Penalties by IRS for 941 Defaults: Know How to Avoid It


The penalties levied by IRS for 941 late filing or non filing or even the short payment of taxes as per Form 941 can be quite expensive for employers. so, in order to avoid harsh action by IRS , the only simple solution is to know things and then act within the time limit tax law provides.

Purpose of IRS for 941 Form Filing

The Form 941 is devised by IRS so that every employer provides information like :

  • Salaries/wages paid by you and also any income that employee reports to you(say tips receipt by them )
  • Total tax withheld from wages
  • Social security and Medicare taxes paid by employer & employee. Also any additional Medicare Tax withheld from employees.
  • Qualified small business payroll tax credit for increasing research activities.
  • Credit for qualified sick and family leave wages paid in 2022 for leave taken after March 31, 2020, and before October 1, 2021.
  • Credit for COBRA premium assistance payments.

Who Must File Form 941?

Every employer (except some . See next question below ) who paid wages subject to federal income tax withholding or social security and Medicare taxes, must file Form 941. If you are having a question like “Do you have to file form 941 if no payroll?” , the answer is simple. If you filed 941 once in any quarter because at that time there were payrolls, but later, in other quarters you do not pay any salary or wages, IRS instruction says as under :

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.

So, if you are not exempt from filing 941 , all kinds of employers are required to submit form 941 quarterly. So next time don’t ask “Do sole proprietors file 941? ” . Yes ! Yes!

Who are exempt from filing For 941?

In following situations, you are not required to file form 941.

  1. If IRS sends you notice to file Form 944,  don’t file Form 941 quarterly. Only file 944 form.
  2. Seasonal employers ( a business which generally runs during a periods of the year,for example a ski resort or a lawn care service or summer beach rental ) don’t have to file a Form 941 for quarters in which they have no tax liability For this, you need to check the box on line 18 every quarter you file Form 941. See section 12 of Pub. 15 for more information.
  1. If you employ household employees, you do not need to file Form 941 even though you are a household employer
  2. Farm employers do not require to file Form 941 for wages paid for agricultural labor.

What is the due date for Form 941?

The due date for filing Form 941 is generally due by the last day of the month following the end of the quarter. Following chart explains it better.

Wages Paid in Due date for Filing 941
January to March30th April
April to June31st July
July to September31st October
October to December31st January of next calendar year

What are the due dates for quarterly payroll taxes? Report your total taxes deposited for the quarter, using Form 941 and Form 941 Schedule B, by April 30, July 31, October 31 and January 31.

Can a penalty be imposed by IRS for 941 late filings?

IRS will impose a penalty for failure to file form 941. It should be noted the 941 penalty is not just for filature to file, but also for late filing of form 941. Basically the rule of 941 penalties is the same as law for imposing a penalty for failure to file tax return 1040. The penalty rate is 5% per month on the total amount due as per Form 941. The maximum number of months of delay for which the penalty is computed is 5 months.

Where can I download Form 941?

You can download the IRS form 941 for 2022 and also Consult latest IRS form 941 instructions

Can the 941 be filed electronically?

Yes, you can file form 941 electronically by purchasing IRS for 941 approved software. The filing of 941 is validated through a digital signature. In fact, employers can file 941 on Eftps also. Basically , the IRS e-file system allows filing form 941 through Modernized e-File (MeF) which is an electronic filing process that allows the Form 94x Family of Returns to be received through the Modernized e-File (MeF) .

Where do I send my 941 Quarterly reports?

The address on which you can send by mail is given in the chart below .

Employer based inMailing 941 Without a payment Mailing 941 With a payment .
Connecticut, Delaware, District of Columbia, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia, WisconsinDepartment of the Treasury
Internal Revenue Service
Kansas City, MO 64999-0005
Internal Revenue Service
P.O. Box 806532
Cincinnati, OH 45280-6532
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, WyomingDepartment of the Treasury
Internal Revenue Service
Ogden, UT 84201-0005
Internal Revenue Service
P.O. Box 932100
Louisville, KY 40293-2100
No legal residence or principal place of business in any stateInternal Revenue Service
P.O. Box 409101
Ogden, UT 84409
Internal Revenue Service
P.O. Box 932100
Louisville, KY 40293-2100
Special filing address for exempt organizations; federal, state, and local governmental entities; and Indian tribal governmental entities, regardless of locationDepartment of the Treasury
Internal Revenue Service
Ogden, UT 84201-0005
Internal Revenue Service
P.O. Box 932100
Louisville, KY 40293-2100

Knowledge is power . The aforesaid article brings to you all the important information that you as an employer must . This itself will save you from penalty by IRS for 941 failure to file or late filing.

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