2003 HTML Instructions for Form 941-SS,

This is archived information that pertains only to the 2003 Tax Year. If you
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Table of Contents

Specific Instructions

Line 1—Number of Employees

Enter the number of employees on your payroll during the pay period including March 12 (on the January-March calendar quarter return only). Do not include household employees, persons who received no pay during the pay period, pensioners, or members of the Armed Forces.

Line 6a—Taxable Social Security Wages

Enter the total wages (before deductions and excluding tips) subject to social security tax that you paid to your employees during the quarter. See section 4 of Circular SS (Pub. 80) for information on types of wages subject to social security tax. Enter the amount before deductions. Do not include tips on this line. Also include any sick pay and taxable fringe benefits subject to social security taxes. After you reach $87,000 (including tips shown on line 6c) for an employee in 2003, do not report any amount you later pay the employee in the year. See the line 7a instructions for Medicare tax. If none of the payments are subject to social security tax, enter “-0-.”

Line 6c—Taxable Social Security Tips

Enter all tips your employees reported during the quarter until tips and wages (line 6a) for an employee reach $87,000 in 2003. Do this even if you were not able to withhold the employee tax (6.2%). However, see Adjustment of Tax on Tips on page 2.

An employee must report to you cash tips, including tips you paid to the employee for charge customers, totaling $20 or more in a month by the 10th of the next month. The employee may use Form 4070, Employee's Report of Tips to Employer, or a written statement.

Do not include allocated tips on this line. Instead, report them on Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips. Allocated tips are not reportable on Form 941-SS and are not subject to withholding of social security or Medicare taxes.

Line 7a—Taxable Medicare Wages and Tips

Report all wages and tips subject to the Medicare tax. If none of the payments are subject to the Medicare tax, enter “-0-.” Include all tips your employees reported during the quarter, even if you were not able to withhold the employee tax (1.45%). However, see Adjustment of Tax on Tips on page 2.

Line 9—Adjustment of Social Security and Medicare Taxes

Current period adjustments. In certain cases, amounts reported as social security and Medicare taxes on lines 6b, 6d, and 7b must be adjusted to arrive at your correct tax liability. Use parentheses (if possible) to show a net decrease to the amounts reported on lines 6b, 6d, and 7b. Provide a supporting statement explaining any adjustments reported in the “Other” entry space.

The most common current period adjustment is the fractions of cents (rounding) adjustment. Each pay period, you round off fractions of cents when computing social security and Medicare tax withholding for each employee. This rounding can result in a difference between the actual amount of tax withheld and deposited (with your share) and the amount of the total tax shown on line 8. If there is a difference due to fractions of cents rounding, report it as an adjustment on line 9 and in the “Fractions of Cents” entry space.

See Adjustment of Tax on Tips on page 2 for information on adjustments for uncollected tax on tips. Information on current period adjustments for group-term life insurance premiums paid for former employees and sick pay paid by a third-party payer is available in section 13 of Circular E (Pub. 15), Employer's Tax Guide.

Prior period adjustments. Use line 9 to correct errors in tax reported on an earlier return. If you report both an underpayment and an overpayment, show only the net amount. Enter the adjustments for sick pay and fractions of cents (see instructions above) in the appropriate line 9 entry spaces. Enter the amount of all other adjustments in the “Other” entry space, and enter the total of the three types of adjustments in the line 9 entry space to the right. Except for current period adjustments (see above), explain any amount on line 9 on Form 941c, Supporting Statement To Correct Information, or attach an equivalent supporting statement.

Because Form W-2AS, W-2GU, W-2CM, or W-2VI is used by the SSA to post the employee's wages to his or her earnings record, you must give a corrected form to the employee if a form was issued showing any incorrect information. Use Form W-2c, Corrected Wage and Tax Statement. Give your employees Copies B and C of Form W-2c. Send Copy A of the Form W-2c, together with Form W-3c, Transmittal of Corrected Wage and Tax Statements, to the Social Security Administration.

Line 10—Adjusted Total of Social Security and Medicare Taxes

Combine lines 8 and 9; enter the result on line 10.

Line 15—Balance Due

You do not have to pay if line 15 is under $1.

Generally, you should show a balance due only if your total tax liability for the quarter (line 10) is less than $2,500. However, see section 8 of Circular SS (Pub. 80) regarding payments made under the Accuracy of Deposits Rule. Pay to the “United States Treasury.” Enter your EIN, “Form 941-SS,” and the tax period on your payment.

If you fail to make deposits as required and instead pay these amounts with your return, you may be subject to a penalty.

Line 16—Overpayment

If you deposited more than the correct amount for a quarter, you can have the overpayment refunded or applied to your next return. Also, the IRS may apply your overpayment to any past due tax account under your EIN. If line 16 is under $1, the amount will be refunded or applied to your next return only on written request.

Line 17—Monthly Summary of Federal Tax Liability

Note:

This is a summary of your monthly tax liability, not a summary of deposits made. If line 10 is less than $2,500, do not complete line 17 or Schedule B (Form 941).

Complete line 17 only if you are a monthly schedule depositor (see Circular SS (Pub. 80), section 8, for details on the deposit rules). You are a monthly schedule depositor for the calendar year if your Form 941-SS taxes (line 10) reported for the lookback period are not more than $50,000. The lookback period is the four consecutive quarters ending on June 30 of the prior year. For 2003, the lookback period begins July 1, 2001, and ends June 30, 2002. If you reported more than $50,000 during the lookback period or accumulated $100,000 or more on any day during a month, do not complete line 17. Instead, complete and attach Schedule B (Form 941).

Third Party Designee

If you want to allow any individual, corporation, firm, organization, or partnership to discuss your Form 941-SS with the IRS, check the “Yes” box in the Third Party Designee section of the return. Also, enter the designee's name, phone number, and any five numbers the designee chooses as his or her personal identification number (PIN). The authorization applies only to the tax form on which it appears.

By checking the "Yes" box, you are authorizing the IRS to call the designee to answer any questions relating to the information reported on your tax return. You are also authorizing the designee to:

Exchange information concerning your tax return with the IRS and
Request and receive written tax return information relating to your tax return, including copies of notices, correspondence, and account transcripts.

You are not authorizing the designee to receive any refund check, bind you to anything (including additional tax liability), or otherwise represent you before the IRS. If you want to further expand the designee's authorization or want the designee to automatically receive copies of notices, see Publication 947, Practice Before the IRS and Power of Attorney.

The Third Party Designee authorization automatically expires 1 year from the due date (without regard to extensions) for filing your Form 941-SS. If you or your designee want to terminate the authorization, send a written statement of revocation to the IRS service center where the return was processed.

Privacy Act and Paperwork Reduction Act Notice.

We ask for the information on this form to carry out the Internal Revenue laws of the United States. We need it to figure and collect the right amount of tax. Subtitle C, Employment Taxes, of the Internal Revenue Code imposes employment taxes on wages. This form is used to determine the amount of the taxes that you owe. Section 6011 requires you to provide the requested information if the tax is applicable to you. Section 6109 requires you to provide your EIN. If you fail to provide this information in a timely manner, you may be subject to penalties and interest.

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 section 6103. However, section 6103 allows or requires the Internal Revenue Service to disclose or give the information shown on your tax return to others described in the Code. For example, we may disclose your tax information to the Department of Justice for civil and criminal litigation, and to cities, states, and the District of Columbia for use in administering their tax laws. We may also disclose this information to Federal and state agencies to enforce Federal nontax criminal laws and to combat terrorism. We may give this information to other countries pursuant to tax treaties.

The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is: Recordkeeping, 10 hr., 15 min.; Learning about the law or the form, 18 min.; Preparing and sending the form to the IRS, 28 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. You can write to the Tax Products Coordinating Committee, Western Area Distribution Center, Rancho Cordova, CA 95743-0001. Do not send Form 941-SS to this address. Instead, see Where To File on page 1.

Instructions for Form 941-SS - Notices