Employer's Quarterly Federal Tax Return

Instructions for Schedule B
(Form 941)

Department of the Treasury
Internal Revenue Service

(Rev. March 2023)

Use with the January 2017 revision of Schedule B (Form 941)
Report of Tax Liability for Semiweekly Schedule Depositors
Section references are to the Internal Revenue Code
unless otherwise noted.

the Northern Mariana Islands, and the U.S. Virgin
Islands), unless otherwise noted.

Future Developments

Adjusting tax liability for nonrefundable credits
claimed on Form 941, lines 11a, 11b, and 11d. See
Adjusting Tax Liability for Nonrefundable Credits Claimed
on Form 941, Lines 11a, 11b, and 11d, later, for
instructions on how to report on Schedule B adjustments
to your tax liabilities for the qualified small business
payroll tax credit for increasing research activities; the
nonrefundable portion of the credit for qualified sick and
family leave wages paid this quarter of 2023 for leave
taken after March 31, 2020, and before April 1, 2021; and
the nonrefundable portion of the credit for qualified sick
and family leave wages paid this quarter of 2023 for leave
taken after March 31, 2021, and before October 1, 2021.

For the latest information about developments related to
Schedule B and its instructions, such as legislation
enacted after they were published, go to IRS.gov/
Form941.

What’s New
Qualified small business payroll tax credit for increasing research activities. For tax years beginning
before January 1, 2023, a qualified small business may
elect to claim up to $250,000 of its credit for increasing
research activities as a payroll tax credit. The Inflation
Reduction Act of 2022 (the IRA) increases the election
amount to $500,000 for tax years beginning after
December 31, 2022. The payroll tax credit election must
be made on or before the due date of the originally filed
income tax return (including extensions). The portion of
the credit used against payroll taxes is allowed in the first
calendar quarter beginning after the date that the qualified
small business filed its income tax return. The election
and determination of the credit amount that will be used
against the employer’s payroll taxes are made on Form
6765, Credit for Increasing Research Activities. The
amount from Form 6765, line 44, must then be reported
on Form 8974, Qualified Small Business Payroll Tax
Credit for Increasing Research Activities.
Starting in the first quarter of 2023, the payroll tax credit
is first used to reduce the employer share of social
security tax up to $250,000 per quarter and any remaining
credit reduces the employer share of Medicare tax for the
quarter. Any remaining credit, after reducing the employer
share of social security tax and the employer share of
Medicare tax, is then carried forward to the next quarter.
Form 8974 is used to determine the amount of the credit
that can be used in the current quarter. For more
information about the payroll tax credit, see IRS.gov/
ResearchPayrollTC. Also see Adjusting Tax Liability for
Nonrefundable Credits Claimed on Form 941, Lines 11a,
11b, and 11d, later.

Reminders
Schedule B is filed with Form 941 or Form 941-SS.
References to Form 941, Employer's QUARTERLY
Federal Tax Return, in these instructions also apply to
Form 941-SS, Employer’s QUARTERLY Federal Tax
Return (American Samoa, Guam, the Commonwealth of
Feb 22, 2023

Reporting prior period adjustments. Prior period
adjustments are reported on Form 941-X, Adjusted
Employer's QUARTERLY Federal Tax Return or Claim for
Refund, or Form 944-X, Adjusted Employer's ANNUAL
Federal Tax Return or Claim for Refund, and aren’t taken
into account when figuring the tax liability for the current
quarter.
When you file Schedule B with your Form 941, don’t
change your current quarter tax liability by adjustments
reported on any Form 941-X or 944-X.
Amended Schedule B. If you have been assessed a
failure-to-deposit (FTD) penalty, you may be able to file an
amended Schedule B. See Correcting Previously
Reported Tax Liability, later.

General Instructions
Purpose of Schedule B
These instructions tell you about Schedule B. To
determine if you’re a semiweekly schedule depositor, see
section 11 of Pub. 15, Employer's Tax Guide, or section 8
of Pub. 80, Federal Tax Guide for Employers in the U.S.
Virgin Islands, Guam, American Samoa, and the
Commonwealth of the Northern Mariana Islands.
Federal law requires you, as an employer, to withhold
certain taxes from your employees’ pay. Each time you
pay wages, you must withhold—or take out of your
employees’ pay—certain amounts for federal income tax,
social security tax, and Medicare tax. You must also
withhold Additional Medicare Tax from wages you pay to
an employee in excess of $200,000 in a calendar year.
Under the withholding system, taxes withheld from your
employees are credited to your employees in payment of
their tax liabilities.

Cat. No. 38683X

Federal law also requires employers to pay any liability
for the employer share of social security and Medicare
taxes. This share of social security and Medicare taxes
isn’t withheld from employees.

exactly match the name of your business and the EIN that
the IRS assigned to your business and also agree with the
name and EIN shown on the attached Form 941 or Form
941-X.

On Schedule B, list your tax liability for each day. Your
tax liability is based on the dates wages were paid. Your
liability includes:
• The federal income tax you withheld from your
employees' pay, and
• Both the employer and employee share of social
security and Medicare taxes.

Calendar Year

Enter the calendar year that applies to the quarter
checked.

Check the Box for the Quarter

Under Report for this Quarter at the top of Schedule B,
check the appropriate box of the quarter for which you’re
filing this schedule. Make sure the quarter checked on the
top of the Schedule B matches the quarter checked on
your Form 941 or Form 941-X.

Don’t use Schedule B to show federal tax deposits. The
IRS gets deposit data from electronic funds transfers.
The IRS uses Schedule B to determine if you’ve
deposited your federal employment tax liabilities
CAUTION on time. If you're a semiweekly schedule
depositor and you don’t properly complete and file your
Schedule B with Form 941, the IRS may propose an
“averaged” FTD penalty. See Deposit Penalties in section
11 of Pub. 15 or section 8 of Pub. 80 for more information.

!

Enter Your Tax Liability by Month

Schedule B 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. Enter your
tax liabilities in the spaces that correspond to the dates
you paid wages to your employees, not the date payroll
liabilities were accrued or deposits were made.

Who Must File?

For example, if your payroll period ended on December
31, 2022, and you paid the wages for that period on
January 6, 2023, you would:
• Go to Month 1 (because January is the first month of
the quarter), and
• Enter your tax liability on line 6 (because line 6
represents the sixth day of the month).

File Schedule B if you’re a semiweekly schedule
depositor. You’re a semiweekly schedule depositor if you
reported more than $50,000 of employment taxes in the
lookback period or accumulated a tax liability of $100,000
or more on any given day in the current or prior calendar
year. If you became a semiweekly schedule depositor
during the quarter, you must complete Schedule B for the
entire quarter. See section 11 of Pub. 15 or section 8 of
Pub. 80 for more information. The $100,000 tax liability
threshold requiring a next-day deposit is determined
before you consider any reduction of your liability for
nonrefundable credits. For more information, including an
example, see frequently asked question 17 at IRS.gov/
ETD.

!

CAUTION

Make sure you have checked the appropriate box

TIP in Part 2 of Form 941 to show that you’re a
semiweekly schedule depositor.

Example 1. Cedar Co. is a semiweekly schedule
depositor that pays wages for each month on the last day
of the month. On December 24, 2023, Cedar Co. also
paid its employees year-end bonuses (subject to
employment taxes). Cedar Co. must report employment
tax liabilities on Schedule B for the fourth quarter
(October, November, December) as follows.

Don’t complete Schedule B if you have a tax
liability on Form 941, line 12, that is less than
$2,500 during the quarter.

When Must You File?

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

Schedule B is filed with Form 941. Therefore, the due date
of Schedule B is the same as the due date for the
applicable Form 941. In some situations, Schedule B may
be filed with Form 941-X. See Form 941-X, later, for
details.

Lines for dates wages were paid
line 31 (pay day, last day of the month)
line 30 (pay day, last day of the month)
line 24 (bonus paid December 24, 2023)
line 31 (pay day, last day of the month)

Example 2. Fir Co. is a semiweekly schedule depositor
that pays employees every other Friday. Fir Co.
accumulated a $20,000 employment tax liability on each
of these pay dates: January 6, 2023; January 20, 2023;
February 3, 2023; February 17, 2023; March 3, 2023;
March 17, 2023; and March 31, 2023. Fir Co. must report
employment tax liabilities on Schedule B as follows.

Don’t file Schedule B as an attachment to Form 944,
Employer's ANNUAL Federal Tax Return. Instead, if
you’re a semiweekly schedule depositor that is required to
file a report of tax liability with Form 944, use Form 945-A,
Annual Record of Federal Tax Liability.

Specific Instructions
Completing Schedule B

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

Enter Your Business Information

Carefully enter your employer identification number (EIN)
and name at the top of the schedule. Make sure that they
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Lines for dates wages were paid
lines 6 and 20
lines 3 and 17
lines 3, 17, and 31

Instructions for Schedule B (Form 941) (Rev. 3-2023)

any remaining credit is then used to reduce the employer
share of Medicare tax for the quarter until it reaches zero.
In completing Schedule B, you take into account the
payroll tax credit against the liability for the employer
share of social security tax starting with the first payroll
payment of the quarter that includes payments of wages
subject to social security tax to your employees until you
use up to $250,000 of credit against the employer share of
social security tax and you then take into account any
remaining payroll tax credit against the liability for the
employer share of Medicare tax starting with the first
payroll payment of the quarter that includes payments of
wages subject to Medicare tax to employees. Consistent
with the entries on Schedule B, the payroll tax credit
should be taken into account in making deposits of
employment tax. If any payroll tax credit is remaining at
the end of the quarter that hasn't been used completely
because it exceeds $250,000 of the employer share of
social security tax and the employer share of Medicare tax
for the quarter, the excess credit may be carried forward
to the succeeding quarter and allowed as a payroll tax
credit for the succeeding quarter. The payroll tax credit
may not be taken as a credit against income tax
withholding, the employee share of social security tax, or
the employee share of Medicare tax. Also, the remaining
payroll tax credit may not be carried back and taken as a
credit against wages paid from preceding quarters. For
more information about the payroll tax credit, go to
IRS.gov/ResearchPayrollTC.

Example 3. Elm Co. is a new business and monthly
schedule depositor for 2023. Elm Co. paid wages every
Friday and accumulated a $2,000 employment tax liability
on January 20, 2023. On January 27, 2023, and on every
subsequent Friday during 2023, Elm Co. accumulated a
$110,000 employment tax liability. Under the deposit
rules, employers become semiweekly schedule
depositors on the day after any day they accumulate
$100,000 or more of employment tax liability in a deposit
period. Elm Co. became a semiweekly schedule depositor
on January 28, 2023, because Elm Co. had a total
accumulated employment tax liability of $112,000 on
January 27, 2023. For more information, see section 11 of
Pub. 15 or section 8 of Pub. 80.
Elm Co. must complete Schedule B as shown next and
file it with Form 941. Elm Co. won’t check the second box
on Form 941, line 16, even though Elm Co. was a monthly
schedule depositor until January 28, 2023. Instead, Elm
Co. must check the third box on Form 941, line 16.
Month
1 (January)
1 (January)
2 (February)
3 (March)

Lines for dates wages were paid
line 20
line 27
lines 3, 10, 17, and 24
lines 3, 10, 17, 24, and 31

Amount to report
$2,000
$110,000
$110,000
$110,000

Total Liability for the Quarter

To find your total liability for the quarter, add your monthly
tax liabilities.

Example. Rose Co. is an employer with a calendar tax
year that filed its timely 2022 income tax return on April
18, 2023. Rose Co. elected to take the qualified small
business payroll tax credit for increasing research
activities on Form 6765. The third quarter of 2023 is the
first quarter that begins after Rose Co. filed the income tax
return making the payroll tax credit election. Therefore,
the payroll tax credit applies against Rose Co.'s share of
social security tax (up to $250,000) and Medicare tax on
wages paid to employees in the third quarter of 2023.
Rose Co. is a semiweekly schedule depositor. Rose Co.
completes Schedule B by reducing the amount of liability
entered for the first payroll payment in the third quarter of
2023 that includes wages subject to social security tax by
the lesser of (1) its share of social security tax (up to
$250,000) on the wages, or (2) the available payroll tax
credit. If the payroll tax credit elected is more than Rose
Co.'s share of social security tax on the first payroll
payment of the quarter, the excess payroll tax credit
would be carried forward to succeeding payroll payments
in the third quarter until it is used against up to $250,000
of Rose Co.'s share of social security tax for the quarter. If
the amount of the payroll tax credit exceeds Rose Co.'s
share of social security tax (up to $250,000) on wages
paid to its employees in the third quarter, any remaining
credit is used against Rose Co.'s share of Medicare tax on
the first payroll payment of the quarter and then the
excess payroll tax credit would be carried forward to
succeeding payroll payments in the third quarter until it is
used against Rose Co.'s share of Medicare tax for the
quarter. If Rose Co. still has credit remaining after
reducing its share of social security tax (up to $250,000)
and Medicare tax for the third quarter, the remainder
would be treated as a payroll tax credit against its share of

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 12 on Form 941; therefore, don't reduce your
CAUTION total liability reported on Schedule B by the
refundable portion of the credit for qualified sick and
family leave wages.

!

Adjusting Tax Liability for Nonrefundable
Credits Claimed on Form 941, Lines 11a, 11b,
and 11d

Semiweekly schedule depositors must account for
nonrefundable credits claimed on Form 941, lines 11a,
11b, and 11d, when reporting their tax liabilities on
Schedule B. The total tax liability for the quarter must
equal the amount reported on Form 941, line 12. Failure to
account for the nonrefundable credits on Schedule B may
cause Schedule B to report more than the total tax liability
reported on Form 941, line 12. Don't reduce your daily tax
liability reported on Schedule B below zero.
Qualified small business payroll tax credit for increasing research activities (Form 941, line 11a).
Beginning with the first quarter of 2023, the qualified small
business payroll tax credit for increasing research
activities is first used to reduce the employer share of
social security tax (up to $250,000) for the quarter and
Instructions for Schedule B (Form 941) (Rev. 3-2023)

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remaining after that share is first reduced by any credit
claimed against the employer share of Medicare tax on
Form 8974, line 16, for the qualified small business payroll
tax credit for increasing research activities. In completing
Schedule B, you take into account the entire quarter's
nonrefundable portion of the credit for qualified sick and
family leave wages paid this quarter of 2023 against the
liability for the first payroll payment of the quarter, but not
below zero. Then reduce the liability for each successive
payroll payment in the quarter until the nonrefundable
portion of the credit is used. Any credit for qualified sick
and family leave wages paid this quarter of 2023 for leave
taken after March 31, 2021, and before October 1, 2021,
that is remaining at the end of the quarter because it
exceeds the employer share of Medicare tax for the
quarter is claimed on Form 941, line 13e, as a refundable
credit. The refundable portion of the credit doesn't reduce
the liability reported on Schedule B. For more information
about the credit for qualified sick and family leave wages,
go to IRS.gov/PLC.

social security tax (up to $250,000) and Medicare tax on
wages paid in the fourth quarter. If the amount of the
payroll tax credit remaining exceeded Rose Co.'s share of
social security tax (up to $250,000) and Medicare tax on
wages paid in the fourth quarter, it could be carried
forward and treated as a payroll tax credit for the first
quarter of 2024.
Nonrefundable portion of credit for qualified sick and
family leave wages for leave taken after March 31,
2020, and before April 1, 2021 (Form 941, line 11b).
The nonrefundable portion of the credit for qualified sick
and family leave wages paid this quarter of 2023 for leave
taken after March 31, 2020, and before April 1, 2021, is
limited to the employer share of social security tax on
wages paid in the quarter that is remaining after that share
is first reduced by any credit claimed against the employer
share of social security tax on Form 8974, line 12, for the
qualified small business payroll tax credit for increasing
research activities; any credit to be claimed on Form
5884‐C, line 11, for the work opportunity credit for
qualified tax‐exempt organizations hiring qualified
veterans; and/or any credit to be claimed on Form 5884-D
for the disaster credit for qualified tax-exempt
organizations. In completing Schedule B, you take into
account the entire quarter's nonrefundable portion of the
credit for sick and family leave wages against the liability
for the first payroll payment of the quarter, but not below
zero. Then reduce the liability for each successive payroll
payment in the quarter until the nonrefundable portion of
the credit is used. Any credit for qualified sick and family
leave wages paid this quarter of 2023 for leave taken after
March 31, 2020, and before April 1, 2021, that is
remaining at the end of the quarter because it exceeds the
employer share of social security tax for the quarter is
claimed on Form 941, line 13c, as a refundable credit. The
refundable portion of the credit doesn’t reduce the liability
reported on Schedule B. For more information about the
credit for qualified sick and family leave wages, go to
IRS.gov/PLC.

You may reduce your deposits by the amount of

TIP the nonrefundable and refundable portions of the

credit for qualified sick and family leave wages.
For more information on reducing deposits, see Notice
2020-22, 2020-17 I.R.B. 664, available at IRS.gov/irb/
2020-17_IRB#NOT-2020-22; and Notice 2021-24,
2021-18 I.R.B. 1122, available at IRS.gov/irb/
2021-18_IRB#NOT-2021-24.

Correcting Previously Reported Tax Liability
Semiweekly schedule depositors. If you’ve been
assessed an FTD penalty for a quarter and you made an
error on Schedule B and the correction won’t change the
total liability for the quarter you reported on Schedule B,
you may be able to reduce your penalty by filing an
amended Schedule B.
Example. You reported a liability of $3,000 on day 1 of
month 1. However, the liability was actually for month 3.
Prepare an amended Schedule B showing the $3,000
liability on day 1 of month 3. Also, you must enter the
liabilities previously reported for the quarter that didn’t
change. Write “Amended” at the top of Schedule B. The
IRS will refigure the penalty and notify you of any change
in the penalty.

Example. Maple Co. is a semiweekly schedule
depositor that pays employees every other Friday. In the
first quarter of 2023, Maple Co. had pay dates of January
6, January 20, February 3, February 17, March 3, March
17, and March 31. Maple Co. paid qualified sick and
family leave wages on January 6 and January 20 for leave
taken after March 31, 2020, and before April 1, 2021. The
nonrefundable portion of the credit for qualified sick and
family leave wages for the quarter is $10,000. On
Schedule B (Form 941), Maple Co. will use the $10,000 to
reduce the liability for the January 6 pay date, but not
below zero. If any nonrefundable portion of the credit
remains, Maple Co. applies it to the liability for the
January 20 pay date, then the February 3 pay date, and
so forth until the entire $10,000 is used.

Monthly schedule depositors. You can file a
Schedule B if you have been assessed an FTD penalty for
a quarter and you made an error on the monthly tax
liability section of Form 941. When completing
Schedule B for this situation, only enter the monthly totals.
The daily entries aren’t required.
Where to file. File your amended Schedule B, or, for
monthly schedule depositors, your original Schedule B at
the address provided in the penalty notice you received. If
you're filing an amended Schedule B, you don’t have to
submit your original Schedule B.

Nonrefundable portion of credit for qualified sick and
family leave wages for leave taken after March 31,
2021, and before October 1, 2021 (Form 941,
line 11d). The nonrefundable portion of the credit for
qualified sick and family leave wages paid this quarter of
2023 for leave taken after March 31, 2021, and before
October 1, 2021, is limited to the employer share of
Medicare tax on wages paid in the quarter that is

Form 941-X

You may need to file an amended Schedule B with Form
941-X to avoid or reduce an FTD penalty.

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Instructions for Schedule B (Form 941) (Rev. 3-2023)

Tax decrease. If you’re filing Form 941-X for a quarter,
you can file an amended Schedule B with Form 941-X if
both of the following apply.
1. You have a tax decrease.
2. You were assessed an FTD penalty.

Paperwork Reduction Act Notice. We ask for the
information on Schedule B to carry out the Internal
Revenue laws of the United States. You’re required to
give us the information. We need it to ensure that you’re
complying with these laws and to allow us to figure and
collect the right amount of tax.

File your amended Schedule B with Form 941-X. The total
liability for the quarter reported on your amended
Schedule B must equal the corrected amount of tax
reported on Form 941-X. If your penalty is decreased, the
IRS will include the penalty decrease with your tax
decrease.

You’re 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.

Tax increase—Form 941-X filed timely. If you’re filing a
timely Form 941-X showing a tax increase, don’t file an
amended Schedule B, unless you were assessed an FTD
penalty caused by an incorrect, incomplete, or missing
Schedule B. If you’re filing an amended Schedule B, don’t
include the tax increase reported on Form 941-X.

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

Tax increase—Form 941-X filed late. If you owe tax
and are filing a late Form 941-X, that is, after the due date
of the return for the return period in which you discovered
the error, you must file an amended Schedule B with Form
941-X. Otherwise, the IRS may assess an “averaged”
FTD penalty.
The total tax reported on the “Total liability for the
quarter” line of the amended Schedule B must match the
corrected tax (Form 941, line 12, combined with any
correction reported on Form 941-X, line 23) for the
quarter, less any previous abatements and interest-free
tax assessments.

Instructions for Schedule B (Form 941) (Rev. 3-2023)

If you have comments concerning the accuracy of this
time estimate or suggestions for making Schedule B
simpler, we would be happy to hear from you. You can
send us comments from IRS.gov/FormComments. Or you
can send your comments to Internal Revenue Service,
Tax Forms and Publications Division, 1111 Constitution
Ave. NW, IR-6526, Washington, DC 20224. Don’t send
Schedule B to this address. Instead, see Where Should
You File? in the Form 941 instructions.

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