of social security and Medicare taxes is not
withheld from employees.
Schedule B (Form 941) accompanies Form 941, Employer’s
QUARTERLY Federal Tax Return, or Form 941-SS, Employer’s
QUARTERLY Federal Tax Return (American Samoa, Guam,
the Commonwealth of the Northern Mariana Islands, and the
U.S. Virgin Islands), that you use to report your payroll taxes
and adjustments. (Do not use Schedule B (Form 941) as an
attachment to Form 944, Employer’s ANNUAL Federal Tax
Return, or Form 944-SS, Employer’s ANNUAL Federal Tax
Return. Instead use Form 945-A, Annual Record of Federal Tax
Liability.)
On Schedule B (Form 941), list your tax liability for each
day.
Include:
• the federal income tax you withheld from your employees’
paychecks and
• both employee and employer Medicare and social security
taxes.
Note. Subtract any advance earned income credit payments
from your tax liability.
Do not use the Schedule B (Form 941) to show federal tax
deposits. Deposit information is taken from your deposit
coupons (Form 8109, Federal Tax Deposit Coupon) or from the
Electronic Federal Tax Payment System (EFTPS).
IRS uses Schedule B (Form 941) to determine if you
have deposited your federal employment tax liabilities
CAUTION on time. If you do not properly complete and file your
Schedule B (Form 941) with Form 941 or Form 941-SS, IRS
may propose an “averaged” failure-to-deposit penalty. See
Deposit Penalties in section 11 of Pub. 15 (Circular E) for more
information.

!

Who Must file Schedule B (Form 941)?

When Must You File?
Attach your Schedule B (Form 941) to your Form 941 or Form
941-SS and file it every quarter when that Form 941 or Form
941-SS is due. For more information, see section 12 of Pub. 15
(Circular E), the Instructions for Form 941, or the Instructions
for Form 941-SS.

Specific Instructions:
Completing Schedule B (Form 941)
Fill in Your Business Information
Carefully fill in your employer identification number (EIN) and
name at the top of the schedule. Make sure that they exactly
match the name of your business and the EIN that IRS
assigned to your business and also agree with the name and
EIN shown on the attached Form 941 or Form 941-SS.
Always be sure the EIN on the schedule you file exactly
matches the EIN that IRS assigned to your business. Do
CAUTION not use your social security number on forms that ask
for an EIN. Filing a Schedule B (Form 941) with an incorrect
EIN, or using the EIN of another business, may result in
penalties and delays in processing your return.

!

Calendar year
Show the calendar year that applies to the quarter checked.
See Check the Box for the Quarter below.

Check the Box for the Quarter
In the box at the top of the schedule, check the appropriate box
of the quarter for which you are filing this schedule. Make sure
that the quarter checked on the top of the Schedule B (Form
941) matches the quarter checked on your Form 941 or Form
941-SS.

Fill in Your Tax Liability by Month
Schedule B (Form 941) is divided into the 3 months that make
up a quarter of a year. Each month has 31 numbered spaces
that correspond to the dates of a typical month. Write your tax
liabilities in the spaces that correspond to the dates you paid
wages to your employees, not the date payroll deposits were
made.
For example, if your payroll period ended on
December 31, 2005, and you paid the wages for that period on
January 6, 2006, you would:
• go to Month 1 (because January is the first month of the
quarter) and
• write your tax liability on line 6 (because line 6 represents the
sixth day of the month).

File Schedule B (Form 941) if you are:

• a semiweekly schedule depositor or
• a monthly schedule depositor who accumulated a tax liability

Make sure you have checked the appropriate box on

TIP line 15 of Form 941 or Form 941-SS to show that you

of $100,000 or more on any given day in the reporting period.

Cat. No. 38683X

are a semiweekly schedule depositor.

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Instructions for Schedule B (Form 941)

16:18 - 10-FEB-2006

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

• If the adjustment corrects an overreported liability, use the

Total Liability for the Quarter

adjustment amount to offset subsequent liabilities until it is used
up.
Example. On 1/20/06, Employer D discovered that social
security tax was over-reported by $10,000 on a prior quarter
return. Employer D paid wages on 1/13/06, 1/20/06, 1/27/06,
and 2/3/06 and had a $5,000 tax liability for each of those pay
dates. On Schedule B (Form 941), Employer D must report a
$5,000 liability on 1/13/06 for Month 1 using line 13. Since the
adjustment for the $10,000 over-reported liability offsets the
1/20/06 and 1/27/06 liability, Employer D does not deposit or
report these two $5,000 liabilities on Schedule B (Form 941).
Employer D must report the $5,000 liability for 2/3/06 on Month
2 using line 3. (See section 13 of Pub. 15 (Circular E) for details
on reporting adjustments to correct errors on prior period
returns.)

To find your total liability for the quarter, add your monthly tax
liabilities.
Tax Liability for Month 1
+ Tax Liability for Month 2
+ Tax Liability for Month 3
Total Liability for the Quarter
Your total liability for the quarter must equal line 10 on Form 941 or line
8 on Form 941-SS.

Here are some examples.

• Employer A is a semiweekly schedule depositor who pays
wages for each month on the last day of the month. On
December 22, 2006, Employer A also paid its employees
year-end bonuses (subject to employment taxes). Because
Employer A is a semiweekly schedule depositor, Employer A
must record employment tax liabilities on Schedule B (Form
941). For the 4th quarter (October, November, December),
Employer A should report tax liability in this way —
Month

Lines for dates wages were paid

1 (October)
2 (November)
3 (December)

line 31 (pay day, last day of the month)
line 30 (pay day, last day of the month)
lines 22 (bonus paid) + 31 (pay day)

How to Order Forms and Publications
from the IRS
Call 1-800-829-3676

Visit the IRS website at www.irs.gov

• Employer B is a semiweekly schedule depositor who pays

employees every other Friday. Employer B accumulated a
$20,000 employment tax liability on each of these pay dates:
1/13/06, 1/27/06, 2/10/06, 2/24/06, 3/10/06, and 3/24/06. Since
Employer B is a semiweekly schedule depositor, Employer B
must record tax liabilities on Schedule B (Form 941) in this
way —
Month

Lines for dates wages were paid

1 (January)
2 (February)
3 (March)

lines 13 and 27
lines 10 and 24
lines 10 and 24

Other IRS Products You May Need
• Form 941, Employer’s QUARTERLY Federal Tax Return
• Form 941-SS, Employer’s QUARTERLY Federal Tax Return
(American Samoa, Guam, the Commonwealth of the Northern
Mariana Islands, and the U.S. Virgin Islands)
• Pub. 15 (Circular E), Employer’s Tax Guide
• Pub. 80 (Circular SS), Federal Tax Guide for Employers in
the U.S. Virgin Islands, Guam, American Samoa, and the
Commonwealth of the Northern Mariana Islands.
Paperwork Reduction Act Notice

• Employer C is a new business and monthly schedule

depositor for 2006. Employer C pays wages every Friday and
has accumulated a $2,000 employment tax liability on
1/13/06 and a $110,000 liability on 1/20/06 and on every
subsequent Friday during 2006. Under the deposit rules,
employers become semiweekly schedule depositors on the
day after any day they accumulate $100,000 or more of tax
liability in a deposit period. (See section 11 of Pub. 15
(Circular E) or section 8 of Pub. 80 (Circular SS) for details.)
Because Employer C accumulated $112,000 on 1/20/06,
Employer C became a semiweekly schedule depositor on the
next day and must complete Schedule B (Form 941) and file it
with Form 941 or Form 941-SS. Employer C should record tax
liabilities in this way —

Month
1 (January)
1 (January)
2 (February)
3 (March)

Dates wages were paid
line 13
lines 20, 27
lines 3, 10, 17, 24
lines 3, 10, 17, 24

We ask for the information on Schedule B (Form 941) to carry
out the Internal Revenue laws of the United States. You are
required to give us the information. We need it to ensure that
you are complying with these laws and to allow us to figure and
collect the right amount of tax.
You are not required to provide the information requested on a
form that is subject to the Paperwork Reduction Act unless the
form displays a valid OMB control number. Books or records
relating to a form or its instructions must be retained as long as
their contents may become material in the administration of any
Internal Revenue law. Generally, tax returns and return
information are confidential, as required by Code section 6103.

Amount to record

The time needed to complete and file Schedule B (Form 941)
will vary depending on individual circumstances. The estimated
average time is 2 hours, 53 minutes.

$2,000
$110,000
$110,000
$110,000

If you have comments concerning the accuracy of this time
estimate or suggestions for making Schedule B (Form 941)
simpler, we would be happy to hear from you. You can write to:
Internal Revenue Service, Tax Products Coordinating
Committee, SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave.
NW, IR-6406, Washington, DC 20224.

Prior Period Adjustments
On Schedule B (Form 941), you must take into account
adjustments to correct errors on prior period returns. See lines
7d-7g on post-2004 versions of Forms 941; lines 7e and 7g on
post-2004 versions of Forms 941-SS. (For pre-2005 Forms 941
and 941-SS, see lines 4 and 9.)
• If the adjustment corrects an underreported liability in a prior
quarter, include the adjustment amount in the total liability
reported for the entry space that corresponds to the date you
discovered the error.

Do not send the Schedule B (Form 941) to this address.
Instead, see Where Should You File? in the Form 941 or Form
941-SS instructions.

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