Creating Form 941 in SMART HR

The IRS requires employers to prepare and submit a Form 941 four times per year. Many employers are also required to prepare and submit Schedule B (Form 941) at the same time. In some cases, employers may also be required to submit Form 941x to report corrections to previously submitted Form 941 reports. If you need to complete Form 941x this is a manual process that will be done outside of the SMART HR (SHR) software. Contact regional staff for assistance.

Processing these forms in SHR will automate the preparation of IRS Forms 941 and 941b by doing the following:

  • Data that appears on the two types of 941 forms is stored in tables in SHR
  • Provides a window to calculate the data that will appear on Forms 941 and 941b, saves it to the database, and allows the user to make limited modifications to that data until it has been submitted
  • This window will also generate the Form 941 documents for a quarter in PDF format so they can be saved electronically as well as printed, signed, mailed, and filed for reference purposes
  • Provides a method to prevent unintended changes to the data for a previously submitted Form 941 and 941b
  • Provides a new summary report of the Form 941 data

Reference information: Click on these links to open the form(s)

Form 941

Instructions

Schedule B (Form 941)

Instructions

Form 941x

YTD Reports | Form 941 and W2 Proof

Run the Form 941 and W2 Proof report and print it to compare totals to the calculated Form 941 and Schedule B (if required) you will be creating. The amounts must match between the proof report and the four 941 quarters so W-2 totals tie out at the end of the calendar year.

Form 941 Employer’s Quarterly Federal Tax Return

If you are an employer, you must file a quarterly Form 941 to report:

  • wages you have paid
  • tips your employees have received
  • federal income tax you withheld
  • both the employer’s and employee’s share of social security and Medicare taxes

Form 941 Schedule B Report of Tax Liability for Semiweekly Schedule Depositors

Federal law requires you, as an employer, to withhold taxes from your employees’ paychecks. Schedule B (Form 941), lists your tax liability for each pay day during the quarter. Include:

  • the federal income tax you withheld from your employees’ paychecks
  • both employee and employer Medicare and social security taxes

Agency Reporting | Form 941 Calculate and Print

This window calculates the Form 941 and Schedule B (if applicable) amounts based on calendars and adjustment calendars found for the calendar year and quarter you retrieve.

Calendar Year: Enter the calendar year you are processing

Calendar Quarter: Enter the calendar quarter you are processing

Quarter 1 = January, February, March

Quarter 2 = April, May, June

Quarter 3 = July, August, September

Quarter 4 = October, November, December

You are required to enter the Employer Name, Trade Name and Address the first time you use this window. This information is saved and will be used for future submissions.

Employer Name: Enter the employee name as it appears on IRS forms

Trade Name: Enter the trade name if applicable

Address: Enter the address

City, State, Zip: Enter the city, state and zip code

Required fields are noted with a red * asterisk.

Part 1: Answer these questions for this quarter.

  • Line 11: Total deposits including any overpayments. Pull the confirmation notices from the IRS for this quarter, add your total deposits together and enter that amount into the Line 11 field. (FIT + Medicare + MedicareR + OASDI + OASDIR = the total tax deposit)
  • Line 12a: COBRA premium assistance payments. Record the 65% subsidy for COBRA participants that were eligible during the quarter. Note: The employer CANNOT claim subsidy if the COBRA participant has not paid their share. The employer takes credit against federal payroll taxes to get the subsidy payment back. The subsidy must also be recorded on the quarterly Form 941.
  • Line 12b: Number of individuals provided COBRA premium assistance reported on line 12a. Enter the number of individuals you provided COBRA premium assistance for within this quarter
  • Line 15: Overpayment Alternative. Use the ddlb to select the option of: Apply to next return or Send a refund. Selection is saved and will be used for future submissions.

Part 2: Tell us about your deposit schedule and tax liability for this quarter.

  • Line 16: Depositor Schedule. Use the ddlb to select the option of: Under $2,500, Monthly Depositor or Semiweekly Depositor. The deposit schedule is saved and will be the default for future submissions. See detail below to determine your deposit schedule.

Form 941 – Line 16

The terms “monthly schedule depositor” and “semiweekly schedule depositor” do not refer to how often your business pays its employees or even how often you are required to make deposits. The terms identify which set of deposit rules that you must follow when an employment tax liability arises. The deposit rules are based on the dates when wages are paid; not on when tax liabilities are accrued for accounting purposes.

Monthly Depositor: You are a monthly schedule depositor for a calendar year if the total taxes on line 8 of Form 941 for the four quarters in your look back period were $50,000 or less. Under the monthly deposit schedule, deposit Form 941 taxes on payments made during a month by the 15th day of the following month.

Semiweekly Depositor: You are a semiweekly schedule depositor for a calendar year if the total taxes on line 8 of Form 941 during your look back period were more than $50,000. Under the semiweekly deposit schedule, depositors have at least 3 banking days to make a deposit. That is, if any of the 3 weekdays after the end of a semiweekly period is a banking holiday, you will have 1 additional banking day to deposit.

$100,000 Next-Day Deposit Rule: If you accumulate $100,000 or more of taxes (line 10 of Form 941) on any day during a deposit period, you must deposit the tax by the next banking day, whether you are a monthly or semiweekly schedule depositor.

Part 3: Tell us about your business. If a question does NOT apply to your business, leave it blank.

If necessary, complete this part after the Form 941 has been generated.

Part 4: May the IRS speak with your third-party designee?

No is the default setting in SMART HR. If Yes – the following must be provided: Designee’s Name, Phone Number and Select a 5-Digit PIN.

Part 5: Sign here. You MUST complete both pages of Form 941 and SIGN it.

Information about the person who will sign the Form 941

  • Name, Title, Phone: Enter the name, title and phone number of the person authorized to sign the Form 941.

Note: You are required to enter the Printed Name, Title and Phone the first time you use this window. The printed name and phone are saved and used for future submissions.

Calculate and Save

After you Calculate and Save the Form 941, you can click on the Generate 941 Forms button to create and print the form(s).

Generate 941 Forms returns two forms: Form 941 and Schedule B(if you are required to file Schedule B) for the calendar year and quarter you have retrieved.

Note: You must have Adobe Acrobat Reader version 9.0 or later for this report to print. The forms are stacked one on top of another when they are created. You will see Form 941 first. If you close it you will see Schedule B (if applicable).

If you need to make changes you will repeat the above steps. When you enter the calendar year, quarter and retrieve you will be prompted with the following message because you have already saved this Form 941.

If you answer YES the “Calculate and Save” button will not be highlighted. You will be prompted with the following message.

“Calculate and Save” button will not be highlighted if you answer yes.

If you answer NO the “Calculate and Save” button will be highlighted allowing you to make changes and to recalculate the Form 941 for the quarter you have retrieved.

The 941 forms are generated using Adobe Acrobat software.

You do not have to save the forms. The forms are automatically saved when you click on “Calculate and Save”.

To view and print the files go to c:\smarthr\client\IRS folder

The quarterly Form 941 form is saved as a template with a file extension of .xdp. Schedule B is save as a template with a file extension of .fdf.

File Format Definitions

FDF stands for "Forms Data Format." FDF is a file format for representing form data and annotations that are contained in a PDF form. The FDF format was invented by Adobe Systems Incorporated, and it is based on the PDF format.

The XDP format allows a PDF file to be transformed to XML and back to a PDF without losing information. It also enables any XML program to read the PDF data. XDP files are supported by Adobe Reader, Adobe Acrobat, Adobe LiveCycle, and other Adobe programs.

It is important that you do not delete or move the f941-revyyyyxxx.pdf file(s) because the software needs to reference these original templates to open the .xdp and .fdf file(s).

YTD Reports | Form 941 Summary Report

There is a report available that summarizes tax information for the quarters selected.

Region IV – RMIC ~ 1 ~Revised 3/2012