Use Form 941 to report:

• Income tax that you withheld from wages (including tips), supplemental unemployment compensation benefits, and third-party payments of sick pay.

• Social security and Medicare taxes.

You can call the IRS toll free at 1-800-829-4933 to order FTD coupons (Form 8109) and for answers to your questions about completing Form 941, tax deposit rules, or obtaining an employer identification number (EIN).

Employers who withhold income tax on wages, or who must pay social security or Medicare tax, must file Form 941 each calendar quarter. After you file your first Form 941, you must file a return for each quarter, even if you have no taxes to report (but see the seasonal employers and final return information below). If you filed Form 941 on magnetic tape or by electronic or TeleFile methods, do not also file a paper Form 941. For information about filing Form 941 electronically, see Circular E (Pub. 15), Employer's Tax Guide.

Seasonal employers are not required to file for quarters when they regularly have no tax liability because they have paid no wages. To alert the IRS that you will not have to file a return for one or more quarters during the year, check the Seasonal employers box on line B of Form 941 for each quarter. See section 12 of
Circular E (Pub.15) for more information.

Business reorganization or termination.   If you sell or transfer your business, you and the new owner must each file a return for the quarter in which the transfer occurred. Each should report only the wages it paid. A change from one form of business to another, such as from sole proprietorship to partnership or corporation, is considered a transfer and requires a new EIN. See section 1 of Circular E (Pub. 15). If a change occurs, please attach a statement to your return that shows: new owner's name (or new name of the business); whether the business is now a sole proprietorship, partnership, or corporation; kind of change (sale or transfer); and date of change.

  When two businesses merge, the continuing firm must file the return for the quarter the change took place. The other firm should file a final return.

The following will allow the IRS to process Form 941 faster and more accurately:

File starting with the first quarter in which you are required to withhold income tax or pay wages subject to social security and Medicare taxes.

If you made deposits on time in full payment of your taxes for a quarter, you have 10 more days after the above due dates to file. Your return will be considered timely filed if it is properly addressed and mailed First-Class or sent by an IRS-designated delivery service on or before the applicable due date. See Circular E (Pub. 15) for more information on IRS-designated delivery services. If the due date for filing a return falls on a Saturday, Sunday, or legal holiday, you may file your return on the next business day.

See the back of Form 941 for the mailing address for your return. Do not send Form 941 or any payments to the Social Security Administration (SSA).

Your filing or payment address may have changed from prior years. If you are using an IRS-provided envelope, use only the labels and envelope provided with this tax package.

If your net taxes (line 13) are $2,500 or more for the quarter, you must deposit your tax liabilities at an authorized financial institution with Form 8109, Federal Tax Deposit Coupon, or by using the Electronic Federal Tax Payment System (EFTPS). You may pay the taxes with Form 941 instead of depositing if your total taxes for the quarter (line 13) are less than $2,500 and you pay in full with a timely filed return. See section 11 of Circular E (Pub. 15) for information and rules concerning Federal tax deposits and to determine your status as a monthly or semiweekly schedule depositor.

Certain amounts reported on your four quarterly Forms 941 for 2003 should agree with your Form W-2, Wage and Tax Statement, totals reported on Form W-3, Transmittal of Wage and Tax Statements, or equivalent magnetic media reports (Form 6559) filed with the SSA. The amounts that should agree are: income tax withholding, social security wages, social security tips, Medicare wages and tips, and the advance earned income credit payment. If the totals do not agree, the IRS may require you to explain any differences and correct any errors. For more information, see section 12 of Circular E (Pub. 15).

There are penalties for filing a return late and paying or depositing taxes late, unless there is reasonable cause. If you file late, please attach an explanation to your return. There are also penalties for failure to: (a) furnish Forms W-2 to employees and file copies with the SSA or (b) deposit taxes when required. (Do not attach an explanation of why the return is late to Forms W-2 sent to the SSA.) In addition, there are penalties for willful failure to file returns and pay taxes when due and for filing false returns or submitting bad checks. Interest is charged on taxes paid late at the rate set by law.

A trust fund recovery penalty may apply if income, social security, and Medicare taxes that must be withheld are not withheld or are not paid. The penalty is the full amount of the unpaid trust fund tax. This penalty may apply when these unpaid taxes cannot be immediately collected from the employer or business. The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so. See section 11 in Circ. E (Pub. 15) for more information.

IRS forms and publications are available by calling 1-800-829-3676 or by accessing the IRS website at www.irs.gov. See Circular E (Pub. 15) for additional methods of obtaining forms and publications.

Each quarter, send with Form 941 copies of any Forms W-4, Employee's Withholding Allowance Certificate, received during the quarter from employees claiming: (a) more than 10 withholding allowances or (b) exemption from income tax withholding if their wages will normally be more than $200 a week. For details, see section 9 of Circular E (Pub. 15).

Each eligible employee wishing to receive any advance earned income credit (EIC) payments must give you a completed Form W-5, Earned Income Credit Advance Payment Certificate. The employer's requirement to notify certain employees about the EIC can be met by giving each eligible employee Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC). See Circular E (Pub. 15) and Pub. 596, Earned Income Credit, for more information.

If you do not have an EIN, apply for one on Form SS-4, Application for Employer Identification Number. Get this form from the IRS or the SSA. If you do not have an EIN by the time your return is due, write “Applied For” and the date you applied in the space shown for the number. Form SS-4 has information on how to apply for an EIN by mail, fax, or by telephone. You may also apply for an EIN online by visiting the IRS website at www.irs.gov/smallbiz.

If your preprinted name, EIN, or address information on Form 941 is not correct, cross it out and type or print the correct information. However, do not change any of the preprinted information on your Form 941-V Payment Voucher.