Instructions for Form 941

Department of the Treasury

Internal Revenue Service

(Rev. March 2021)

Employer's QUARTERLY Federal Tax Return
Section references are to the Internal Revenue Code unless COVID-19, may be filed to request an advance payment for
otherwise noted. the credit for qualified sick and family leave wages through
April 30, 2021. Form 7200 may be filed to request an
Future Developments advance payment for the employee retention credit through
For the latest information about developments related to August 2, 2021. Form(s) 7200 can’t be filed for quarters
Form 941 and its instructions, such as legislation enacted beginning after March 31, 2021, unless the credit for qualified
after they were published, go to IRS.gov/Form941. sick and family leave wages is extended to leave taken after
March 31, 2021; or for quarters beginning after June 30,
At the time these instructions went to print, Congress was 2021, unless the employee retention credit is extended to
considering changes to coronavirus (COVID-19) tax relief. If wages paid after June 30, 2021. For more information,
new legislation impacts these instructions, updates will be including information on which employers are eligible to
posted to IRS.gov/Form941. You may also go to IRS.gov/ request an advance payment and the amount that can be
Coronavirus for the latest information about COVID-19 tax advanced, see the Instructions for Form 7200. To see if
relief. future legislation extends these credits, see IRS.gov/PLC,
IRS.gov/ERC, IRS.gov/Form941, and IRS.gov/Form7200.
What's New
Deferral of the employer share of social security tax ex-
Social security and Medicare tax for 2021. The rate of pired. The CARES Act allowed employers to defer the
social security tax on taxable wages, except for qualified sick deposit and payment of the employer share of social security
leave wages and qualified family leave wages, is 6.2% each tax. The deferred amount of the employer share of social
for the employer and employee or 12.4% for both. Qualified security tax was only available for deposits due on or after
sick leave wages and qualified family leave wages aren't March 27, 2020, and before January 1, 2021, as well as
subject to the employer share of social security tax; deposits and payments due after January 1, 2021, that are
therefore, the tax rate on these wages is 6.2%. The social required for wages paid on or after March 27, 2020, and
security wage base limit is $142,800. before January 1, 2021. Therefore, the line previously used
The Medicare tax rate is 1.45% each for the employee for the employer deferral has been “Reserved for future use.”
and employer, unchanged from 2020. There is no wage base One-half of the employer share of social security tax is due
limit for Medicare tax. by December 31, 2021, and the remainder is due by
December 31, 2022. Because both December 31, 2021, and
Social security and Medicare taxes apply to the wages of
December 31, 2022, are nonbusiness days, payments made
household workers you pay $2,300 or more in cash wages in
on the next business day will be considered timely. Any
2021. Social security and Medicare taxes apply to election
payments or deposits you make before December 31, 2021,
workers who are paid $2,000 or more in cash or an
are first applied against your payment due on December 31,
equivalent form of compensation in 2021.
2021, and then applied against your payment due on
The COVID-19 related employee retention credit and the December 31, 2022. For more information about the deferral
credit for qualified sick and family leave wages have of employment tax deposits, go to IRS.gov/ETD. See Paying
been extended. The Families First Coronavirus Response the deferred amount of the employer share of social security
Act (FFCRA) and the Coronavirus Aid, Relief, and Economic tax and How to pay the deferred amount of the employer and
Security (CARES) Act were both amended by recent employee share of social security tax, later, for information
legislation. The FFCRA requirement that employers provide about paying the deferred amount of the employer share of
paid sick and family leave for reasons related to COVID-19 social security tax.
(the employer mandate) expired on December 31, 2020;
Deferral of the employee share of social security tax ex-
however, the COVID-related Tax Relief Act of 2020 extends
pired. The Presidential Memorandum on Deferring Payroll
the periods for which employers providing leave that
Tax Obligations in Light of the Ongoing COVID-19 Disaster,
otherwise meets the requirements of the FFCRA may
issued on August 8, 2020, directed the Secretary of the
continue to claim tax credits for wages paid for leave taken
Treasury to defer the withholding, deposit, and payment of
before April 1, 2021. For more information about the credit for
the employee share of social security tax on wages paid
qualified sick and family leave wages, and to see if future
during the period from September 1, 2020, through
legislation extends the dates through which the credit may be
December 31, 2020. The deferral of the withholding and
claimed, go to IRS.gov/PLC.
payment of the employee share of social security tax was
The Taxpayer Certainty and Disaster Tax Relief Act of available for employees whose social security wages paid for
2020 modifies the calculation of the employee retention a biweekly pay period were less than $4,000, or the
credit and extends the date through which the credit may be equivalent threshold amount for other pay periods. The line
claimed to qualified wages paid through June 30, 2021. For previously used for the employee deferral has been
more information about the employee retention credit, and to “Reserved for future use.” The COVID-related Tax Relief Act
see if future legislation extends the dates through which the of 2020 defers the due date for the withholding and payment
credit may be claimed, go to IRS.gov/ERC. of the employee share of social security tax until the period
Advance payment of COVID-19 credits extended. Form beginning on January 1, 2021, and ending on December 31,
7200, Advance Payment of Employer Credits Due to 2021. For more information about the deferral of employee

Mar 09, 2021 Cat. No. 14625L

social security tax, see Notice 2020-65, 2020-38 I.R.B. 567, Paying the deferred amount of the employee share of
available at IRS.gov/irb/2020-38_IRB#NOT-2020-65, and social security tax. The due date for the withholding and
Notice 2021-11, 2021-06 I.R.B. 827, available at IRS.gov/irb/ payment of the employee share of social security tax is
2021-06_IRB#NOT-2021-11. Also see Paying the deferred postponed until the period beginning on January 1, 2021,
amount of the employee share of social security tax and How and ending on December 31, 2021. The employer must
to pay the deferred amount of the employer and employee withhold and pay the total deferred employee share of social
share of social security tax, later, for information about paying security tax ratably from wages paid to the employee
the deferred amount of the employee share of social security between January 1, 2021, and December 31, 2021. If
tax. For information about how to report the deferred amount necessary, the employer may make arrangements to
of the employee share of social security tax on Form W-2 and otherwise collect the total deferred taxes from the employee.
Form W-2c for 2020, see IRS.gov/FormW2 and the 2021 The employer is liable to pay the deferred taxes to the IRS
General Instructions for Forms W-2 and W-3. and must do so before January 1, 2022, to avoid interest,
New payroll tax credit for certain tax-exempt organiza- penalties, and additions to tax on those amounts. Because
tions affected by qualified disasters. Section 303(d) of January 1, 2022, is a nonbusiness day, payments made on
the Taxpayer Certainty and Disaster Tax Relief Act of 2020 January 3, 2022, will be considered timely. For more
allows for a new payroll tax credit for certain tax-exempt information about the deferral of the employee share of social
organizations affected by certain qualified disasters not security tax, see Notice 2020-65 and Notice 2021-11.
related to COVID-19. This credit may still be available to How to pay the deferred amount of the employer and
certain tax-exempt organizations during the first and second employee share of social security tax. You may pay the
quarters of 2021. This new credit will be claimed on new amount you owe electronically using the Electronic Federal
Form 5884-D (not on Form 941). Form 5884-D is filed after Tax Payment System (EFTPS), by credit or debit card, or by
the Form 941 for the quarter for which the credit is being a check or money order. The preferred method of payment is
claimed has been filed. If you will claim this credit on Form EFTPS. For more information, go to EFTPS.gov, or call 800-
5884-D for a calendar quarter of 2021 and you're also 555-4477 or 800-733-4829 (TDD). To pay the deferred
claiming a credit for qualified sick and family leave wages amount using EFTPS, select Form 941, the calendar quarter
and/or the employee retention credit in that quarter, you must in 2020 to which the payment relates, and the option for
include any credit that will be claimed on Form 5884-D on payment due on an IRS notice. The IRS expects EFTPS to
Worksheet 1 for the Form 941 for that quarter. For more be updated on or around March 19, 2021, to provide a
information about this credit, go to IRS.gov/Form5884D. specific option to pay the deferred amount in lieu of selecting
Don't use an earlier revision of Form 941 to report the option of making a payment due on an IRS notice.
! taxes for 2021. Don't use the March 2021 revision of To pay by credit or debit card, go to IRS.gov/PayByCard.
CAUTION Form 941 to report taxes for any quarter ending If you pay by check or money order, include a 2020 Form
before January 1, 2021. Prior revisions of Form 941 are 941-V, Payment Voucher, for the quarter in which you
available at IRS.gov/Form941 (select the link for “All Form originally deferred the deposit and payment. Darken the
941 Revisions” under “Other Items You May Find Useful”). circle identifying the quarter for which the payment is being
made. The 2020 Form 941-V is on page 5 of Form 941 and is
Reminders available at IRS.gov/Form941 (select the link for “All Form
941 Revisions” under “Other Items You May Find Useful”).
Paying the deferred amount of the employer share of Make the check or money order payable to “United States
social security tax. One-half of the employer share of Treasury.” Enter your EIN, “Form 941,” and the calendar
social security tax is due by December 31, 2021, and the quarter in which you originally deferred the deposit and
remainder is due by December 31, 2022. Because both payment (for example, “2nd Quarter 2020”).
December 31, 2021, and December 31, 2022, are
Payments should be sent to:
nonbusiness days, payments made on the next business day
will be considered timely. Any payments or deposits you
make before December 31, 2021, are first applied against Department of the Treasury Department of the Treasury
your payment due on December 31, 2021, and then applied Internal Revenue Service or Internal Revenue Service
against your payment due on December 31, 2022. For Ogden, UT 84201-0030 Kansas City, MO
64999-0030
example, if your employer share of social security tax for the
third quarter of 2020 was $20,000 and you deposited $5,000
of the $20,000 during the third quarter of 2020 and you
deferred $15,000 on Form 941, line 13b, then you must pay Send your payment to the address above that is in the
$5,000 by December 31, 2021, and $10,000 by December same state as the address to which you would mail returns
31, 2022. However, if your employer share of social security filed without a payment, as shown under Where Should You
tax for the third quarter of 2020 was $20,000 and you File, later. For more information about the deferral of social
deposited $15,000 of the $20,000 during the third quarter of security tax, go to IRS.gov/ETD and see Notice 2020-65 and
2020 and you deferred $5,000 on Form 941, line 13b, then Notice 2021-11.
you don’t need to pay any deferred amount by December 31, 2021 withholding tables. The federal income tax
2021, because 50% of the amount that could have been withholding tables are included in Pub. 15-T, Federal Income
deferred ($10,000) has already been paid and is first applied Tax Withholding Methods.
against your payment that would be due on December 31,
2021. Accordingly, you must pay the $5,000 deferral by Qualified small business payroll tax credit for increas-
December 31, 2022. For additional information, go to ing research activities. For tax years beginning after 2015,
IRS.gov/ETD. a qualified small business may elect to claim up to $250,000
of its credit for increasing research activities as a payroll tax
credit against the employer share of social security tax. The

-2- Instructions for Form 941 (Rev. 3-2021)

payroll tax credit election must be made on or before the due compensation paid to the individual by the CPEO. However,
date of the originally filed income tax return (including with respect to certain employees covered by a CPEO
extensions). The portion of the credit used against the contract, you may also be treated as an employer of the
employer share of social security tax is allowed in the first employees and, consequently, may also be liable for federal
calendar quarter beginning after the date that the qualified employment taxes imposed on wages and other
small business filed its income tax return. The election and compensation paid by the CPEO to such employees. For
determination of the credit amount that will be used against more information on the different types of third-party payer
the employer share of social security tax are made on Form arrangements, see section 16 of Pub. 15.
6765, Credit for Increasing Research Activities. The amount
Aggregate Form 941 filers. Approved section 3504 agents
from Form 6765, line 44, must then be reported on Form
and CPEOs must complete and file Schedule R (Form 941)
8974, Qualified Small Business Payroll Tax Credit for
when filing an aggregate Form 941. Aggregate Forms 941
Increasing Research Activities. Form 8974 is used to
are filed by agents approved by the IRS under section 3504.
determine the amount of the credit that can be used in the
To request approval to act as an agent for an employer, the
current quarter. The amount from Form 8974, line 12, is
agent files Form 2678 with the IRS unless you're a state or
reported on Form 941, line 11a. If you’re claiming the
local government agency acting as an agent under the
research payroll tax credit on your Form 941, you must attach
special procedures provided in Rev. Proc. 2013-39, 2013-52
Form 8974 to that Form 941. For more information about the
I.R.B. 830, available at IRS.gov/irb/
payroll tax credit, see Notice 2017-23, 2017-16 I.R.B. 1100,
2013-52_IRB#RP-2013-39. Aggregate Forms 941 are also
available at IRS.gov/irb/2017-16_IRB#NOT-2017-23, and
filed by CPEOs approved by the IRS under section 7705. To
IRS.gov/ResearchPayrollTC. Also see Adjusting tax liability
become a CPEO, the organization must apply through the
for nonrefundable credits claimed on lines 11a, 11b, and 11c,
IRS Online Registration System at IRS.gov/CPEO. CPEOs
later.
file Form 8973, Certified Professional Employer
Certification program for professional employer organi- Organization/Customer Reporting Agreement, to notify the
zations (PEOs). The Stephen Beck, Jr., ABLE Act of 2014 IRS that they started or ended a service contract with a
required the IRS to establish a voluntary certification program customer. CPEOs must generally file Form 941 and
for PEOs. PEOs handle various payroll administration and Schedule R (Form 941) electronically. For more information
tax reporting responsibilities for their business clients and are about a CPEO’s requirement to file electronically, see Rev.
typically paid a fee based on payroll costs. To become and Proc. 2017-14, 2017-3 I.R.B. 426, available at IRS.gov/irb/
remain certified under the certification program, certified 2017-03_IRB#RP-2017-14. The June 2020 revision of
professional employer organizations (CPEOs) must meet Schedule R won't be revised for 2021. If a line on Form 941 is
various requirements described in sections 3511 and 7705 “Reserved for future use,” don't enter any amounts in the
and related published guidance. Certification as a CPEO corresponding columns on Schedule R.
may affect the employment tax liabilities of both the CPEO Other third-party payers that file aggregate Forms 941,
and its customers. A CPEO is generally treated for such as non-certified PEOs, must complete and file
employment tax purposes as the employer of any individual Schedule R (Form 941) if they have clients that are claiming
who performs services for a customer of the CPEO and is the qualified small business payroll tax credit for increasing
covered by a contract described in section 7705(e)(2) research activities, the credit for qualified sick and family
between the CPEO and the customer (CPEO contract), but leave wages, or the employee retention credit.
only for wages and other compensation paid to the individual
by the CPEO. To become a CPEO, the organization must If both an employer and a section 3504 authorized
apply through the IRS Online Registration System. For more TIP agent (or CPEO or other third-party payer) paid
information or to apply to become a CPEO, go to IRS.gov/ wages to an employee during a quarter, both the
CPEO. employer and the section 3504 authorized agent (or CPEO or
other third-party payer, if applicable) should file Form 941
CPEOs must generally file Form 941 and Schedule R
reporting the wages each entity paid to the employee during
(Form 941), Allocation Schedule for Aggregate Form 941
the applicable quarter and issue Forms W-2 reporting the
Filers, electronically. For more information about a CPEO’s
wages each entity paid to the employee during the year.
requirement to file electronically, see Rev. Proc. 2017-14,
2017-3 I.R.B. 426, available at IRS.gov/irb/ If a third-party payer of sick pay is also paying qualified
2017-03_IRB#RP-2017-14. sick leave wages on behalf of an employer, the third party
would be making the payments as an agent of the employer.
Outsourcing payroll duties. Generally, as an employer,
The employer is required to do the reporting and payment of
you're responsible to ensure that tax returns are filed and
employment taxes with respect to the qualified sick leave
deposits and payments are made, even if you contract with a
wages and claim the credit for the qualified sick leave wages,
third party to perform these acts. You remain responsible if
unless the employer has an agency agreement with the
the third party fails to perform any required action. Before you
third-party payer that requires the third-party payer to do the
choose to outsource any of your payroll and related tax
collecting, reporting, and/or paying or depositing employment
duties (that is, withholding, reporting, and paying over social
taxes on the qualified sick leave wages. If the employer has
security, Medicare, FUTA, and income taxes) to a third-party
an agency agreement with the third-party payer, the
payer, such as a payroll service provider or reporting agent,
third-party payer includes the qualified sick leave wages on
go to IRS.gov/OutsourcingPayrollDuties for helpful
the third party's aggregate Form 941, claims the sick leave
information on this topic. If a CPEO pays wages and other
credit on behalf of the employer on the aggregate Form 941,
compensation to an individual performing services for you,
and separately reports the credit allocable to the employers
and the services are covered by a contract described in
on Schedule R (Form 941). See section 6 of Pub. 15-A,
section 7705(e)(2) between you and the CPEO (CPEO
Employer's Supplemental Tax Guide, for more information
contract), then the CPEO is generally treated for employment
about sick pay reporting.
tax purposes as the employer, but only for wages and other

Instructions for Form 941 (Rev. 3-2021) -3-

Work opportunity tax credit for qualified tax-exempt or- • For EFTPS, go to EFTPS.gov, or call EFTPS Customer
ganizations hiring qualified veterans. Qualified Service at 800-555-4477 or 800-733-4829 (TDD) for
tax-exempt organizations that hire eligible unemployed additional information.
veterans may be able to claim the work opportunity tax credit • For electronic filing of Forms W-2, Wage and Tax
against their payroll tax liability using Form 5884-C. For more Statement, go to SSA.gov/employer. You may be required to
information, go to IRS.gov/WOTC. file Forms W-2 electronically. For details, see the General
Instructions for Forms W-2 and W-3.
Correcting a previously filed Form 941. If you discover
an error on a previously filed Form 941, make the correction If you’re filing your tax return or paying your federal
using Form 941-X. Form 941-X is filed separately from Form ! taxes electronically, a valid employer identification
CAUTION number (EIN) is required at the time the return is filed
941. For more information, see the Instructions for Form
941-X, section 13 of Pub. 15, or go to IRS.gov/ or the payment is made. If a valid EIN isn't provided, the
CorrectingEmploymentTaxes. return or payment won't be processed. This may result in
penalties. See Employer identification number (EIN), later, for
Federal tax deposits must be made by electronic funds information about applying for an EIN.
transfer (EFT). You must use EFT to make all federal tax
deposits. Generally, an EFT is made using EFTPS. If you Electronic funds withdrawal (EFW). If you file Form 941
don't want to use EFTPS, you can arrange for your tax electronically, you can e-file and use EFW to pay the balance
professional, financial institution, payroll service, or other due in a single step using tax preparation software or through
trusted third party to make electronic deposits on your behalf. a tax professional. However, don't use EFW to make federal
Also, you may arrange for your financial institution to initiate a tax deposits. For more information on paying your taxes
same-day wire payment on your behalf. EFTPS is a free using EFW, go to IRS.gov/EFW.
service provided by the Department of the Treasury. Credit or debit card payments. You can pay the balance
Services provided by your tax professional, financial due shown on Form 941 by credit or debit card. Your
institution, payroll service, or other third party may have a payment will be processed by a payment processor who will
fee. charge a processing fee. Don't use a credit or debit card to
For more information on making federal tax deposits, see make federal tax deposits. For more information on paying
section 11 of Pub. 15. To get more information about EFTPS your taxes with a credit or debit card, go to IRS.gov/
or to enroll in EFTPS, go to EFTPS.gov, or call 800-555-4477 PayByCard.
or 800-733-4829 (TDD). Additional information about EFTPS
Online payment agreement. You may be eligible to apply
is also available in Pub. 966.
for an installment agreement online if you can't pay the full
For an EFTPS deposit to be on time, you must amount of tax you owe when you file your return. For more
! submit the deposit by 8 p.m. Eastern time the day information, see What if you can't pay in full, later.
before the date the deposit is due.
Paid preparers. If you use a paid preparer to complete
CAUTION

Same-day wire payment option. If you fail to submit a Form 941, the paid preparer must complete and sign the paid
deposit transaction on EFTPS by 8 p.m. Eastern time the day preparer's section of the form.
before the date a deposit is due, you can still make your Where can you get telephone help? For answers to your
deposit on time by using the Federal Tax Collection Service questions about completing Form 941 or tax deposit rules,
(FTCS) to make a same-day wire payment. To use the you can call the IRS at 800-829-4933 or 800-829-4059
same-day wire payment method, you will need to make (TDD/TTY for persons who are deaf, hard of hearing, or have
arrangements with your financial institution ahead of time. a speech disability), Monday–Friday from 7:00 a.m. to 7:00
Please check with your financial institution regarding p.m. local time (Alaska and Hawaii follow Pacific time).
availability, deadlines, and costs. Your financial institution
may charge you a fee for payments made this way. To learn Photographs of missing children. The IRS is a proud
more about the information you will need to give your partner with the National Center for Missing & Exploited
financial institution to make a same-day wire payment, go to Children® (NCMEC). Photographs of missing children
IRS.gov/SameDayWire. selected by the Center may appear in instructions on pages
Timeliness of federal tax deposits. If a deposit is that would otherwise be blank. You can help bring these
required to be made on a day that isn't a business day, the children home by looking at the photographs and calling
deposit is considered timely if it is made by the close of the 1-800-THE-LOST (1-800-843-5678) if you recognize a child.
next business day. A business day is any day other than a
Saturday, Sunday, or legal holiday. The term “legal holiday”
for deposit purposes includes only those legal holidays in the
General Instructions:
District of Columbia. Legal holidays in the District of Purpose of Form 941
Columbia are provided in section 11 of Pub. 15.
Electronic filing and payment. Businesses can enjoy the These instructions give you some background information
benefits of filing tax returns and paying their federal taxes about Form 941. They tell you who must file Form 941, how
electronically. Whether you rely on a tax professional or to complete it line by line, and when and where to file it.
handle your own taxes, the IRS offers you convenient If you want more in-depth information about payroll tax
programs to make filing and paying easier. Spend less time topics relating to Form 941, see Pub. 15 or go to IRS.gov/
worrying about taxes and more time running your business. EmploymentTaxes.
Use e-file and EFTPS to your benefit.
• For e-file, go to IRS.gov/EmploymentEfile for additional Federal law requires you, as an employer, to withhold
information. A fee may be charged to file electronically. 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

-4- Instructions for Form 941 (Rev. 3-2021)

tax, and Medicare tax. You must also withhold Additional Requesting To File Forms 941 Instead of Form
Medicare Tax from wages you pay to an employee in excess 944, or Requesting To File Form 944 Instead of
of $200,000 in a calendar year. Under the withholding
system, taxes withheld from your employees are credited to Forms 941
your employees in payment of their tax liabilities. Requesting to file Forms 941 instead of Form 944.
Employers that would otherwise be required to file Form 944,
Federal law also requires you to pay any liability for the
Employer's ANNUAL Federal Tax Return, may contact the
employer share of social security and Medicare taxes. This
IRS to request to file quarterly Forms 941 instead of annual
share of social security and Medicare taxes isn't withheld
Form 944. To request to file quarterly Forms 941 to report
from employees.
your social security and Medicare taxes for the 2021
Who Must File Form 941? calendar year, you must either call the IRS at 800-829-4933
between January 1, 2021, and April 1, 2021, or send a
If you pay wages subject to federal income tax withholding or written request postmarked between January 1, 2021, and
social security and Medicare taxes, you must file Form 941 March 15, 2021. After you contact the IRS, the IRS will send
quarterly to report the following amounts. you a written notice that your filing requirement has been
• Wages you’ve paid. changed to Forms 941. You must receive written notice from
• Tips your employees reported to you. the IRS to file Forms 941 instead of Form 944 before you
• Federal income tax you withheld. may file these forms. If you don't receive this notice, you must
• Both the employer and the employee share of social file Form 944 for calendar year 2021.
security and Medicare taxes.
Requesting to file Form 944 instead of Forms 941. If
• Additional Medicare Tax withheld from employees. you’re required to file Forms 941 but believe your
• Current quarter's adjustments to social security and employment taxes for calendar year 2021 will be $1,000 or
Medicare taxes for fractions of cents, sick pay, tips, and
less, you may request to file Form 944 instead of Forms 941
group-term life insurance.
by calling the IRS at 800-829-4933 between January 1, 2021,
• Qualified small business payroll tax credit for increasing and April 1, 2021, or sending a written request postmarked
research activities.
between January 1, 2021, and March 15, 2021. After you
• Credit for qualified sick and family leave wages. contact the IRS, the IRS will send you a written notice that
• Employee retention credit. your filing requirement has been changed to Form 944. You
• Total advances received from filing Form(s) 7200 for the must receive written notice from the IRS to file Form 944
quarter.
instead of Forms 941 before you may file this form. If you
Don't use Form 941 to report backup withholding or don't receive this notice, you must file Forms 941 for calendar
income tax withholding on nonpayroll payments such as year 2021.
pensions, annuities, and gambling winnings. Report these Where to send written requests. Written requests should
types of withholding on Form 945, Annual Return of Withheld be sent to:
Federal Income Tax. Also, don't use Form 941 to report
unemployment taxes. Report unemployment taxes on Form
Department of the Treasury Department of the Treasury
940, Employer's Annual Federal Unemployment (FUTA) Tax
Internal Revenue Service or Internal Revenue Service
Return.
Ogden, UT 84201-0038 Cincinnati, OH 45999-0038
After you file your first Form 941, you must file a return for
each quarter, even if you have no taxes to report, unless you
filed a final return or one of the exceptions listed next applies. If you would mail your return filed without a payment to
Ogden, as shown under Where Should You File, later, send
Exceptions your request to the Ogden address shown above. If you
Special rules apply to some employers. would mail your return filed without a payment to Kansas
• If you received notification to file Form 944, you must file City, send your request to the address for Cincinnati shown
Form 944 annually; don't file Form 941 quarterly. above. For more information about these procedures, see
• Seasonal employers don't have to file a Form 941 for Rev. Proc. 2009-51, 2009-45 I.R.B. 625, available at
quarters in which they have no tax liability because they have IRS.gov/irb/2009-45_IRB#RP-2009-51.
paid no wages. To tell the IRS that you won't file a return for
one or more quarters during the year, check the box on What if You Reorganize or Close Your
line 18 every quarter you file Form 941. See section 12 of Business?
Pub. 15 for more information.
If You Sell or Transfer Your Business . . .
• Employers of household employees don't usually file
Form 941. See Pub. 926 and Schedule H (Form 1040) for If you sell or transfer your business during the quarter, you
more information. and the new owner must each file a Form 941 for the quarter
• Employers of farm employees don't file Form 941 for in which the transfer occurred. Report only the wages you
wages paid for agricultural labor. See Form 943 and Pub. 51 paid.
for more information.
When two businesses merge, the continuing firm must file
If none of the these exceptions apply and you haven't
a return for the quarter in which the change took place and
TIP filed a final return, you must file Form 941 each the other firm should file a final return.
quarter even if you didn't pay wages during the
quarter. Use IRS e-file, if possible.
Changing from one form of business to another—such as
from a sole proprietorship to a partnership or corporation—is
considered a transfer. If a transfer occurs, you may need a

Instructions for Form 941 (Rev. 3-2021) -5-

new EIN. See Pub. 1635 and section 1 of Pub. 15 for more month that follows the end of the quarter. For example, you
information. may file Form 941 by May 10 if you made timely deposits in
full payment of your taxes for the 1st quarter.
Attach a statement to your return with:
• The new owner's name (or the new name of the business); If we receive Form 941 after the due date, we will treat
• Whether the business is now a sole proprietorship, Form 941 as filed on time if the envelope containing Form
partnership, or corporation; 941 is properly addressed, contains sufficient postage, and is
• The kind of change that occurred (a sale or transfer); postmarked by the U.S. Postal Service on or before the due
• The date of the change; and date, or sent by an IRS-designated private delivery service
• The name of the person keeping the payroll records and (PDS) on or before the due date. If you don't follow these
the address where those records will be kept. guidelines, we will generally consider Form 941 filed when it
is actually received. For more information about PDSs, see
If Your Business Has Closed . . . Where Should You File, later.
If you permanently go out of business or stop paying wages If any due date for filing falls on a Saturday, Sunday, or
to your employees, you must file a final return. To tell the IRS legal holiday, you may file your return on the next business
that Form 941 for a particular quarter is your final return, day.
check the box on line 17 and enter the final date you paid
wages. Also attach a statement to your return showing the How Should You Complete Form 941?
name of the person keeping the payroll records and the
address where those records will be kept. Type or print your EIN, name, and address in the spaces
provided. Also enter your name and EIN on the top of pages
See Terminating a business in the General Instructions for 2 and 3. Don't use your social security number (SSN) or
Forms W-2 and W-3 for information about earlier dates for individual taxpayer identification number (ITIN). Generally,
the expedited furnishing and filing of Forms W-2 when a final enter the business (legal) name you used when you applied
Form 941 is filed. for your EIN. For example, if you’re a sole proprietor, enter
“Haleigh Smith” on the “Name” line and “Haleigh's Cycles” on
If you participated in a statutory merger or consolidation, the “Trade name” line. Leave the “Trade name” line blank if it
or qualify for predecessor-successor status due to an is the same as your “Name.”
acquisition, you should generally file Schedule D (Form 941),
Report of Discrepancies Caused by Acquisitions, Statutory If you use a tax preparer to fill out Form 941, make sure
Mergers, or Consolidations. See the Instructions for the preparer shows your business name exactly as it
Schedule D (Form 941) to determine whether you should file appeared when you applied for your EIN.
Schedule D (Form 941) and when you should file it. Employer identification number (EIN). To make sure
businesses comply with federal tax laws, the IRS monitors
When Must You File? tax filings and payments by using a numerical system to
identify taxpayers. A unique nine-digit EIN is assigned to all
File your initial Form 941 for the quarter in which you first paid
corporations, partnerships, and some sole proprietors.
wages that are subject to social security and Medicare taxes
Businesses needing an EIN must apply for a number and use
or subject to federal income tax withholding. See the table
it throughout the life of the business on all tax returns,
titled When To File Form 941, later.
payments, and reports.
Then you must file for every quarter after that—every 3 Your business should have only one EIN. If you have more
months—even if you have no taxes to report, unless you’re a than one and aren't sure which one to use, write to the IRS
seasonal employer or are filing your final return. See office where you file your returns (using the Without a
Seasonal employers and If Your Business Has Closed, payment address under Where Should You File, later) or call
earlier. the IRS at 800-829-4933.
File Form 941 only once for each quarter. If you filed If you don't have an EIN, you may apply for one online by
electronically, don't file a paper Form 941. For more visiting IRS.gov/EIN. You may also apply for an EIN by faxing
information about filing Form 941 electronically, see or mailing Form SS-4 to the IRS. If the principal business was
Electronic filing and payment, earlier. created or organized outside of the United States or U.S.
territories, you may also apply for an EIN by calling
When To File Form 941 267-941-1099 (toll call). If you haven't received your EIN by
the due date of Form 941, file a paper return and write
Your Form 941 is due by the last day of the month that follows the end of the “Applied For” and the date you applied in this entry space.
quarter.
If you’re filing your tax return electronically, a valid
Form 941
! EIN is required at the time the return is filed. If a valid
The Quarter Includes . . . Quarter Ends Is Due
CAUTION EIN isn't provided, the return won't be accepted. This

1. January, February, March March 31 April 30 may result in penalties.

2. April, May, June June 30 July 31
3. July, August, September September 30 October 31 Always be sure the EIN on the form you file exactly
4. October, November, December December 31 January 31 TIP matches the EIN the IRS assigned to your business.
Don't use your SSN or ITIN on forms that ask for an
For example, you must generally report wages you pay EIN. If you used an EIN (including a prior owner's EIN) on
during the first quarter—which is January through March—by Form 941 that is different from the EIN reported on Form
April 30. If you made timely deposits in full payment of your W-3, see Box h—Other EIN used this year in the General
taxes for the quarter, you may file by the 10th day of the 2nd Instructions for Forms W-2 and W-3. Filing a Form 941 with

-6- Instructions for Form 941 (Rev. 3-2021)

an incorrect EIN or using another business's EIN may result • Form W-2 which has the required information about the
in penalties and delays in processing your return. EIC on the back of Copy B.
• A substitute Form W-2 with the same EIC information on
If you change your business name, business address, the back of the employee's copy that is on Copy B of the IRS
or responsible party... Notify the IRS immediately if you Form W-2.
change your business name, business address, or • Notice 797, Possible Federal Tax Refund Due to the
responsible party. Earned Income Credit (EIC).
• Write to the IRS office where you file your returns (using • Your written statement with the same wording as
the Without a payment address under Where Should You Notice 797.
File, later) to notify the IRS of any business name change.
See Pub.1635 to see if you need to apply for a new EIN. For more information, see section 10 of Pub. 15, Pub. 596,
• Complete and mail Form 8822-B to notify the IRS of a and IRS.gov/EIC.
business address or responsible party change. Don't mail
Form 8822-B with your Form 941. For a definition of
Reconciling Forms 941 and Form W-3
“responsible party,” see the Instructions for Form SS-4. The IRS matches amounts reported on your four quarterly
Forms 941 with Form W-2 amounts totaled on your yearly
Check the Box for the Quarter Form W-3, Transmittal of Wage and Tax Statements. If the
Under “Report for this Quarter of 2021” at the top of Form amounts don't agree, you may be contacted by the IRS or the
941, check the appropriate box of the quarter for which Social Security Administration (SSA). The following amounts
you’re filing. Make sure the quarter checked is the same as are reconciled.
shown on any attached Schedule B (Form 941), Report of • Federal income tax withholding.
Tax Liability for Semiweekly Schedule Depositors, and, if • Social security wages.
applicable, Schedule R (Form 941). • Social security tips.
• Medicare wages and tips.
Completing and Filing Form 941 For more information, see section 12 of Pub. 15 and the
Make entries on Form 941 as follows to enable accurate Instructions for Schedule D (Form 941).
scanning and processing.
• Use 10-point Courier font (if possible) for all entries if Where Should You File?
you’re typing or using a computer to complete your form.
Portable Document Format (PDF) forms on IRS.gov have You’re encouraged to file Form 941 electronically. Go to
fillable fields with acceptable font specifications. IRS.gov/EmploymentEfile for more information on electronic
• Don't enter dollar signs and decimal points. Commas are filing. If you file a paper return, where you file depends on
optional. Enter dollars to the left of the preprinted decimal whether you include a payment with Form 941. Mail your
point and cents to the right of it. Don’t round entries to whole return to the address listed for your location in the table that
dollars. Always show an amount for cents, even if it is zero. follows.
• Leave blank any data field (except lines 1, 2, and 12) with PDSs can't deliver to P.O. boxes. You must use the U.S.
a value of zero. Postal Service to mail an item to a P.O. box address. Go to
• Enter negative amounts using a minus sign (if possible). IRS.gov/PDS for the current list of PDSs. For the IRS mailing
Otherwise, use parentheses. address to use if you’re using a PDS, go to IRS.gov/
• Enter your name and EIN on all pages. PDSstreetAddresses. Select the mailing address listed on
• Enter your name, EIN, “Form 941,” and the tax year and the webpage that is in the same state as the address to
quarter on all attachments. which you would mail returns filed without a payment, as
• Staple multiple sheets in the upper left corner when filing. shown next.
Complete all three pages. You must complete all three
pages of Form 941 and sign on page 3. Failure to do so may
delay processing of your return.

Required Notice to Employees About the

Earned Income Credit (EIC)
To notify employees about the EIC, you must give the
employees one of the following items.

Instructions for Form 941 (Rev. 3-2021) -7-

Mailing Addresses for Form 941

If you’re in . . . Without a payment . . . With a payment . . .

Connecticut, Delaware, District of Columbia, Georgia, Illinois, Indiana, Department of the Treasury Internal Revenue Service
Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, Internal Revenue Service P.O. Box 806532
New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Kansas City, MO 64999-0005 Cincinnati, OH 45280-6532
South Carolina, Tennessee, Vermont, Virginia, West Virginia, Wisconsin

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Hawaii, Department of the Treasury Internal Revenue Service
Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Internal Revenue Service P.O. Box 932100
Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Ogden, UT 84201-0005 Louisville, KY 40293-2100
Dakota, Texas, Utah, Washington, Wyoming

No legal residence or principal place of business in any state Internal Revenue Service Internal Revenue Service
P.O. Box 409101 P.O. Box 932100
Ogden, UT 84409 Louisville, KY 40293-2100

Special filing address for exempt organizations; federal, state, and local Department of the Treasury Internal Revenue Service
governmental entities; and Indian tribal governmental entities, regardless of Internal Revenue Service P.O. Box 932100
location Ogden, UT 84201-0005 Louisville, KY 40293-2100

Your filing address may have changed from that IRS.gov/ERC and IRS.gov/PLC for more information,
! used to file your employment tax return in prior years. including examples, about reducing deposits. See the
CAUTION Don't send Form 941 or any payments to the SSA. instructions for line 16, later, for information on adjusting tax
liabilities reported on line 16 or Schedule B (Form 941) for
Depositing Your Taxes nonrefundable credits.

You must deposit all depository taxes electronically When Must You Deposit Your Taxes?
! by EFT. For more information, see Federal tax
CAUTION deposits must be made by electronic funds transfer
Determine if You’re a Monthly or Semiweekly
(EFT) under Reminders, earlier. Schedule Depositor for the Quarter
The IRS uses two different sets of deposit rules to determine
Must You Deposit Your Taxes? when businesses must deposit their social security,
Medicare, and withheld federal income taxes. These
You may have to deposit the federal income taxes you
schedules tell you when a deposit is due after you have a
withheld and both the employer and employee social security
payday.
taxes and Medicare taxes.
• If your total taxes after adjustments and Your deposit schedule isn't determined by how often you
nonrefundable credits (line 12) are less than $2,500 for pay your employees. Your deposit schedule depends on the
the current quarter or the prior quarter, and you didn't total tax liability you reported on Form 941 during the
incur a $100,000 next-day deposit obligation during the previous 4-quarter lookback period (July 1 of the second
current quarter. You don't have to make a deposit. To avoid preceding calendar year through June 30 of the preceding
a penalty, you must pay any amount due in full with a timely calendar year). See section 11 of Pub. 15 for details. If you
filed return or you must deposit any amount you owe by the filed Form 944 in either 2019 or 2020, your lookback period is
due date of the return. For more information on paying with a the 2019 calendar year.
timely filed return, see the instructions for line 14, later. If
you’re not sure your total tax liability for the current quarter Before the beginning of each calendar year, determine
will be less than $2,500 (and your liability for the prior quarter which type of deposit schedule you must use.
wasn't less than $2,500), make deposits using the • If you reported $50,000 or less in taxes during the
semiweekly or monthly rules so you won't be subject to lookback period, you’re a monthly schedule depositor.
failure-to-deposit (FTD) penalties. • If you reported more than $50,000 of taxes during the
• If your total taxes after adjustments and lookback period, you’re a semiweekly schedule depositor.
nonrefundable credits (line 12) are $2,500 or more for
the current quarter and the prior quarter. You must make If you’re a monthly schedule depositor and
deposits according to your deposit schedule. See section 11 ! accumulate a $100,000 tax liability on any day during
CAUTION the deposit period, you become a semiweekly
of Pub. 15 for information about payments made under the
accuracy of deposits rule and for rules about federal tax schedule depositor on the next day and remain so for at least
deposits. the rest of the calendar year and for the following calendar
year. See $100,000 Next-Day Deposit Rule in section 11 of
Reducing your deposits for COVID-19 credits. Pub. 15 for more information. The $100,000 tax liability
Employers eligible to claim the credit for qualified sick and threshold requiring a next-day deposit is determined before
family leave wages and/or the employee retention credit can you consider any reduction of your liability for nonrefundable
reduce their deposits by the amount of their anticipated credits. For more information, including an example, see
credits. Employers won’t be subject to an FTD penalty for frequently asked question 17 at IRS.gov/ETD.
reducing their deposits if certain conditions are met. See the
instructions for line 11b and line 11c for more information on
these credits. 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. Also see

-8- Instructions for Form 941 (Rev. 3-2021)

What About Penalties and Interest?
Specific Instructions:
Avoiding Penalties and Interest Part 1: Answer These Questions for
You can avoid paying penalties and interest if you do all of
the following. This Quarter
• Deposit or pay your taxes when they are due, unless you
meet the requirements discussed in Notice 2020-22 or 1. Number of Employees Who Received Wages,
IRS.gov/ETD, or you have chosen to use the relief provided Tips, or Other Compensation
in Notice 2020-65 and Notice 2021-11. Enter the number of employees on your payroll for the pay
• File your fully completed Form 941 on time. period including March 12, June 12, September 12, or
• Report your tax liability accurately. December 12, for the quarter indicated at the top of Form
• Submit valid checks for tax payments. 941. Don't include:
• Furnish accurate Forms W-2 to employees. • Household employees,
• File Form W-3 and Copy A of Forms W-2 with the SSA on • Employees in nonpay status for the pay period,
time and accurately.
• Farm employees,
Penalties and interest are charged on taxes paid late and • Pensioners, or
returns filed late at a rate set by law. See sections 11 and 12 • Active members of the Armed Forces.
of Pub. 15 for details. For purposes of these instructions, all references to
Use Form 843 to request abatement of assessed TIP “sick pay” mean ordinary sick pay, not “qualified sick
penalties or interest. Don't request abatement of assessed leave wages” that are reported on line 5a(i).
penalties or interest on Form 941 or Form 941-X.
If you receive a notice about a penalty after you file this
2. Wages, Tips, and Other Compensation
return, reply to the notice with an explanation and we will Enter amounts on line 2 that would also be included in box 1
determine if you meet reasonable-cause criteria. Don't attach of your employees' Forms W-2. See Box 1—Wages, tips,
an explanation when you file your return. other compensation in the General Instructions for Forms
W-2 and W-3 for details. Include sick pay paid by your agent.
If federal income, social security, and Medicare taxes Also include sick pay paid by a third party that isn't your
! that must be withheld (that is, trust fund taxes) aren't agent (for example, an insurance company) if you were given
CAUTION withheld or aren't deposited or paid to the United
timely notice of the payments and the third party transferred
States Treasury, the trust fund recovery penalty may apply. liability for the employer's taxes to you.
The penalty is 100% of the unpaid trust fund tax. If these
unpaid taxes can't be immediately collected from the If you’re a third-party payer of sick pay and not an agent of
employer or business, the trust fund recovery penalty may be the employer, don't include sick pay that you paid to
imposed on all persons who are determined by the IRS to be policyholders' employees here if you gave the policyholders
responsible for collecting, accounting for, or paying over timely notice of the payments. See section 6 of Pub. 15-A for
these taxes, and who acted willfully in not doing so. For more more information about sick pay reporting and the
information, see section 11 of Pub. 15. The trust fund procedures for transferring the liability to the employer.
recovery penalty won't apply to any amount of trust fund
taxes an employer holds back in anticipation of any credits 3. Federal Income Tax Withheld From Wages,
they are entitled to. It also won't apply to applicable taxes Tips, and Other Compensation
deferred under Notice 2020-65 and Notice 2021-11 before Enter the federal income tax you withheld (or were required
January 1, 2022. to withhold) from your employees on this quarter's wages,
including qualified sick leave wages, qualified family leave
Adjustment of Tax on Tips wages, and qualified wages (excluding qualified health plan
expenses) for the employee retention credit; tips; taxable
If, by the 10th of the month after the month you received an fringe benefits; and supplemental unemployment
employee's report on tips, you don't have enough employee compensation benefits. Don't include any income tax
funds available to withhold the employee share of social withheld by a third-party payer of sick pay even if you
security and Medicare taxes, you no longer have to collect it. reported it on Forms W-2. You will reconcile this difference
Report the entire amount of these tips on line 5b (Taxable on Form W-3. Also include here any excise taxes you were
social security tips), line 5c (Taxable Medicare wages and required to withhold on golden parachute payments (section
tips), and, if the withholding threshold is met, line 5d (Taxable 4999). For information on the employment tax treatment of
wages and tips subject to Additional Medicare Tax fringe benefits, see Pub. 15-B, Employer's Tax Guide to
withholding). Include as a negative adjustment on line 9 the Fringe Benefits. For information about supplemental
total uncollected employee share of the social security and unemployment compensation benefits and golden parachute
Medicare taxes. payments, see section 5 of Pub. 15-A.
If you’re a third-party payer of sick pay, enter the federal
income tax you withheld (or were required to withhold) on
third-party sick pay here.

Instructions for Form 941 (Rev. 3-2021) -9-

4. If No Wages, Tips, and Other Compensation sick leave wages, including the portion above the social
Are Subject to Social Security or Medicare security wage base.
Tax . . . For purposes of the credit for qualified sick and family
leave wages, qualified sick leave wages are wages for social
If no wages, tips, and other compensation on line 2 are
security and Medicare tax purposes, determined without
subject to social security or Medicare tax, check the box on
regard to the exclusions from the definition of employment
line 4. If this question doesn't apply to you, leave the box
under section 3121(b), that an employer pays that otherwise
blank. For more information about exempt wages, see
meet the requirements of the Emergency Paid Sick Leave
section 15 of Pub. 15. For religious exemptions, see section
Act (EPSLA), as enacted under the FFCRA and amended by
4 of Pub. 15-A.
the COVID-related Tax Relief Act of 2020. However, don't
If you’re a government employer, wages you pay include any wages otherwise excluded under section
! aren't automatically exempt from social security and 3121(b) when reporting qualified sick leave wages on lines
CAUTION Medicare taxes. Your employees may be covered by 5a(i), 5c, and, if applicable, 5d. See the instructions for
law or by a voluntary Section 218 Agreement with the SSA. line 11b for information about the credit for qualified sick and
For more information, see Pub. 963, Federal-State family leave wages.
Reference Guide.
line 5a(i) (column 1)
x    0.062
5a–5e. Taxable Social Security and Medicare
line 5a(i) (column 2)
Wages and Tips
5a. Taxable social security wages. Enter the total wages,
including qualified wages (other than qualified health plan
expenses) for the employee retention credit; sick pay; and EPSLA. For 2021, certain employers with fewer than 500
taxable fringe benefits subject to social security taxes you employees are entitled to credits under the FFCRA, as
paid to your employees during the quarter. Don't include the amended by the COVID-related Tax Relief Act of 2020, if
qualified sick leave wages reported on line 5a(i) or qualified they provide paid sick leave to employees that otherwise
family leave wages reported on line 5a(ii). For this purpose, meets the requirements of the EPSLA. Under the EPSLA,
sick pay includes payments made by an insurance company wages are qualified sick leave wages if paid to employees
to your employees for which you received timely notice from that are unable to work or telework after March 31, 2020, and
the insurance company. See section 6 of Pub. 15-A for more before April 1, 2021, because the employee:
information about sick pay reporting. See the instructions for 1. Is subject to a federal, state, or local quarantine or
line 8 for an adjustment that you may need to make on Form isolation order related to COVID-19;
941 for sick pay. 2. Has been advised by a health care provider to
Enter the amount before payroll deductions. Don't include self-quarantine due to concerns related to COVID-19;
tips on this line. For information on types of wages subject to 3. Is experiencing symptoms of COVID-19 and seeking a
social security taxes, see section 5 of Pub. 15. medical diagnosis;
For 2021, the rate of social security tax on taxable wages, 4. Is caring for an individual subject to an order described
except for qualified sick leave wages and qualified family in (1) or who has been advised as described in (2);
leave wages, is 6.2% (0.062) each for the employer and
5. Is caring for a son or daughter because the school or
employee or 12.4% (0.124) for both. Stop paying social
place of care for that child has been closed, or the childcare
security tax on and entering an employee's wages on line 5a
provider for that child is unavailable, due to COVID-19
when the employee's taxable wages, including qualified sick
precautions; or
leave wages, qualified family leave wages, and tips, reach
$142,800 for the year. However, continue to withhold income 6. Is experiencing any other substantially similar
and Medicare taxes for the whole year on all wages, condition specified by the U.S. Department of Health and
including qualified sick leave wages, qualified family leave Human Services.
wages, and tips, even when the social security wage base of Son or daughter. A son or daughter must generally have
$142,800 has been reached. been under 18 years of age or incapable of self-care
because of a mental or physical disability. A son or daughter
line 5a (column 1)
includes a biological child, adopted child, stepchild, foster
x    0.124
child, legal ward, or a child for whom the employee assumes
line 5a (column 2) parental status and carries out the obligations of a parent.
For more information about who is a son or daughter under
the FFCRA, see DOL.gov/agencies/whd/pandemic.
5a(i). Qualified sick leave wages. Enter the qualified
taxable sick leave wages you paid to your employees during Government employers aren't eligible for the credit
the quarter. Qualified sick leave wages aren't subject to the TIP for qualified sick and family leave wages; however,
employer share of social security tax; therefore, the tax rate as with any employer, government employers aren't
on these wages is 6.2% (0.062). Stop paying social security liable for the employer share of the social security tax on the
tax on and entering an employee's wages on line 5a(i) when qualified sick leave wages paid to employees.
the employee's taxable wages, including wages reported on Limits on qualified sick leave wages. The EPSLA
line 5a, qualified sick leave wages, qualified family leave provides different limitations for different circumstances
wages, and tips, reach $142,800 for the year. See the under which qualified sick leave wages are paid. For paid
instructions for line 5c for reporting Medicare tax on qualified sick leave qualifying under (1), (2), or (3) above, the amount
of qualified sick leave wages is determined at the employee's

-10- Instructions for Form 941 (Rev. 3-2021)

regular rate of pay, but the wages may not exceed $511 for The first 10 days for which an employee takes leave may
any day (or portion of a day) for which the individual is paid be unpaid. During this period, employees may use other
sick leave. For paid sick leave qualifying under (4), (5), or (6), forms of paid leave, such as qualified sick leave, accrued
earlier, the amount of qualified sick leave wages is sick leave, annual leave, or other paid time off. After an
determined at two-thirds the employee's regular rate of pay, employee takes leave for 10 days, the employer must
but the wages may not exceed $200 for any day (or portion of provide the employee paid leave (that is, qualified family
a day) for which the individual is paid sick leave. The EPSLA leave wages) for up to 10 weeks. For more information from
also limits each individual to a maximum of up to 80 hours of the Department of Labor on these requirements, possible
paid sick leave. Therefore, the maximum amount of paid sick exceptions, and the limitations discussed below, see
leave wages paid to one employee can’t exceed $5,110 for DOL.gov/agencies/whd/pandemic.
an employee for leave under (1), (2), or (3), and it can’t
Government employers aren't eligible for the credit
exceed $2,000 for an employee for leave under (4), (5), or
(6). For more information from the Department of Labor on
TIP for qualified sick and family leave wages; however,
as with any employer, government employers aren't
these requirements and limits, see DOL.gov/agencies/whd/
liable for the employer share of the social security tax on the
pandemic.
qualified family leave wages paid to employees.
For more information about qualified sick leave wages, go
to IRS.gov/PLC. Rate of pay and limit on wages. The rate of pay must
be at least two-thirds of the employee’s regular rate of pay
5a(ii). Qualified family leave wages. Enter the qualified (as determined under the Fair Labor Standards Act of 1938),
taxable family leave wages you paid to your employees multiplied by the number of hours the employee otherwise
during the quarter. Qualified family leave wages aren't would have been scheduled to work. The qualified family
subject to the employer share of social security tax; leave wages can’t exceed $200 per day or $10,000 in the
therefore, the tax rate on these wages is 6.2% (0.062). Stop aggregate per employee.
paying social security tax on and entering an employee's
For more information about qualified family leave wages,
wages on line 5a(ii) when the employee's taxable wages,
go to IRS.gov/PLC.
including wages reported on line 5a, qualified sick leave
wages, qualified family leave wages, and tips, reach 5b. Taxable social security tips. Enter all tips your
$142,800 for the year. See the instructions for line 5c for employees reported to you during the quarter until the total of
reporting Medicare tax on qualified family leave wages, the tips and taxable wages, including qualified sick leave
including the portion above the social security wage base. wages and qualified family leave wages, for an employee
For purposes of the credit for qualified sick and family reach $142,800 for the year. Include all tips your employee
leave wages, qualified family leave wages are wages for reported to you even if you were unable to withhold the
social security and Medicare tax purposes, determined employee tax of 6.2%. You will reduce your total taxes by the
without regard to the exclusions from the definition of amount of any uncollected employee share of social security
employment under section 3121(b), that an employer pays and Medicare taxes on tips later on line 9; see Current
that otherwise meet the requirements of the Emergency quarter's adjustments for tips and group-term life insurance,
Family and Medical Leave Expansion Act (Expanded FMLA), later. Don’t include service charges on line 5b. For details
as enacted under the FFCRA and amended by the about the difference between tips and service charges, see
COVID-related Tax Relief Act of 2020. However, don't Rev. Rul. 2012-18, 2012-26 I.R.B. 1032, available at
include any wages otherwise excluded under section IRS.gov/irb/2012-26_IRB#RR-2012-18.
3121(b) when reporting qualified family leave wages on lines Your employee must report cash tips to you by the 10th
5a(ii), 5c, and, if applicable, 5d. See the instructions for day of the month after the month the tips are received. Cash
line 11b for information about the credit for qualified sick and tips include tips paid by cash, check, debit card, and credit
family leave wages. card. The report should include charged tips (for example,
credit and debit card charges) you paid over to the employee
line 5a(ii) (column 1) for charge customers, tips the employee received directly
x    0.062 from customers, and tips received from other employees
line 5a(ii) (column 2) under any tip-sharing arrangement. Both directly and
indirectly tipped employees must report tips to you. No report
is required for months when tips are less than $20.
Employees may use Form 4070 (available only in Pub.
Expanded FMLA. For 2021, certain employers with fewer 1244), or submit a written statement or electronic tip record.
than 500 employees are entitled to credits under the FFCRA,
Don't include allocated tips (described in section 6 of Pub.
as amended by the COVID-related Tax Relief Act of 2020, if
15) on this line. Instead, report them on Form 8027. Allocated
they provide paid family leave to employees that otherwise
tips aren't reportable on Form 941 and aren't subject to
meets the requirements of the Expanded FMLA. Under the
withholding of federal income, social security, or Medicare
Expanded FMLA, wages are qualified family leave wages if
taxes.
paid to an employee who has been employed for at least 30
calendar days when an employee is unable to work or line 5b (column 1)
telework due to the need to care for a son or daughter under x     0.124
18 years of age or incapable of self-care because of a mental
line 5b (column 2)
or physical disability because the school or place of care for
that child has been closed, or the childcare provider for that
child is unavailable, due to a public health emergency. See
Son or daughter, earlier, for more information. 5c. Taxable Medicare wages & tips. Enter all wages,
including qualified sick leave wages, qualified family leave
wages, and qualified wages (excluding qualified health plan

Instructions for Form 941 (Rev. 3-2021) -11-

expenses) for the employee retention credit; tips; sick pay; other tips that weren't reported to their employer as
and taxable fringe benefits that are subject to Medicare tax. determined by the IRS during an examination. For additional
Unlike social security wages, there is no limit on the amount information, see Rev. Rul. 2012-18, 2012-26 I.R.B. 1032,
of wages subject to Medicare tax. available at IRS.gov/irb/2012-26_IRB#RR-2012-18.
The rate of Medicare tax is 1.45% (0.0145) each for the Deposit the tax within the time period required under your
employer and employee or 2.9% (0.029) for both. Include all deposit schedule to avoid any possible deposit penalty. The
tips your employees reported during the quarter, even if you tax is treated as accumulated by the employer on the “Date
were unable to withhold the employee tax of 1.45%. of Notice and Demand” as printed on the Section 3121(q)
Notice and Demand. The employer must include this amount
line 5c (column 1)
on the appropriate line of the record of federal tax liability
x     0.029
(Part 2 of Form 941 for a monthly schedule depositor or
line 5c (column 2) Schedule B (Form 941) for a semiweekly schedule
depositor).
For more information on tips, see section 6 of Pub. 15. 6. Total Taxes Before Adjustments
See the instructions for line 8 for an adjustment that you may Add the total federal income tax withheld from wages, tips,
need to make on Form 941 for sick pay. and other compensation (line 3); the total social security and
5d. Taxable wages & tips subject to Additional Medicare Medicare taxes before adjustments (line 5e); and any tax due
Tax withholding. Enter all wages, including qualified sick under a Section 3121(q) Notice and Demand (line 5f). Enter
leave wages, qualified family leave wages, and qualified the result on line 6.
wages (excluding qualified health plan expenses) for the
employee retention credit; tips; sick pay; and taxable fringe 7–9. Tax Adjustments
benefits that are subject to Additional Medicare Tax Enter tax amounts on lines 7–9 that result from current
withholding. You’re required to begin withholding Additional quarter adjustments. Use a minus sign (if possible) to show
Medicare Tax in the pay period in which you pay wages in an adjustment that decreases the total taxes shown on line 6
excess of $200,000 to an employee and continue to withhold instead of parentheses. Doing so enhances the accuracy of
it each pay period until the end of the calendar year. our scanning software. For example, enter “-10.59” instead of
Additional Medicare Tax is only imposed on the employee. “(10.59).” However, if your software only allows for
There is no employer share of Additional Medicare Tax. All parentheses in entering negative amounts, you may use
wages that are subject to Medicare tax are subject to them.
Additional Medicare Tax withholding if paid in excess of the
$200,000 withholding threshold. Current quarter's adjustments. In certain cases, you must
adjust the amounts you entered as social security and
For more information on what wages are subject to Medicare taxes in column 2 of lines 5a–5d to figure your
Medicare tax, see the chart, Special Rules for Various Types correct tax liability for this quarter's Form 941. See section 13
of Services and Payments, in section 15 of Pub. 15. For more of Pub. 15.
information on Additional Medicare Tax, go to IRS.gov/ 7. Current quarter's adjustment for fractions of cents.
ADMT. See the instructions for line 8 for an adjustment that Enter adjustments for fractions of cents (due to rounding)
you may need to make on Form 941 for sick pay. relating to the employee share of social security and
Once wages and tips exceed the $200,000 withholding Medicare taxes withheld. The employee share of amounts
threshold, include all tips your employees reported during the shown in column 2 of lines 5a–5d may differ slightly from
quarter, even if you were unable to withhold the employee tax amounts actually withheld from employees' pay due to the
of 0.9%. rounding of social security and Medicare taxes based on
statutory rates. This adjustment may be a positive or a
line 5d (column 1) negative adjustment.
x     0.009 8. Current quarter's adjustment for sick pay. If your
line 5d (column 2) third-party payer of sick pay that isn't your agent (for
example, an insurance company) transfers the liability for the
employer share of the social security and Medicare taxes to
5e. Total social security and Medicare taxes. Add the you, enter a negative adjustment on line 8 for the employee
column 2 amounts on lines 5a–5d. Enter the result on line 5e. share of social security and Medicare taxes that were
withheld and deposited by your third-party sick pay payer on
5f. Section 3121(q) Notice and Demand—Tax the sick pay. If you’re the third-party sick pay payer and you
Due on Unreported Tips transferred the liability for the employer share of the social
Enter the tax due from your Section 3121(q) Notice and security and Medicare taxes to the employer, enter a
Demand on line 5f. The IRS issues a Section 3121(q) Notice negative adjustment on line 8 for any employer share of
and Demand to advise an employer of the amount of tips these taxes required to be paid by the employer. The sick
received by employees who failed to report or underreported pay should be included on line 5a, line 5c, and, if the
tips to the employer. An employer isn't liable for the employer withholding threshold is met, line 5d.
share of the social security and Medicare taxes on No adjustment is reported on line 8 for sick pay that is paid
unreported tips until notice and demand for the taxes is made through a third party as an employer’s agent. An employer’s
to the employer by the IRS in a Section 3121(q) Notice and agent bears no insurance risk and is reimbursed on a
Demand. The tax due may have been determined from tips cost-plus-fee basis for payment of sick pay and similar
reported to the IRS on employees' Forms 4137, Social amounts. If an employer uses an agent to pay sick pay, the
Security and Medicare Tax on Unreported Tip Income, or employer reports the wages on line 5a, line 5c, and, if the
withholding threshold is met, line 5d, unless the employer

-12- Instructions for Form 941 (Rev. 3-2021)

has an agency agreement with the third-party payer that those wages. The nonrefundable portion of the credit is
requires the third-party payer to do the collecting, reporting, limited to the employer share of social security tax reported
and/or paying or depositing employment taxes on the sick on Form 941, lines 5a and 5b, after that share is first reduced
pay. See section 6 of Pub. 15-A for more information about by any credit claimed on Form 8974 for the qualified small
sick pay reporting. business payroll tax credit for increasing research activities,
9. Current quarter's adjustments for tips and any credit to be claimed on Form 5884-C for the work
group-term life insurance. Enter a negative adjustment opportunity credit for qualified tax-exempt organizations
for: hiring qualified veterans, and/or any credit to be claimed on
• Any uncollected employee share of social security and Form 5884-D for the disaster credit for qualified tax-exempt
Medicare taxes on tips, and organizations.
• The uncollected employee share of social security and If you're a third-party payer of sick pay that isn't an
Medicare taxes on group-term life insurance premiums paid agent (for example, an insurance company) and
for former employees. !
CAUTION you're claiming the credit for qualified sick and family

See the General Instructions for Forms W-2 and W-3 for leave wages for amounts paid to your own employees, the
information on how to report the uncollected employee share amount of the employer share of social security tax reported
of social security and Medicare taxes on tips and group-term on line 5a must be reduced by any adjustment you make on
life insurance on Form W-2. line 8 for the employer share of social security tax transferred
Prior quarter's adjustments. If you need to correct any to your client. If you received a Section 3121(q) Notice and
adjustment reported on a previously filed Form 941, Demand for tax due on unreported tips (Letter 3263 or Letter
complete and file Form 941-X. Form 941-X is an adjusted 4520) during the quarter, you report the amount for the
return or claim for refund and is filed separately from Form employer share of social security tax and Medicare tax on
941. See section 13 of Pub. 15. Form 941, line 5f. Letter 3263 or Letter 4520 includes an
attachment that shows the employer share of social security
10. Total Taxes After Adjustments tax. This amount of the employer share of social security tax
can also be reduced by the nonrefundable portion of the
Combine the amounts shown on lines 6–9 and enter the
credit. See Worksheet 1 to figure your credit.
result on line 10.

11a. Qualified Small Business Payroll Tax Credit Any credit in excess of the remaining amount of the
employer share of social security tax is refundable and
for Increasing Research Activities reported on Form 941, line 13c. For more information on the
Enter the amount of the credit from Form 8974, line 12. credit for qualified sick and family leave wages, go to
If you enter an amount on line 11a, you must attach IRS.gov/PLC.
! Form 8974. The December 2017 revision of Form Qualified health plan expenses allocable to qualified
CAUTION 8974 instructs you to enter the amount from Form sick leave and family leave wages. The credit for qualified
8974, line 12, on Form 941, line 11. Instead, the amount from sick leave wages and qualified family leave wages is
Form 8974, line 12, should be entered on Form 941, line 11a. increased to cover the qualified health plan expenses that
are properly allocable to the qualified leave wages for which
11b. Nonrefundable Portion of Credit for the credit is allowed. These qualified health plan expenses
Qualified Sick and Family Leave Wages From are amounts paid or incurred by the employer to provide and
maintain a group health plan but only to the extent such
Worksheet 1 amounts are excluded from the employees’ income as
Form 941 and these instructions use the terms coverage under an accident or health plan. The amount of
TIP “nonrefundable” and “refundable” when discussing qualified health plan expenses generally includes both the
credits. The term “nonrefundable” means the portion portion of the cost paid by the employer and the portion of the
of the credit which is limited by law to the amount of the cost paid by the employee with pre-tax salary reduction
employer share of social security tax. The term “refundable” contributions. However, qualified health plan expenses don’t
means the portion of the credit which is in excess of the include amounts that the employee paid for with after-tax
employer share of social security tax. contributions. For more information, go to IRS.gov/PLC.
Businesses and tax-exempt organizations with fewer than You must include the full amount (both the
500 employees that provide paid sick leave under the EPSLA TIP nonrefundable and refundable portions) of the credit
and/or provide paid family leave under the Expanded FMLA for qualified sick and family leave wages in your
are eligible to claim the credit for qualified sick and family gross income for the tax year that includes the last day of any
leave wages for the period after March 31, 2020, and before calendar quarter in which a credit is allowed. You can't use
April 1, 2021. For purposes of this credit, qualified sick leave the same wages for the employee retention credit and the
wages and qualified family leave wages are wages for social credits for paid sick and family leave.
security and Medicare tax purposes, determined without
regard to the exclusions from the definition of employment
under section 3121(b), that an employer pays that otherwise
meet the requirements of the EPSLA or Expanded FMLA.
Enter the nonrefundable portion of the credit for qualified sick
and family leave wages from Worksheet 1, Step 2, line 2j.
The credit for qualified sick and family leave wages consists
of the qualified sick leave wages, the qualified family leave
wages, the qualified health plan expenses allocable to those
wages, and the employer share of Medicare tax allocable to

Instructions for Form 941 (Rev. 3-2021) -13-

11c. Nonrefundable Portion of Employee paid to all their employees and the qualified health plan
Retention Credit From Worksheet 1 expenses paid or incurred for all employees during any
period in the quarter in which business operations are fully or
Certain government entities are entitled to the credit partially suspended due to a government order or during a
TIP for calendar quarters in 2021, including (1) federal quarter in which gross receipts are less than 80% of the
instrumentalities described in section 501(c)(1) and gross receipts for the same calendar quarter in calendar year
exempt from tax under section 501(a), and (2) any 2019. Eligible employers that had an average number of
government, agency, or instrumentality that is a college or more than 500 full-time employees in 2019 may count only
university or the principal purpose or function of the entity is wages paid to employees for time that the employees weren't
providing medical or hospital care. providing services, and qualified health plan expenses paid
Enter the nonrefundable portion of the employee retention or incurred by the employer allocable to the time those
credit from Worksheet 1, Step 3, line 3h. The employee employees weren't providing services, due to the suspension
retention credit is 70% of the qualified wages you paid to your or decline in gross receipts.
employees in the quarter. Qualified wages include qualified Qualified wages don't include wages for which the
health plan expenses for the employee retention credit. The employer receives a credit for sick or family leave under the
nonrefundable portion of the credit is limited to the employer FFCRA. Employers can receive both a Small Business
share of social security tax reported on Form 941, lines 5a Interruption Loan under the Paycheck Protection Program
and 5b, after that share is first reduced by any credit claimed (PPP) and the employee retention credit; however,
on Form 8974 for the qualified small business payroll tax employers can't receive both loan forgiveness and a credit
credit for increasing research activities, any credit to be for the same wages. Any wages taken into account in
claimed on Form 5884-C for the work opportunity credit for determining the employee retention credit can't be taken into
qualified tax-exempt organizations hiring qualified veterans, account as wages for purposes of the credits under sections
any credit to be claimed on Form 5884-D for the disaster 41, 45A, 45P, 45S, 51, and 1396. For more information about
credit for qualified tax-exempt organizations, and/or any the employee retention credit, including rules for new
credit claimed for the nonrefundable portion of the credit for employers, an optional election to determine the gross
qualified sick and family leave wages. receipts test based on a prior quarter, and rules that allow
certain governmental employers to claim the credit for 2021,
If you're a third-party payer of sick pay that isn't an
go to IRS.gov/ERC.
! agent (for example, an insurance company) and
CAUTION you're claiming the employee retention credit for
Qualified health plan expenses for the employee
amounts paid to your own employees, the amount of the retention credit. Qualified wages for the employee
employer share of social security tax reported on line 5a must retention credit include qualified health plan expenses.
be reduced by any adjustment you make on line 8 for the Qualified health plan expenses are amounts paid or incurred
employer share of social security tax transferred to your by the employer to provide and maintain a group health plan
client. If you received a Section 3121(q) Notice and Demand but only to the extent such amounts are excluded from the
for tax due on unreported tips (Letter 3263 or Letter 4520) employees' income as coverage under an accident or health
during the quarter, you report the amount for the employer plan. The amount of qualified health plan expenses taken
share of social security tax and Medicare tax on Form 941, into account in determining the amount of qualified wages
line 5f. Letter 3263 or Letter 4520 includes an attachment generally includes both the portion of the cost paid by the
that shows the employer share of social security tax. This employer and the portion of the cost paid by the employee
amount of the employer share of social security tax can also with pre-tax salary reduction contributions. However, the
be reduced by the nonrefundable portion of the credit. See qualified health plan expenses shouldn't include amounts
Worksheet 1 to figure your credit. that the employee paid for with after-tax contributions.
Generally, qualified health plan expenses are those which
are allocable to an employee (and to a period) in which your
Any credit in excess of the remaining amount of the business operations are fully or partially suspended due to a
employer share of social security tax is refundable and government order or experience a decline in gross receipts.
reported on Form 941, line 13d. For more information on the The allocation will be treated as proper if made on the basis
employee retention credit, go to IRS.gov/ERC. of being pro rata among periods of coverage. For more
Qualified wages for the employee retention credit. The information, see the frequently asked questions for qualified
tax credit is equal to 70% of qualified wages paid to health plan expenses at IRS.gov/ERC.
employees after December 31, 2020, and before July 1,
2021. Qualified wages, including qualified health plan 11d. Total Nonrefundable Credits
expenses, are limited to a maximum of $10,000 for each Add lines 11a, 11b, and 11c. Enter the total on line 11d.
employee for the quarter. Qualified wages are wages for
social security and Medicare tax purposes paid to certain 12. Total Taxes After Adjustments and
employees during any period in a quarter in which your Nonrefundable Credits
business operations are fully or partially suspended due to a Subtract line 11d from line 10 and enter the result on line 12.
government order or during a quarter in which your gross
receipts (within the meaning of section 448(c) or, if you're a • If line 12 is less than $2,500 or line 12 on the prior
tax-exempt organization, section 6033) are less than 80% of quarterly return was less than $2,500, and you didn't
the gross receipts for the same calendar quarter in calendar incur a $100,000 next-day deposit obligation during the
year 2019. current quarter. You may pay the amount with Form 941 or
The wages and qualified health plan expenses considered you may deposit the amount. To avoid a penalty, you must
in calculating your credit depend on the size of your pay any amount you owe in full with a timely filed return or
workforce. Eligible employers that had an average number of you must deposit any amount you owe before the due date of
500 or fewer full-time employees during 2019 count wages

-14- Instructions for Form 941 (Rev. 3-2021)

the return. For more information on paying with a timely filed 13f. Total Advances Received From Filing
return, see the instructions for line 14, later. Form(s) 7200 for the Quarter
• If line 12 is $2,500 or more and line 12 on the prior
quarterly return was $2,500 or more, or if you incurred a Enter the total advances received from filing Form(s) 7200 for
$100,000 next-day deposit obligation during the current the quarter. If you filed a Form 7200 for the quarter but you
quarter. You must make required deposits according to your haven't received the advance before filing Form 941, don't
deposit schedule. See Notice 2020-22 for information about include on line 13f the amount of the advance requested.
the reduction of certain deposits. The amount shown on Employers were eligible to file Form 7200 for the quarter if
line 12 must equal the “Total liability for quarter” shown on they paid qualified sick leave wages, qualified family leave
line 16 or the “Total liability for the quarter” shown on wages, and/or qualified wages for the employee retention
Schedule B (Form 941). For more information, see the line 16 credit and the amount of employment tax deposits they
instructions, later. retained wasn’t sufficient to cover the cost of qualified sick
and family leave wages and the employee retention credit.
For more information and rules about federal tax deposits,
Form 7200 may be filed for a quarter up to the earlier
see Depositing Your Taxes, earlier, and section 11 of Pub.
15. TIP of the end of the month after the end of each quarter
or filing of Form 941 for the quarter. However, if you
If you’re a semiweekly schedule depositor, you must file Form 7200 after the end of the quarter, it's possible that it
! complete Schedule B (Form 941). If you fail to may not be processed prior to the processing of the filed
CAUTION complete and submit Schedule B (Form 941), the Form 941. Advance payment requests on Form 7200 for a
IRS may assert deposit penalties based on available quarter won't be paid after your Form 941 is processed for
information. that quarter. When the IRS processes Form 941, we will
correct the amount reported on line 13f to match the amount
13a. Total Deposits for This Quarter of advance payments issued or contact you to reconcile the
difference before we finish processing Form 941.
Enter your deposits for this quarter, including any
overpayment from a prior quarter that you applied to this
return. Also include in the amount shown any overpayment 13g. Total Deposits and Refundable Credits
that you applied from filing Form 941-X, 941-X (PR), 944-X, Less Advances
or 944-X (SP) in the current quarter. Don't include any Subtract line 13f from line 13e. Enter the result on line 13g.
amount that you didn't deposit because you reduced your
deposits in anticipation of the credit for qualified sick and 14. Balance Due
family leave wages and/or the employee retention credit, as If line 12 is more than line 13g, enter the difference on
discussed in Notice 2020-22. line 14. Otherwise, see Overpayment, later.
13c. Refundable Portion of Credit for Qualified Never make an entry on both lines 14 and 15.
Sick and Family Leave Wages From You don't have to pay if line 14 is under $1. Generally, you
Worksheet 1 should have a balance due only if your total taxes after
Businesses and tax-exempt organizations with fewer than adjustments and nonrefundable credits (line 12) for the
500 employees that provide paid sick leave under the EPSLA current quarter or prior quarter are less than $2,500, and you
and/or provide paid family leave under the Expanded FMLA didn't incur a $100,000 next-day deposit obligation during the
are eligible to claim the credit for qualified sick and family current quarter. However, see section 11 of Pub. 15 for
leave wages. Enter the refundable portion of the credit for information about payments made under the accuracy of
qualified sick and family leave wages from Worksheet 1, Step deposits rule.
2, line 2k. The credit for qualified sick and family leave wages If you were required to make federal tax deposits, pay the
consists of the qualified sick leave wages, the qualified family amount shown on line 14 by EFT. If you weren't required to
leave wages, the qualified health plan expenses allocable to make federal tax deposits (see Must You Deposit Your
those wages, and the employer share of Medicare tax Taxes, earlier) or you're a monthly schedule depositor
allocable to those wages. The refundable portion of the credit making a payment under the accuracy of deposits rule, you
is allowed after the employer share of social security tax is may pay the amount shown on line 14 by EFT, credit card,
reduced to zero by nonrefundable credits. debit card, check, money order, or EFW. For more
information on electronic payment options, go to IRS.gov/
13d. Refundable Portion of Employee Retention Payments.
Credit From Worksheet 1
If you pay by EFT, credit card, or debit card, file your
Enter the refundable portion of the employee retention credit return using the Without a payment address under Where
from Worksheet 1, Step 3, line 3i. The employee retention Should You File, earlier, and don't file Form 941-V, Payment
credit is 70% of the qualified wages you paid to your Voucher.
employees in the quarter. The refundable portion of the credit
is allowed after the employer share of social security tax is If you pay by check or money order, make it payable to
reduced to zero by nonrefundable credits. “United States Treasury.” Enter your EIN, “Form 941,” and
the tax period (“1st Quarter 2021,” “2nd Quarter 2021,” “3rd
13e. Total Deposits and Refundable Credits Quarter 2021,” or “4th Quarter 2021”) on your check or
Add lines 13a, 13c, and 13d. Enter the total on line 13e. money order. Complete Form 941-V and enclose with Form
941.
If line 12 is $2,500 or more on both your prior and current
quarter Form 941, and you’ve deposited all taxes when due,
the balance due on line 14 should be zero.

Instructions for Form 941 (Rev. 3-2021) -15-

 If you’re required to make deposits and instead pay Monthly schedule depositor. If you reported $50,000 or
! the taxes with Form 941, you may be subject to a less in taxes during the lookback period, you’re a monthly
CAUTION penalty. See Must You Deposit Your Taxes, earlier. schedule depositor unless the $100,000 Next-Day Deposit
What if you can't pay in full? If you can't pay the full Rule discussed in section 11 of Pub. 15 applies. Check the
amount of tax you owe, you can apply for an installment second box on line 16 and enter your tax liability for each
agreement online. You can apply for an installment month in the quarter. Enter your tax liabilities in the month
agreement online if: that corresponds to the dates you paid wages to your
• You can't pay the full amount shown on line 14, employees, not the date payroll liabilities were accrued or
• The total amount you owe is $25,000 or less, and deposits were made. Add the amounts for each month. Enter
• You can pay the liability in full in 24 months. the result in the “Total liability for quarter” box.
To apply using the Online Payment Agreement Note that your total tax liability for the quarter must equal
Application, go to IRS.gov/OPA. your total taxes shown on line 12. If it doesn't, your tax
deposits and payments may not be counted as timely. Don't
Under an installment agreement, you can pay what you
reduce your total liability reported on line 16 by the
owe in monthly installments. There are certain conditions you
refundable portion of the credit for qualified sick and family
must meet to enter into and maintain an installment
leave wages or the refundable portion of the employee
agreement, such as paying the liability within 24 months, and
retention credit. Don't change your tax liability on line 16 by
making all required deposits and timely filing tax returns
adjustments reported on any Forms 941-X.
during the length of the agreement.
You’re a monthly schedule depositor for the calendar year
If your installment agreement is accepted, you will be
if the amount of your Form 941 taxes reported for the
charged a fee and you will be subject to penalties and
lookback period is $50,000 or less. The lookback period is
interest on the amount of tax not paid by the due date of the
the 4 consecutive quarters ending on June 30 of the prior
return.
year. For 2021, the lookback period begins July 1, 2019, and
15. Overpayment ends June 30, 2020. For details on the deposit rules, see
section 11 of Pub. 15. If you filed Form 944 in either 2019 or
If line 13g is more than line 12, enter the difference on 2020, your lookback period is the 2019 calendar year.
line 15.
The amounts entered on line 16 are a summary of
Never make an entry on both lines 14 and 15. ! your monthly tax liability, not a summary of deposits
CAUTION you made. If you don't properly report your liabilities

If you deposited more than the correct amount for the when required or if you’re a semiweekly schedule depositor
quarter, you can choose to have the IRS either refund the and enter your liabilities on line 16 instead of on Schedule B
overpayment or apply it to your next return. Check only one (Form 941), you may be assessed an “averaged” FTD
box on line 15. If you don't check either box or if you check penalty. See Deposit Penalties in section 11 of Pub. 15 for
both boxes, we will generally apply the overpayment to your more information.
next return. Regardless of any boxes you check or don't
check on line 15, we may apply your overpayment to any Reporting adjustments from lines 7–9 on line 16. If
past due tax account that is shown in our records under your your net adjustment during a month is negative and it
EIN. exceeds your total tax liability for the month, don't enter a
negative amount for the month. Instead, enter "-0-" for the
If line 15 is under $1, we will send a refund or apply it to month and carry over the unused portion of the adjustment to
your next return only if you ask us in writing to do so. the next month.
Semiweekly schedule depositor. If you reported more
Part 2: Tell Us About Your Deposit than $50,000 of taxes for the lookback period, you’re a
Schedule and Tax Liability for This semiweekly schedule depositor. Check the third box on
line 16.
Quarter You must complete Schedule B (Form 941) and submit it
with your Form 941. Don't file Schedule B (Form 941) with
16. Tax Liability for the Quarter your Form 941 if you’re a monthly schedule depositor.
Check one of the boxes on line 16. Follow the instructions for
Don't change your tax liability on Schedule B (Form 941)
each box to determine if you need to enter your monthly tax
by adjustments reported on any Forms 941-X.
liability on Form 941 or your daily tax liability on Schedule B
(Form 941). Adjusting tax liability for nonrefundable credits claimed
on lines 11a, 11b, and 11c. Monthly schedule depositors
De minimis exception. If line 12 is less than $2,500 or
and semiweekly schedule depositors must account for
line 12 on the prior quarterly return was less than $2,500, and
nonrefundable credits claimed on lines 11a, 11b, and 11c
you didn't incur a $100,000 next-day deposit obligation
when reporting their tax liabilities on line 16 or Schedule B
during the current quarter, check the first box on line 16 and
(Form 941). The total tax liability for the quarter must equal
go to Part 3.
the amount reported on line 12. Failure to account for the
If you meet the de minimis exception based on the nonrefundable credits on line 16 or Schedule B (Form 941)
! prior quarter and line 12 for the current quarter is may cause line 16 or Schedule B (Form 941) to report more
CAUTION $100,000 or more, you must provide a record of your than the total tax liability reported on line 12. Don't reduce
federal tax liability. If you’re a monthly schedule depositor, your monthly tax liability reported on line 16 or your daily tax
complete the deposit schedule on line 16. If you’re a liability reported on Schedule B (Form 941) below zero.
semiweekly schedule depositor, attach Schedule B (Form Qualified small business payroll tax credit for
941). increasing research activities (line 11a). The qualified

-16- Instructions for Form 941 (Rev. 3-2021)

small business payroll tax credit for increasing research line 16 or Schedule B (Form 941), you take into account the
activities is limited to the employer share of social security tax entire quarter's nonrefundable portion of the credit for sick
on wages paid in the quarter that begins after the income tax and family leave wages (including the qualified health plan
return electing the credit has been filed. In completing line 16 expenses and employer share of Medicare tax allocable to
or Schedule B (Form 941), you take into account the payroll those wages) against the liability for the first payroll payment
tax credit against the liability for the employer share of social of the quarter, but not below zero. Then reduce the liability for
security tax starting with the first payroll payment of the each successive payroll payment in the quarter until the
quarter that includes payments of wages subject to social nonrefundable portion of the credit is used. Any credit for
security tax to your employees. The credit may be taken to qualified sick and family leave wages that is remaining at the
the extent of the employer share of social security tax on end of the quarter because it exceeds the employer share of
wages associated with the first payroll payment, and then to social security tax for the quarter is claimed on line 13c as a
the extent of the employer share of social security tax refundable credit. The refundable portion of the credit doesn’t
associated with succeeding payroll payments in the quarter reduce the liability reported on line 16 or Schedule B (Form
until the credit is used. Consistent with the entries on line 16 941).
or Schedule B (Form 941), the payroll tax credit should be Example. Maple Co. is a semiweekly schedule depositor
taken into account in making deposits of employment tax. If that pays employees every other Friday. In the first quarter of
any payroll tax credit is remaining at the end of the quarter 2021, Maple Co. had pay dates of January 8, January 22,
that hasn’t been used completely because it exceeds the February 5, February 19, March 5, and March 19. Maple Co.
employer share of social security tax for the quarter, the paid qualified sick and family leave wages on February 5 and
excess credit may be carried forward to the succeeding February 19. The nonrefundable portion of the credit for
quarter and allowed as a payroll tax credit for the succeeding qualified sick and family leave wages for the quarter is
quarter. The payroll tax credit may not be taken as a credit $10,000. On Schedule B (Form 941), Maple Co. will use the
against income tax withholding, Medicare tax, or the $10,000 to reduce the liability for the January 8 pay date, but
employee share of social security tax. Also, the remaining not below zero. If any nonrefundable portion of the credit
payroll tax credit may not be carried back and taken as a remains, Maple Co. applies it to the liability for the January
credit against wages paid from preceding quarters. 22 pay date, then the February 5 pay date, and so forth until
Example. Rose Co. is an employer with a calendar tax the entire $10,000 is used.
year that filed its timely income tax return on April 15, 2021. Nonrefundable portion of employee retention credit
Rose Co. elected to take the qualified small business payroll (line 11c). The nonrefundable portion of the employee
tax credit for increasing research activities on Form 6765. retention credit is limited to the employer share of social
The third quarter of 2021 is the first quarter that begins after security tax on wages paid in the quarter that is remaining
Rose Co. filed the income tax return making the payroll tax after that share is first reduced by any credit claimed on Form
credit election. Therefore, the payroll tax credit applies 941, line 11a, for the qualified small business payroll tax
against Rose Co.'s share of social security tax on wages paid credit for increasing research activities; any credit to be
to employees in the third quarter of 2021. Rose Co. is a claimed on Form 5884-C, line 11, for the work opportunity
semiweekly schedule depositor. Rose Co. completes credit for qualified tax-exempt organizations hiring qualified
Schedule B (Form 941) by reducing the amount of liability veterans; any credit to be claimed on Form 5884-D for the
entered for the first payroll payment in the third quarter of disaster credit for qualified tax-exempt organizations; and/or
2021 that includes wages subject to social security tax by the any credit claimed on Form 941, line 11b, for the
lesser of (1) its share of social security tax on the wages, or nonrefundable portion of the credit for qualified sick and
(2) the available payroll tax credit. If the payroll tax credit family leave wages. In completing line 16 or Schedule B
elected is more than Rose Co.'s share of social security tax (Form 941), you take into account the entire quarter's
on the first payroll payment of the quarter, the excess payroll nonrefundable portion of the employee retention credit
tax credit would be carried forward to succeeding payroll against the liability for the first payroll payment of the quarter,
payments in the third quarter until it is used. If the amount of but not below zero. Then reduce the liability for each
the payroll tax credit exceeds Rose Co.'s share of social successive payroll payment in the quarter until the
security tax on wages paid to its employees in the third nonrefundable portion of the credit is used. Any employee
quarter, the excess credit would be treated as a payroll tax retention credit that is remaining at the end of the quarter
credit against its share of social security tax on wages paid in because it exceeds the employer share of social security tax
the fourth quarter. If the amount of the payroll tax credit for the quarter is claimed on line 13d as a refundable credit.
remaining exceeded Rose Co.'s share of social security tax The refundable portion of the credit doesn’t reduce the
on wages paid in the fourth quarter, it could be carried liability reported on line 16 or Schedule B (Form 941).
forward and treated as a payroll tax credit for the first quarter
Example. Maple Co. is a semiweekly schedule depositor
of 2022.
that pays employees every other Friday. In the first quarter of
Nonrefundable portion of credit for qualified sick and 2021, Maple Co. had pay dates of January 8, January 22,
family leave wages (line 11b). The nonrefundable portion February 5, February 19, March 5, and March 19. Maple Co.
of the credit for qualified sick and family leave wages is paid qualified wages for the employee retention credit on
limited to the employer share of social security tax on wages February 5 and February 19. The nonrefundable portion of
paid in the quarter that is remaining after that share is first the employee retention credit for the quarter is $10,000. On
reduced by any credit claimed on Form 941, line 11a, for the Schedule B (Form 941), Maple Co. will use the $10,000 to
qualified small business payroll tax credit for increasing reduce the liability for the January 8 pay date, but not below
research activities; any credit to be claimed on Form 5884-C, zero. If any nonrefundable portion of the credit remains,
line 11, for the work opportunity credit for qualified Maple Co. applies it to the liability for the January 22 pay
tax-exempt organizations hiring qualified veterans; and/or date, then the February 5 pay date, and so forth until the
any credit to be claimed on Form 5884-D for the disaster entire $10,000 is used.
credit for qualified tax-exempt organizations. In completing

Instructions for Form 941 (Rev. 3-2021) -17-

 You may reduce your deposits by the amount of the 22. Qualified Health Plan Expenses Allocable to
TIP nonrefundable and refundable portions of the credit Wages Reported on Line 21
for qualified sick and family leave wages, and the
nonrefundable and refundable portions of the employee Enter the qualified health plan expenses for the employee
retention credit, as discussed earlier under Reducing your retention credit. These expenses are generally those which
deposits for COVID-19 credits. are allocable to an employee (and to a period) in which your
business operations are fully or partially suspended due to a
government order or experience a decline in gross receipts.
Part 3: Tell Us About Your Business The allocation will be treated as proper if made on the basis
In Part 3, answer only those questions that apply to your of being pro rata among periods of coverage. For more
business. If the questions don't apply, leave them blank and information, go to IRS.gov/ERC. The amount from line 22 is
go to Part 4. also entered on Worksheet 1, Step 3, line 3b.

17. If Your Business Has Closed . . . 23. Credit From Form 5884-C, Line 11, for This
If you go out of business or stop paying wages, you must file Quarter
a final return. To tell the IRS that a particular Form 941 is your If applicable, enter the credit to be claimed on line 11 of Form
final return, check the box on line 17 and enter the final date 5884-C for the work opportunity credit for qualified
you paid wages in the space provided. For additional filing tax-exempt organizations hiring qualified veterans for this
requirements, including information about attaching a quarter. Entering an amount here doesn’t change your
statement to your final return, see If Your Business Has requirement to file Form 5884-C separately from Form 941.
Closed, earlier. You’re entering the amount here to notify us that you will file
Form 5884-C for the quarter and therefore reduce the
18. If You’re a Seasonal Employer . . . amount of the employer share of social security tax that is
If you hire employees seasonally—such as for summer or available to be reduced by the nonrefundable portion of the
winter only—check the box on line 18. Checking the box tells credit for qualified sick and family leave wages and the
the IRS not to expect four Forms 941 from you throughout the nonrefundable portion of the employee retention credit.
year because you haven't paid wages regularly. Part 4: May We Speak With Your
Generally, we won't ask about unfiled returns if at least
one taxable return is filed each year. However, you must
Third-Party Designee?
check the box on line 18 on every Form 941 you file. If you want to allow an employee, a paid tax preparer, or
Otherwise, the IRS will expect a return to be filed for each another person to discuss your Form 941 with the IRS, check
quarter. the “Yes” box in Part 4. Enter the name, phone number, and
Also, when you complete Form 941, be sure to check the the five-digit personal identification number (PIN) of the
box on the top of the form that corresponds to the quarter specific person to speak with—not the name of the firm that
reported. prepared your tax return. The designee may choose any five
numbers as his or her PIN.
The amounts entered on lines 19 through 23 are
! amounts that you use on Worksheet 1 to figure the By checking “Yes,” you authorize the IRS to talk to the
CAUTION credit for qualified sick and family leave wages and person you named (your designee) about any questions we
the employee retention credit. If you’re claiming these may have while we process your return. You also authorize
credits, you must enter the applicable amounts. your designee to do all of the following.
• Give us any information that is missing from your return.
19. Qualified Health Plan Expenses Allocable to • Call us for information about processing your return.
Qualified Sick Leave Wages • Respond to certain IRS notices that you’ve shared with
your designee about math errors and return preparation. The
Enter the qualified health plan expenses allocable to qualified IRS won't send notices to your designee.
sick leave wages. This amount is also entered on Worksheet
1, Step 2, line 2b. You’re not authorizing your designee to bind you to
anything (including additional tax liability) or to otherwise
20. Qualified Health Plan Expenses Allocable to represent you before the IRS. If you want to expand your
Qualified Family Leave Wages designee's authorization, see Pub. 947.
Enter the qualified health plan expenses allocable to qualified
family leave wages. This amount is also entered on The authorization will automatically expire 1 year from the
Worksheet 1, Step 2, line 2f. due date (without regard to extensions) for filing your Form
941. If you or your designee wants to terminate the
21. Qualified Wages for the Employee Retention authorization, write to the IRS office for your location using
the Without a payment address under Where Should You
Credit File, earlier.
Enter the qualified wages for the employee retention credit
(excluding the amount of any qualified health plan Part 5: Sign Here (Approved Roles)
expenses). This amount is also entered on Worksheet 1,
Step 3, line 3a. Complete all information and sign Form 941. The following
persons are authorized to sign the return for each type of
business entity.
• Sole proprietorship—The individual who owns the
business.

-18- Instructions for Form 941 (Rev. 3-2021)

• Corporation (including a limited liability company If you’re a paid preparer, enter your Preparer Tax
(LLC) treated as a corporation)—The president, vice Identification Number (PTIN) in the space provided. Include
president, or other principal officer duly authorized to sign. your complete address. If you work for a firm, enter the firm's
• Partnership (including an LLC treated as a name and the EIN of the firm. You can apply for a PTIN
partnership) or unincorporated organization—A online or by filing Form W-12. For more information about
responsible and duly authorized partner, member, or officer applying for a PTIN online, go to IRS.gov/PTIN. You can't use
having knowledge of its affairs. your PTIN in place of the EIN of the tax preparation firm.
• Single-member LLC treated as a disregarded entity Generally, don't complete this section if you’re filing the
for federal income tax purposes—The owner of the LLC
or a principal officer duly authorized to sign. return as a reporting agent and have a valid Form 8655 on
file with the IRS. However, a reporting agent must complete
• Trust or estate—The fiduciary. this section if the reporting agent offered legal advice, for
Form 941 may be signed by a duly authorized agent of the example, advising the client on determining whether its
taxpayer if a valid power of attorney has been filed. workers are employees or independent contractors for
Alternative signature method. Corporate officers or duly federal tax purposes.
authorized agents may sign Form 941 by rubber stamp,
mechanical device, or computer software program. For How To Get Forms, Instructions, and
details and required documentation, see Rev. Proc. 2005-39,
2005-28 I.R.B. 82, available at IRS.gov/irb/ Publications
2005-28_IRB#RP-2005-39.
You can view, download, or print most of the forms,
Paid Preparer Use Only instructions, and publications you may need at
IRS.gov/Forms. Otherwise, you can go to IRS.gov/
A paid preparer must sign Form 941 and provide the OrderForms to place an order and have them mailed to you.
information in the Paid Preparer Use Only section of Part 5 if The IRS will process your order for forms and publications as
the preparer was paid to prepare Form 941 and isn't an soon as possible. Don't resubmit requests you've already
employee of the filing entity. Paid preparers must sign paper sent us. You can get forms and publications faster online.
returns with a manual signature. The preparer must give you
a copy of the return in addition to the copy to be filed with the
IRS.

Instructions for Form 941 (Rev. 3-2021) -19-

Worksheet 1. Credit for Qualified Sick and Family Leave Wages and
the Employee Retention Credit Keep for Your Records
Determine how you will complete this worksheet
If you paid both qualified sick and family leave wages and qualified wages for purposes of the employee retention credit this quarter, complete Step 1,
Step 2, and Step 3. If you paid qualified sick and family leave wages this quarter but you didn't pay any qualified wages for purposes of the employee
retention credit this quarter, complete Step 1 and Step 2. If you paid qualified wages for purposes of the employee retention credit this quarter but you
didn't pay any qualified sick and family leave wages this quarter, complete Step 1 and Step 3.

Step 1. Determine the employer share of social security tax this quarter after it is reduced by any credit claimed on Form 8974
and any credit to be claimed on Form 5884-C and/or Form 5884-D
1a Enter the amount of social security tax from Form 941, Part 1, line 5a, column 2 . . . . . . . 1a
1b Enter the amount of social security tax from Form 941, Part 1, line 5b, column 2 . . . . . . . 1b
1c Add lines 1a and 1b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1c
1d Multiply line 1c by 50% (0.50) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1d
1e If you’re a third-party payer of sick pay that isn't an agent and you're claiming credits for
amounts paid to your employees, enter the employer share of social security tax included
on Form 941, Part 1, line 8 (enter as a positive number) . . . . . . . . . . . . . . . . . . . . . . . . . 1e
1f Subtract line 1e from line 1d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1f
1g If you received a Section 3121(q) Notice and Demand during the quarter, enter the amount
of the employer share of social security tax from the notice . . . . . . . . . . . . . . . . . . . . . . 1g
1h Employer share of social security tax. Add lines 1f and 1g . . . . . . . . . . . . . . . . . . . . 1h
1i Enter the amount from Form 941, Part 1, line 11a (credit from Form 8974) . . . . . . . . . . . . 1i
1j Enter the amount to be claimed on Form 5884-C, line 11, for this quarter . . . . . . . . . . . . . 1j
1j(i) Enter the amount to be claimed on Form 5884-D, line 12, for this quarter . . . . . . . . . . . . . 1j(i)
1k Total nonrefundable credits already used against the employer share of social
security tax. Add lines 1i, 1j, and 1j(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1k
1l Employer share of social security tax remaining. Subtract line 1k from line 1h . . . . . . 1l

Step 2. Figure the sick and family leave credit

2a Qualified sick leave wages reported on Form 941, Part 1, line 5a(i), column 1 . . . . . . . . . 2a
2a(i) Qualified sick leave wages included on Form 941, Part 1, line 5c, but not included on Form
941, Part 1, line 5a(i), column 1, because the wages reported on that line were limited by
the social security wage base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a(i)
2a(ii) Total qualified sick leave wages. Add lines 2a and 2a(i) . . . . . . . . . . . . . . . . . . . . . . . . . 2a(ii)
2a(iii) Qualified sick leave wages excluded from the definition of employment under section
3121(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a(iii)
2b Qualified health plan expenses allocable to qualified sick leave wages (Form 941, Part 3,
line 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2b
2c Employer share of Medicare tax on qualified sick leave wages. Multiply line 2a(ii) by 1.45%
(0.0145) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2c
2d Credit for qualified sick leave wages. Add lines 2a(ii), 2a(iii), 2b, and 2c . . . . . . . . . . . 2d
2e Qualified family leave wages reported on Form 941, Part 1, line 5a(ii), column 1 . . . . . . . 2e
2e(i) Qualified family leave wages included on Form 941, Part 1, line 5c, but not included on
Form 941, Part 1, line 5a(ii), column 1, because the wages reported on that line were
limited by the social security wage base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2e(i)
2e(ii) Total qualified family leave wages. Add lines 2e and 2e(i) . . . . . . . . . . . . . . . . . . . . . . . 2e(ii)
2e(iii) Qualified family leave wages excluded from the definition of employment under section
3121(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2e(iii)
2f Qualified health plan expenses allocable to qualified family leave wages (Form 941, Part 3,
line 20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2f
2g Employer share of Medicare tax on qualified family leave wages. Multiply line 2e(ii) by
1.45% (0.0145) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2g
2h Credit for qualified family leave wages. Add lines 2e(ii), 2e(iii), 2f, and 2g . . . . . . . . . 2h
2i Credit for qualified sick and family leave wages. Add lines 2d and 2h . . . . . . . . . . . . 2i
2j Nonrefundable portion of credit for qualified sick and family leave wages. Enter the
smaller of line 1l or line 2i. Enter this amount on Form 941, Part 1, line 11b . . . . . . . . . . . 2j
2k Refundable portion of credit for qualified sick and family leave wages. Subtract
line 2j from line 2i and enter this amount on Form 941, Part 1, line 13c . . . . . . . . . . . . . . 2k

Step 3. Figure the employee retention credit

3a Qualified wages (excluding qualified health plan expenses) for the employee retention
credit (Form 941, Part 3, line 21) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3a
3b Qualified health plan expenses allocable to qualified wages for the employee retention
credit (Form 941, Part 3, line 22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3b
3c Add lines 3a and 3b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3c
3d Retention credit. Multiply line 3c by 70% (0.70) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3d
3e Enter the amount of the employer share of social security tax from Step 1, line 1l . . . . . . . 3e
3f Enter the amount of the nonrefundable portion of the credit for qualified sick and family
leave wages from Step 2, line 2j . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3f
3g Subtract line 3f from line 3e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3g
3h Nonrefundable portion of employee retention credit. Enter the smaller of line 3d or
line 3g. Enter this amount on Form 941, Part 1, line 11c . . . . . . . . . . . . . . . . . . . . . . . .. 3h
3i Refundable portion of employee retention credit. Subtract line 3h from line 3d and
enter this amount on Form 941, Part 1, line 13d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3i

-20- Instructions for Form 941 (Rev. 3-2021)