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FAQ

Top FAQs

  1. Why e-File with PayME, LLC?
  2. Do I Need a 10-Digit IRS Issued PIN to e-File Form 94X? [Hint-No.]
  3. How Do I Pay Taxes on My Form 94X and What Are My Payment Options?
  4. How Long Does It Take a 94X Return To Be Accepted by the IRS?
  5. What is the Relationship Between PayME and TaxMe?
  6. How Does PayME Notify Clients a Return Has Been Accepted or Rejected by the IRS?
  7. What Happens if the IRS Rejects My Return?
  8. What Are the Penalties for Non-Compliance?
  9. How Much Does It Cost to e-File with PayME?
  10. Who Can Sign an e-Filed Return?

General FAQs

  1. What Forms Does PayME e-File?
  2. What IRS PIN Numbers Are Relevant to e-Filing?
  3. How Late Can I e-File on the Deadline? Time Stamp Rules.
  4. Can I e-File Form 94X by Myself?
  5. Can I e-File for Prior Years?
  6. Can I Start a Form, Stop and Comeback Later to Finish?
  7. I'm a CPA/Bookkeeper. Can I e-File for My Clients Using Your System?
  8. Do I get a Copy of the e-Filed Return?
  9. Does PayME e-File for Companies in All 50 States?
  10. Does PayME Have any Press Releases/Published Articles?

Form 941 FAQs

  1. What Is Form 941?
  2. Who Needs to File Form 941?
  3. What Information Is Needed to File Form 941?
  4. When Does Form 941 Needs to be Filed?
  5. What Quarter Should You Begin Filing Form 941?
  6. Where Does Form 941 Need to be Filed?
  7. What Are the Form 941 Deposit Tax Rules?
  8. What Is Form 941, Schedule B
  9. Who Needs to File Form 941, Schedule B?
  10. Can I e-File an Amended Form 941?
  11. When Can I Stop Filing Form 941?
  12. What’s the Difference Between Form 941 and Form 940?

Form 940 FAQs

  1. What Is Form 940?
  2. Who Needs to File Form 940?
  3. What Is Form 940, Schedule A?
  4. What Is a Form 940 Credit Reduction State?
  5. When Does Form 940 Need To Be Filed?
  6. When Do Form 940 Deposits Need To Be Made?
  7. Where Does Form 940 Need to be Filed?

Other FAQs

  1. What is Form 1099-MISC
  2. What is Form W-2
  3. What is Form 944?

 

 

Top FAQs

Q:

Why e-File with PayME, LLC?

A:

With passion and technical expertise, we challenged the status quo and created a streamlined e-filing compliance process unattainable by our competitors.

The simplicity is unmatched!

Our industry-first solution provides the most convenient, secure, powerful and efficient methods for electronic filing in the market.

Convenient: With PayME you don't need to register an ONLINE ACCOUNT. You don't need USERNAMES or PASSWORDS or IRS PINs. PayME's approach is simpler and more efficient than all our competitors. All our competitors require you to create an online account before e-filing a return which can be burdensome and time consuming. With us, your return can be completed in a matter of minutes and IRS acknowledgments can be generated in less than an hour (and within 24 hours guaranteed when the IRS systems are fully functional).

Secure: Underpinning our entire process is uncompromised security, seamlessly integrated so you don't feel its impact (but it's there). All server-client communications meet general standards of cryptographic protocols designed to provide communication security over the internet.

Powerful: PayME processes your data by partnering with Tax Me, LLC ("TaxMe") an Authorized IRS e-file Provider, transmitter, software developer and an electronic return originator (ERO). See for yourself. Together, we control all the proprietary rights used during electronic filing to create a simply beautiful process unattainable by our competitors.

Efficient: We use a crisp, custom-designed, button-based process that keeps the end user in mind. We eliminated wasted steps and created an intuitive, efficient process that we completely control. You sign using a 5-digit PIN you choose, plus an online signature. The simplicity is unmatched.

Our passion: Payroll-filing Made Easy. Try us. We believe you'll feel the difference!

Q:

Do I Need a 10-Digit IRS Issued PIN to e-File Form 94X? [Hint-No.]

A:

PayME's industry-first solution allows you to e-file entirely online, in minutes, without obtaining your own IRS-issued PIN. Its simplicity stands out against the competition. All other e-filing platforms require you to enter your own IRS-issued PINs or require you to download/ sign/ scan/ and upload an Employment Tax Declaration for an IRS e-file Return. What a pain! With them, if you don't have an IRS-issued PIN, you first must apply for one (on a different website with yet another application), and the IRS eventually will issue it to you by U.S. post which can take up to 45 days to receive. Until received, you cannot successfully e-file, which our competitors don't highlight (but they do highlight a tempting, low price to try to lock you into using their platform). Worse, they don't ask you to enter the IRS-issued PIN until the end of their processes, wasting your time.

PayME's process is different. We made it easy. It avoids this pitfall so you can e-file immediately, in minutes, with just an online signature, a self-selected PIN and a e-file Signature Authorization that is created seamlessly as an integrated step in the process. No printers, pens, scanners or IRS-issued PINs required.

So, if you lost your PIN, don’t worry about it. Leave it lost and e-file with us.

Q:

How Do I Pay Taxes on My Form 94X and What Are My Payment Options?

A:

The IRS considers depositing taxes and filing payroll tax returns (e.g., form 941) two completely separate processes. Please don't confuse the two. Payroll taxes are typically paid either monthly or semi-weekly, depending on the amount of employment taxes paid by the employer the previous year. The IRS requires taxpayers to deposit all depository taxes electronically by electronic funds transfer, unless the taxpayer qualifies for a de minimis exception. The de minimis exception applies if Form 941, line 12 is less than $2,500 or line 12 was less than $2,500, and the taxpayer didn't incur a $100,000 next-day deposit obligation during the quarter.

When a return is filed by paper, any de minimis balance due can be paid with the return by including a check. When e-filed, the taxpayers must pay electronically.

There are several ways to make a payment:

EFTPS Website: The Electronic Federal Tax Payment System (EFTPS) is provided free by the U.S. Department of the Treasury. After you've enrolled and received your credentials, you can pay any tax due to the Internal Revenue Service (IRS) using this system. You must be enrolled to use the EFTPS tax payment service. If enrolling for the first time, your information will need to be validated with the IRS. After validation is complete you will receive a personal identification number (PIN) via U.S. mail in five to seven business days at your IRS address of record.

Here's a link to the IRS EFTPS tax payment service. Click here to learn more.

PayME: You can pay your taxes through our sister company TaxMe, which is registered with the IRS to make federal tax payments. Enrollment is required for new clients and can take up to one hour. Once enrollment is complete, TaxMe can process payments immediately.

IMPORTANT: Payment requests must be received by 6pm the day before the requested transaction date.

Click here to begin.

Other Web Services: Using approved third-party service providers, the IRS also allows you to pay your taxes using a debit or credit card. Click here to learn more.

By phone:

You can always make a tax payment by calling the EFTPS voice response system at 1.800.555.3453. Follow the prompts to make your payment.

Remember, your tax payment is due regardless of the availability of any of these options.

Q:

How Long Does It Take a 94X Return To Be Accepted by the IRS?

A:

When the IRS systems are fully operational, PayME typically completes the process within two hours (and guaranteed within 24 hours). At times, we are able to complete the process within a few minutes.

The IRS systems have maintenance windows that affect all taxpayers regardless of the software used. These maintenance windows usually occur on weekends, for an average period of 16 hours, or during major system updates that usually occur in the months of December and January. During this maintenance, e-Filing is not possible.

Q:

What is the Relationship Between PayME and TaxMe?

A:

PayME, a data collection website, is a registered site of co-owner Ivan Silva's wholly-owned company Tax Me, LLC, ("TaxMe"). PayME processes submissions by partnering with TaxMe, which is an Authorized IRS e-File Provider, transmitter, software developer and an electronic return originator (ERO).

Q:

How Does PayME Notify Clients a Return Has Been Accepted or Rejected by the IRS?

A:

PayME processes your data by partnering with TaxMe to e-file your return. Once processed, Tax Me will automatically send you an email summarizing whether the return was accepted or rejected by the IRS. Accordingly, be on the lookout for an email from "TAXME - Info info@tax-me.com" with the subject "Employment Forms e-filing Status". We send it to the email address used in the submission (not the email address used for payment should they differ). If you do not find it, please check your SPAM folders.

Because the IRS communicates to us in Extensible Markup Language format (xml), we summarize the data in a more user-friendly format.

If a return is accepted, the email confirmation will be simple to understand and you do not need to take any further action.

If a return is rejected, the email communication will try to interpret the error and instruct you how to correct the return. For additional information, see FAQ: What Happens if the IRS Rejects My Return?

Q:

What Happens if the IRS Rejects My Return?

A:

If the IRS rejects your e-filed return, the IRS employs a 10-day lookback rule that will consider the return filed on the original submission date if all issues are corrected within 10 calendar days. This is helpful for rejections occurring on the filing deadline. The date is not extended regardless of weekends, holidays or the end of the year cutoff. If you do not correct the return within this 10-day window, you will need to re-submit an entirely new return and that return will not relate back to the original submission date.

Our policy follows the IRS lookback rule and gives you a 10-day window to correct a return after the first rejection. Rejected returns can be corrected within this window at no additional cost to you (up to 3 times), but once a return is electronically filed with the Internal Revenue Service, PayME will not issue a refund.

If a return is rejected, our email communication will try to interpret the error and supply you with the actions needed to correct the return. We will do our best effort to contact you, through email or phone, and help resolve any particular issues. However, you will be ultimately responsible to meet our 10-day correction window.

If you fail to submit a correction within a 10-day period after the first rejection, the return will be discarded from our systems and you will have to submit a new return online and pay a new e-filing fee.

Caveat: For early-filed returns, unless you tell us differently, we will automatically resubmit when the filing season opens up (and you can disregard this 10-day limit).

Q:

What Are the Penalties for Non-Compliance?

A:

These penalties apply to both form 941 and form 940.

Deposit Penalties (IRC 6656)

Here's what you could end up paying if you do not deposit correctly:

  • 2% of the amount due if your payment is 1-5 days late.
  • 5% of the amount due if your payment is 6-15 days late.
  • 10% of the amount due if your payment is 16 or more days late.
  • 10% of the amounts subject to electronic deposit requirements but not deposited using EFTPS
  • 15% of the amount due if you're notified of your delinquency and pay within 10 days of notice.

Filing and Paying Late Penalties (IRC 6651)

Here's what you could end up paying if you don't file a required Form 94X tax return:

  • Failure to timely file a Form 94X may result in a penalty of 5 percent of the tax due with that return for each month or part of a month the return is late. The penalty caps out at 25 percent.
Q:

How Much Does It Cost to e-File with PayME?

A:

Click here for pricing. The website will highlight the cost as you go.

Form 941, Schedule B typically applies ONLY to large taxpayers who have total annual payroll tax liabilities of at least $50,000 or have a single-day tax liability of at least $100,000.

Form 940, Schedule A only applies if you have unemployment obligations in more than one state OR if you live in a "Credit Reduction State" which, since 2017, only consists of the U.S. Virgin Islands.

Q:

Who Can Sign an e-Filed Return?

A:

The following persons are authorized to sign the return for each type of business:

  • Sole proprietorship—The individual who owns the business
  • Corporation (including a limited liability company (LLC) treated as a corporation)—The president, vice president, or other principal officer duly authorized to sign.
  • Partnership (including an LLC treated as a partnership) or unincorporated organization—A responsible and duly authorized partner, member, or officer having knowledge of its affairs.
  • Single-member LLC treated as a disregarded entity for federal income tax purposes—The owner of the LLC or a principal officer duly authorized to sign.
  • Trust or estate—The fiduciary.
  • Power of Attorney—Form 941 may be signed by a duly authorized agent of the taxpayer if a valid power of attorney has been filed.
  • Reporting Agent—A reporting agent is a specific type of relationship between the company and the reporting agent and authorizes the reporting agent to submit tax returns, make tax deposits, etc., on the company's behalf by filing form 8655 with the IRS and complying with Revenue Procedure (Rev. Proc.) 2012-32.
    • If the reporting agent is not providing legal advice (e.g., advising the client on determining whether its workers are employees or independent contractors for federal tax purposes), the reporting agent should NOT complete "Third-Party Preparer" information, including entering a Preparer Tax Identification Number (PTIN).
    • Reporting agents should sign payroll tax returns using their own name, not the name of their client.

Certified Public Accountants/Bookkeepers - In our process, a duly authorized agent of the taxpayer such as a CPA or bookkeeper can sign on behalf of the taxpayer if such person has proper authorization, such as a valid power of attorney, or pursuant to Form 8655, Reporting Agent Authorization. They should sign our signature pad using their own names. In addition, while the IRS does not require PayME to collect this authorization, the CPA/bookkeeper should have such documentation in their files.

General FAQs

Q:

What Forms Does PayME e-File?

A:

PayME is able to e-file basic payroll tax returns Form 941: Employer's QUARTERLY Federal Tax Return, and Form 940: Employer's Annual Federal Unemployment (FUTA) Tax Return.

In addition, TaxMe, our sister company, can e-file other forms, including, Form 1099-MISC and Form 944, Form 1099-MISC and Form W-2. Click here to learn more.

Q:

What IRS PIN Numbers Are Relevant to e-Filing?

A:

The IRS has two different PIN numbers that are relevant to e-filing and electronic payments: 1) The IRS PIN required to pay taxes using the EFTPS system, and 2) the IRS 10-Digit PIN used to e-file form 941 or 940.

Currently, while taxpayers still need an EFTPS Deposit PIN to pay taxes, they can now e-file without their own 94X PIN. Historically, a key problem to e-filing was the need for taxpayers to obtain their own IRS-issued PINs, which the IRS delivers by U.S. Post (and can take up to 45 days so companies who wanted to e-file really had to plan ahead). Moreover, third parties, such as attorneys, CPAs, tax return preparers or other tax professionals are not permitted to request PINs online on behalf of the business. Rather, Reporting Agents are required to mail the IRS a Letter of Application (LOA) together with a list of their clients' EINs and signed Forms 8655. The IRS then would mail a test PIN to the Reporting Agent. After a successful transmission, the IRS then would deliver a production PIN by U.S. Post.

PayME's process eliminates this administrative hassle by allowing Small Business Owners or their Agents to e-file immediately using the Practitioner PIN Method (i.e., using a 5-digit PIN or your choice).

Q:

How Late Can I e-File on the Deadline? Time Stamp Rules.

A:

To avoid penalties, under an IRS "e-Filing Mailbox Rule," you must e-file your Form 941 no later than midnight local time on the deadline. You can still e-file after the deadline, but the IRS will penalize you for late filing.

Q:

Can I e-File Form 94X by Myself?

A:

No, Form 941 Employer's Quarterly Federal Tax Return and the entire 94X family of forms cannot be e-filed directly with the IRS by your business. The IRS requires that all businesses electronically file form 941 through an approved intermediary.

Q:

Can I e-File for Prior Years?

A:

The IRS allows electronic filing of up to 3 years going back. This means that at any point in time, you will be allowed to electronically file 4 years' worth of returns. For example, if 2019 is the current year, you can e-file 2019, and the three prior years 2016, 2017 and 2018. In this situation, the IRS would not accept e-filed returns from 2015 and prior. You would need to file by paper.

Q:

Can I Start a Form, Stop and Comeback Later to Finish?

A:

Our process is designed for you to complete in one sitting (and our design allows you to do this quickly and easily). You may stop and comeback later to finish your form, provided you do not close your browser. However, if you do not complete and close your browser or turn off your computer, you will need to begin again. But don't worry, with no username/password, you can try one to see how you like it (without being locked in for future filings).

Q:

I'm a CPA/Bookkeeper. Can I e-File for My Clients Using Your System?

A:

Absolutely. We love and welcome both! With satisfied CPAs and Bookkeepers all across the US, we know you won't be disappointed (although you will need to have proper authority to submit on behalf of your clients).

Q:

Do I get a Copy of the e-Filed Return?

A:

Absolutely. In our process you must download, review and confirm the data before we e-file it with the IRS. As such, just save or print the downloaded file for your records. If you lose it, don't worry, we can always send you another copy.

Q:

Does PayME e-File for Companies in All 50 States?

A:

Yes. PayME can process forms from companies in all 50 States:

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Q:

Does PayME Have any Press Releases/Published Articles?

A:

Yes. Check out PayME's press release here.

Check out our recent article 8-Important e-File Tips for Form 941:

Form 941 FAQs

Q:

What Is Form 941?

A:

Federal tax Form 941, Employer's Quarterly Federal Tax Return, is the federal form employers use to report income taxes, social security tax, or Medicare tax withheld from employee's paychecks. The form also is used to report the employer's portion of social security or Medicare tax employee wages, payroll taxes and information the IRS deems important.

In general, if you pay employees (even yourself as an employee) then you will be required to use this form to report information to the IRS.

Q:

Who Needs to File Form 941?

A:

The IRS requires that any person or business that pays wages to an employee must file a Form 941 with the IRS each quarter. Filing must continue even if there are no employees during some of the quarters. There are certain limited exceptions (e.g., certain employers whose annual payroll tax and withholding liabilities are less than $1,000 may get approval to file the annual version – Form 944).

Q:

What Information Is Needed to File Form 941?

A:

Form 941 contains information about the withholding made from employee wages, as well as the employer contributions made for Social Security and Medicare taxes.

Form 941 calculations include totals for:

  • Number of employees and total pay for the period being reported
  • Amounts withheld from pay of employees for the period
  • Taxable Social Security and Medicare wages for the period
  • Calculation of total Social Security and Medicare wages
  • Adjustments for sick pay, tips, group-term life insurance, and other

The form requires a calculation of the total taxes (which PayME's process automates) and the total deposits made during the period. If there is a difference between the total taxes due and the total deposits, the amount still owed must be paid.

Q:

When Does Form 941 Needs to be Filed?

A:

The IRS imposes four filing deadlines (one for each quarter) as follows:

Your Form 941 is due by the last day of the month that follows the end of the quarter (and cannot be e-filed until the relevant quarte ends)

January, February, March
Quarter Ends: March 31
Earliest Form 941 Can be e-Filed: April 1
Form 941 Is Due: April 30
Extended Due Date: May 10

April, May, June
Quarter Ends: June 30
Earliest Form 941 Can be e-Filed: July 1
Form 941 Is Due: July 31
Extended Due Date: August 10

July, August, September
Quarter Ends: September 3
Earliest Form 941 Can be e-Filed: October 1
Form 941 Is Due: October 31
Extended Due Date: November 10

October, November, December
Quarter Ends: December 31
Earliest Form 941 Can be e-Filed: January 1
Form 941 Is Due: January 31
Extended Due Date: February 10

If the deadline falls on a Saturday, Sunday, or legal holiday, Form 941 is due by the next business day.

However, if all taxes have been paid in full, the return due date is extended by ten days from the quarter end date.

  • First quarter ending March 31st is due April 30th, May 10th = extended due date
  • Second quarter ending June 30th is due July 31st, August 10th = extended due date
  • Third quarter ending September 30th is due October 31st, November 10th = extended due date
  • Fourth quarter ending December 31st is due January 31st, February 10th = extended due date

If a small business misses the above deadlines for timely filing, the business should e-file as soon as possible to reduce penalties. There is no need to wait for a new window.

Q:

What Quarter Should You Begin Filing Form 941?

A:

Notice CP 575 is generated when your business applies for an EIN online or using Form SS-4. This notice identifies the forms and filing dates of your business.

If Notice CP 575 shows a filing requirement to file Form 941, you will be required to file form 941 beginning on the dates shown on the Notice and will be required to file every quarter, despite not having any employees.

If Notice CP 575 does not show a filing requirement for Form 941, then you are not required to file such forms. However, as soon as your business decides to have employees, you are automatically required to begin filing for that specific quarter. At this point, you will be required to file these forms every quarter despite not having any employees (until proper notification is provided to the IRS). If you don't have a copy of Notice CP 575, many taxpayers file form 941 to be conservative and ensure compliance.

For quarterly filers, you can notify the IRS that your business will not be required to file quarterly returns by marking the box on Part 3, Line 18 of Form 941 for "Seasonal employer". In this case, the IRS will not send you non-filing notifications.

Other exemptions apply to Household Employees and Farm Employers. If any of these apply to you, we encourage you to read the instructions for form 941 in the IRS website.

Q:

Where Does Form 941 Need to be Filed?

A:

If you’re still filing form 941 by regular mail, please let us help you. Our e-file process makes e-filing your return easier than completing by pen and paper as our web-based software calculates your tax and highlights many avoidable errors. With no username or password, you can try one to see how you like it. We, the IRS (and the trees) will thank you.

If you nevertheless want to mail it, the address can change from year to year as reported on the instructions for form 941. Here’s a link.

Q:

What Are the Form 941 Deposit Tax Rules?

A:

Payroll taxes are typically paid either monthly or semi-weekly, depending on the amount of employment taxes paid by the employer the previous year. The IRS requires taxpayers to deposit all depository taxes electronically by electronic funds transfer, unless the taxpayer qualifies for a de minimis exception. The de minimis exception applies if Form 941, line 12 is less than $2,500 or line 12 was less than $2,500, and the taxpayer didn't incur a $100,000 next-day deposit obligation during the quarter ($100,000 Next-Day Deposit Rule).

Your deposit schedule isn't determined by how often you pay your employees. Your deposit schedule depends on the total tax liability you reported on Form 941 during the previous 4-quarter lookback period (July 1 of the second preceding calendar year through June 30 of the preceding calendar year)

If you reported $50,000 or less of Form 941 taxes for the lookback period, you’re a monthly schedule depositor; if you reported more than $50,000, you’re a semiweekly schedule depositor. TIP: Under these rules, new employers will always be monthly depositors for the first year, provided the a $100,000 Next-Day Deposit Rule isn’t triggered.

Under the monthly deposit schedule, deposit accumulated taxes on payments made during a calendar month by the 15th day of the following month.

Under the semi-weekly deposit rules, if the payment day was on Wednesday, Thursday and/or Friday, deposits are required by the following Wednesday. If the payment day was on Saturday, Sunday, Monday and/or Tuesday, deposits are required by the following Friday.

If a deposit is due on a legal holiday, the deposit will be considered timely if it is made by the following business day. If a legal holiday occurs during the 3 business days following the close of the semiweekly period to make a deposit, you’ll have an additional business day to deposit for each day that is a legal holiday.

Q:

What Is Form 941, Schedule B?

A:

Form 941, Schedule B is an additional form that has to be filed with Form 941 each quarter to report the tax liability ONLY for "Semiweekly Schedule Depositors" (i.e., typically large taxpayers who have total annual payroll tax liabilities of at least $50,000) or taxpayers who have a single-day tax liability of at least $100,000.

When completing Schedule B, you report your TAX LIABILITY for the quarter on each day of the three-month period; don't use it to show your deposits. You're only required to fill out tax liability for the days you actually pay wages to your employees, not the tax liability accrued on each day.

Please pay special attention to the difference between the date you paid your employees ("Pay Date") versus the pay period over which your employees worked ("Pay Period Date") versus the date you deposited the associated tax payments ("Deposit Date").

Schedule B is divided into the 3 months that make up a quarter of a year. Each month has 31 numbered spaces that correspond to the dates of a typical month. You enter your tax liabilities in the spaces that correspond to the dates you paid wages to your employees (i.e., the Pay Dates), not the date payroll deposits were made (i.e., the Deposit Dates), and not the final day of the Pay Period Date. For example, if your payroll period ended on December 31, 2019, and you paid the wages for that period on January 6, 2020, you would: Go to Month 1 (because January is the first month of the quarter), and enter your tax liability on line 6 (because line 6 represents the sixth day of the month). You do NOT report this tax liability in Month 3, day 31 of the fourth quarter 2019, and you do NOT report this tax liability on the Deposit Date.

Q:

Who Needs to File Form 941, Schedule B?

A:

Not every employer needs to file a Schedule B with their quarterly Form 941. You only need to file if you fall into one of two tax liability categories:

  1. Semiweekly Schedule Depositors — You are a Semiweekly Schedule Depositor if you paid $50,000 or more in payroll taxes to the federal government during the lookback period (i.e., generally the last four quarters that begin July 1 and ends June 30). In such case, you must remit (pay) your taxes according to the schedule corresponding to your payroll pay dates.
  2. $100,000 Next Day Depositors—If you accumulate $100,000 or more in taxes on any given day, no your normal depositing schedule, you are required to make a next-day deposit to the federal government, and need to complete Schedule B.

If you do not satisfy either of these conditions, you don't need to complete Schedule B. For example, if you started a new businesses and do not meet the $100,000 Next Day Deposit rule, you do not need to complete Schedule B because your tax liability for any quarter in the lookback period before the date you started or acquired your business is considered to be zero. See IRS Notice 931 for additional information.

If your tax filing requirements change, the IRS should send you notice. Be on the lookout for your CP136 Notice, which explains your deposit requirements for your Form 941 filings for the next year, which may be different from your requirements for last year. The IRS bases your deposit requirement on the total tax you reported on your Forms 941 for the four previous consecutive quarterly periods (the lookback period).

Q:

Can I e-File an Amended Form 941?

A:

If you made a mistake on Form 941, unfortunately, you cannot just e-file a new version to correct the return. The IRS will reject the subsequent submission. Rather, you will need to file an amended return Form 941X by paper as the IRS does not accept electronic versions of amended 941 returns.

Q:

When Can I Stop Filing Form 941?

A:

Unless an exception applies, small businesses must continue to file (or e-file) form 941 every quarter after the initial filing even if they have no employees during some of the quarters, and even if they have no taxes to report. They file until the business has closed AND the small business has communicated this to the IRS by selecting form 941, line 17 and entering the final date wages were paid.

There are certain limited exceptions:

  • Household Employees. Taxpayers who have household employees like maids or housekeepers, report this information on Form 1040, schedule H, rather than reporting the information on form 941.
  • Small Taxpayers. Certain employers whose annual payroll tax and withholding liabilities are less than $1,000 may get approval to file the annual version – Form 944).
  • Seasonal Employers. If a taxpayer hires people seasonally, the taxpayer only needs to complete Form 941 for the quarters they worked there (partial or complete). To tell the IRS a taxpayer won't file a return each quarter, form 941, line 18 should be checked every quarter.
  • Farm Employers. Taxpayers with farm employees for agricultural labor use Form 943 instead of 941, because they have their own special rules for taxes that are different than the normal rules for taxes and withholding.
Q:

What’s the Difference Between Form 941 and Form 940?

A:

Federal tax Form 941, Employer's Quarterly Federal Tax Return, is the federal form employers use to report income taxes, social security tax, or Medicare tax withheld from employee's paychecks. The form also is used to report the employer's portion of social security or Medicare tax employee wages, payroll taxes and information the IRS deems important. While Form 941 need to be filed quarterly, tax deposits may need to be made more often.

Federal Tax Form 940, in contrast, is the Employer's Annual Federal Unemployment ("FUTA") Tax Return. The FUTA tax provides funds for paying unemployment compensation to workers who have lost their jobs. The business is responsible for the tax and does not come from employee wages.

Form 940 FAQ

Q:

What Is Form 940?

A:

Form 940 is the Employer's Annual Federal Unemployment ("FUTA") Tax Return.

The FUTA tax provides funds for paying unemployment compensation to workers who have lost their jobs.

The standard FUTA rate is 6% on the first $7,000 paid to the employee. Employers who pay and file their state unemployment taxes on time can receive a tax credit of up to 5.4%, meaning employers pay only 0.6% of the $7,000 paid to the employee or $42 maximum per employee. The state unemployment tax rate and wage base vary by state and is disclosed to the employer only by the state where it is registered.

Q:

Who Needs to File Form 940?

A:

An employer must file Form 940 if they paid wages of at least $1,500 to any employee during the standard calendar year. Businesses must also file Form 940 if they had any employee (temporary, part-time, or full-time) work anytime during 20 or more weeks. The 20 weeks do not need to be consecutive. There are also several exemptions for special circumstances (e.g., agricultural employees, foreign workers, Household employees, tax-exempt organizations).

Q:

What Is Form 940, Schedule A?

A:

Employers must complete Form 940: Schedule A- Multi-State Employer and Credit Reduction Information if they were required to pay state unemployment tax in more than one state, or if they paid wages in any state or jurisdiction subject to credit reduction.

If you are completing Schedule A because you are a multi-state payer, you only need to indicate the name of each state in which you paid state unemployment tax. You do NOT need to enter in the amount of FUTA Taxable Wages attributable to each state.

If you are completing Schedule A because you paid wages in any state or jurisdiction subject to credit reduction, you need to enter the amount of FUTA Taxable Wages attributable to each credit reduction state or jurisdiction (i.e., up to $7,000 per employee per year). Do NOT enter in total wages.

Q:

What Is a Form 940 Credit Reduction State?

A:

A state is a credit reduction state if it has taken loans from the federal government to meet its state unemployment benefits liabilities and has not repaid the loans within the allowable time frame. A reduction in the usual credit against the full FUTA tax rate means that employers paying wages subject to unemployment insurance tax in those states will owe a greater amount of tax. Accordingly, if a state is designated a credit reduction state, the FUTA credit rate for employers in that state will be reduced until the loan is repaid, ultimately requiring employers to pay additional unemployment tax when filing Form 940, plus Schedule A.

The following are credit reduction states:

California - only for tax years 2016 and 2017. [California repaid its loan in 2018 eliminating its classification.]

US Virgin Islands- 2016, 2017, 2018, and 2019

No other states are considered Credit Reduction States.

Q:

When Does Form 940 Need To Be Filed?

A:

Form 940 needs to be filed by January 31st of the following year. However, if that date falls on a weekend or government holiday, the due date is moved to the next business day.

For example, the 2019 filing deadline is Jan. 31, 2020.

Q:

When Do Form 940 Deposits Need To Be Made?

A:

Even though Form 940 is filed once a year, an employer may have to make quarterly tax deposits. If the federal unemployment tax is more than $500 for the calendar year, at least one quarterly payment must be made. The deposit must be made by the last day of the month after the end of the calendar quarter. For example, if an employer's federal unemployment tax totals $700 based on payroll for January through March, the tax must be deposited by April 30. If the quarterly liability is $500 or less in a quarter, it carries over to the next quarter. If liability for the first quarter of the year is $400, this carries over and is added to the liability in the second quarter to determine whether a payment is required. If quarterly payments are required, they must be deposited with the federal government using EFTPS.

Q:

Where Does Form 940 Need to be Filed?

A:

If you’re still filing form 940 by regular mail, please let us help you. Our e-file process makes e-filing your return easier than completing by pen and paper as our web-based software calculates your tax and highlights many avoidable errors. With no username or password, you can try one to see how you like it. We, the IRS (and the trees) will thank you.

If you nevertheless want to mail it, the address can change from year to year as reported on the instructions for form 940. Here’s a link.

Other FAQs

Q:

What is Form 1099-MISC

A:

This form is one of many in the 1099 series. Form 1099-MISC: Miscellaneous Income is an IRS form taxpayers use to report non-employee compensation (NEC). Taxpayers use this form to report business payments to independent contractors, freelancers, sole-proprietors, or self-employed individuals of $600 or more in a calendar year.

If you are reporting NEC payments in box 7, using either paper or electronic format, Forms 1099-MISC are due on or before January 31. For all other non-NEC payments, Forms 1099-MISC are due February 28 if you file on paper, or March 31, if you file electronically.

Electronic filing of Forms 1099-Misc is processed by TaxMe. For specific details on how the process works we encourage you to visit TaxMe's FAQ's page. Click here to learn more.

Q:

What is Form W-2

A:

Form W-2 is used by corporations and small businesses to report taxable income to workers. If a company reports with a W-2, taxes will be withheld for federal and state obligations. The W-2 also includes social security and government health care withholdings.

Employers must prepare a W-2 for each eligible employee and provide copies to the Social Security Administration and, if applicable, to the state where the business is registered as an employer. As an employer, you must mail or hand-deliver Form W-2s to your employees no later than January 31 for the previous tax year. The form is important for preparing tax returns.

Electronic filing of Forms W-2 is processed by TaxMe. For specific details on how the process works we encourage you to visit TaxMe's FAQ's page. Click here to learn more.

Q:

What is Form 944

A:

Form 944: Employer's ANNUAL Federal Tax Return is used to report payroll tax liability and payments. It records all the payroll taxes due for the year and the amounts the employer has already paid.

Form 944 is designed so the smallest employers (those whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less) will file and pay these taxes only once a year instead of every quarter.

Before filing form 944, you must receive IRS authorization by written notice. You cannot file Form 944 without it (even if you don’t have taxes to report).

If the IRS has not notified you to file Form 944, you can request to file it. To do so, you must contact the IRS via phone (1-800-829-4933) or send a written request. If you request to file Form 944 and the IRS does not reply, you must file Form 941.

You are eligible to file form 944 if your liability for social security, Medicare, and withheld federal income taxes is $1,000 or less for the entire year. Your payroll tax liability is the total amount you must pay to the IRS for these taxes, and it includes:

  • The amounts you have withheld from employee pay for federal income taxes
  • The amounts you have withheld from employee pay for social security taxes and Medicare taxes, and
  • The amounts your business must pay to match the social security and Medicare taxes.

Form 944 must be filed by January 31 of the year after the year being reported. If you made deposits on time and in full payment, you have until February 10 of the following year to file this form.

For example, for 2019, you must file Form 944 by January 31, 2020.