Instructions for IRS Form 941-SS "Employer's Quarterly Federal Tax Return - American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands"

This document contains official instructions for IRS Form 941-SS, Employer's Quarterly Federal Tax Return - American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands - a tax form released and collected by the Internal Revenue Service (IRS), a subdivision of the U.S. Department of the Treasury.

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Instructions for Form 941-SS
Department of the Treasury
Internal Revenue Service
(Rev. June 2021)
Employer's QUARTERLY Federal Tax Return—American Samoa, Guam, the
Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands
Section references are to the Internal Revenue Code unless
Under section 3133, the credits are increased by the
otherwise noted.
amount of the employer share of social security tax and
Medicare tax on the qualified sick and family leave wages.
Future Developments
Governmental employers (except for the federal
government and its agencies and instrumentalities unless
For the latest information about developments related to
described in section 501(c)(1)) may now claim the credits.
Form 941-SS and its instructions, such as legislation enacted
Generally, the same wages can’t be used as both qualified
after they were published, go to IRS.gov/Form941SS.
sick leave wages and qualified family leave wages.
What's New
Additionally, you may not benefit from both the credit for
qualified sick and family leave wages and the employee
The COVID-19 related credit for qualified sick and fami-
retention credit with respect to the same wages. The credit
ly leave wages has been extended and amended. The
for qualified sick leave wages and qualified family leave
American Rescue Plan Act of 2021 (the ARP) adds new
wages doesn't apply to wages taken into account as payroll
sections 3131, 3132, and 3133 to the Internal Revenue Code
costs for a Small Business Interruption Loan under the
to provide credits for qualified sick and family leave wages
Paycheck Protection Program (PPP) that is forgiven or in
similar to the credits that were previously enacted under the
connection with shuttered operator grants and restaurant
Families First Coronavirus Response Act (FFCRA) and
revitalization grants.
amended and extended by the COVID-related Tax Relief Act
The credit for qualified sick and family leave wages isn’t
of 2020. The credits under sections 3131 and 3132 are
allowed in a quarter in which the employer provides the leave
available for qualified leave wages paid for leave taken after
in a manner that discriminates in favor of highly compensated
March 31, 2021, and before October 1, 2021. Below are the
employees, full-time employees, or employees on the basis
major changes made under the ARP.
of employment tenure. See
Highly compensated
employee,
The ARP keeps the daily wage thresholds that previously
later, for the definition.
existed. The aggregate cap on qualified sick leave wages
How you report qualified sick and family leave wages and
remains at 80 hours (10 days), but the limitation on the
the credit for qualified sick and family leave wages has
number of days resets with respect to leave taken by
changed. Taxable qualified sick and family leave wages for
employees beginning on April 1, 2021. The aggregate cap on
leave taken after March 31, 2021, are included on line 5a and
qualified family leave wages increases to $12,000 from the
taxed at 12.4% for social security tax purposes. However, if
previous cap of $10,000, and the aggregate cap resets with
you’re reporting any qualified sick and family leave wages for
respect to leave taken by employees beginning on April 1,
leave taken before April 1, 2021, these wages are reported
2021.
on lines 5a(i) and 5a(ii), respectively, and taxed at 6.2% for
The ARP also created a new category of leave under the
social security tax purposes. For leave taken before April 1,
Emergency Paid Sick Leave Act (EPSLA) and the Expanded
2021, the credit for qualified sick and family leave wages is
Family and Medical Leave Act (Expanded FMLA) to include
reported on line 11b (nonrefundable portion) and, if
the time the employee is seeking or awaiting the results of a
applicable, line 13c (refundable portion). For leave taken
diagnostic test for, or a medical diagnosis of, COVID-19 (and
after March 31, 2021, the credit for qualified sick and family
the employee has been exposed to COVID-19 or the
leave wages is reported on line 11d (nonrefundable portion)
employee’s employer has requested such test or diagnosis),
and, if applicable, line 13e (refundable portion); and the
or the employee is obtaining immunizations related to
nonrefundable portion of the credit is against the employer
COVID-19 or recovering from an injury, disability, illness, or
share of Medicare tax. For more information, see the
condition related to such immunization. Additionally,
instructions for
line
11b,
line
11d,
line
13c, and
line
13e, later.
employers may provide employees with paid family leave if
Use
Worksheet 1
to figure the credit for leave taken before
the employee is unable to work due to any of the conditions
for which eligible employers may provide paid sick leave
April 1, 2021. Use
Worksheet 3
to figure the credit for leave
under the EPSLA.
taken after March 31, 2021. For more information about the
credit for qualified sick and family leave wages, go to
The credits are still increased by the qualified health plan
expenses allocable to the qualified sick and family leave
IRS.gov/PLC.
wages, but the credits are now also increased, subject to the
The COVID-19 related employee retention credit has
qualified leave wage limitations, by certain amounts paid
been extended and amended. The ARP adds new section
under collective bargaining agreements that are properly
3134 to the Internal Revenue Code to provide an employee
allocable to the qualified leave wages. The collectively
retention credit similar to the credit that was previously
bargained contributions paid by an eligible employer that are
enacted under the Coronavirus Aid, Relief, and Economic
eligible for the credit are collectively bargained defined
Security (CARES) Act and amended and extended by the
benefit pension plan contributions and collectively bargained
Taxpayer Certainty and Disaster Tax Relief Act of 2020. The
apprenticeship program contributions that are properly
employee retention credit is available for qualified wages
allocable to qualified leave wages.
paid before January 1, 2022. Generally, the rules for the
employee retention credit for the second quarter of 2021 and
third and fourth quarters of 2021 are substantially similar.
Jun 23, 2021
Cat. No. 35530F
Instructions for Form 941-SS
Department of the Treasury
Internal Revenue Service
(Rev. June 2021)
Employer's QUARTERLY Federal Tax Return—American Samoa, Guam, the
Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands
Section references are to the Internal Revenue Code unless
Under section 3133, the credits are increased by the
otherwise noted.
amount of the employer share of social security tax and
Medicare tax on the qualified sick and family leave wages.
Future Developments
Governmental employers (except for the federal
government and its agencies and instrumentalities unless
For the latest information about developments related to
described in section 501(c)(1)) may now claim the credits.
Form 941-SS and its instructions, such as legislation enacted
Generally, the same wages can’t be used as both qualified
after they were published, go to IRS.gov/Form941SS.
sick leave wages and qualified family leave wages.
What's New
Additionally, you may not benefit from both the credit for
qualified sick and family leave wages and the employee
The COVID-19 related credit for qualified sick and fami-
retention credit with respect to the same wages. The credit
ly leave wages has been extended and amended. The
for qualified sick leave wages and qualified family leave
American Rescue Plan Act of 2021 (the ARP) adds new
wages doesn't apply to wages taken into account as payroll
sections 3131, 3132, and 3133 to the Internal Revenue Code
costs for a Small Business Interruption Loan under the
to provide credits for qualified sick and family leave wages
Paycheck Protection Program (PPP) that is forgiven or in
similar to the credits that were previously enacted under the
connection with shuttered operator grants and restaurant
Families First Coronavirus Response Act (FFCRA) and
revitalization grants.
amended and extended by the COVID-related Tax Relief Act
The credit for qualified sick and family leave wages isn’t
of 2020. The credits under sections 3131 and 3132 are
allowed in a quarter in which the employer provides the leave
available for qualified leave wages paid for leave taken after
in a manner that discriminates in favor of highly compensated
March 31, 2021, and before October 1, 2021. Below are the
employees, full-time employees, or employees on the basis
major changes made under the ARP.
of employment tenure. See
Highly compensated
employee,
The ARP keeps the daily wage thresholds that previously
later, for the definition.
existed. The aggregate cap on qualified sick leave wages
How you report qualified sick and family leave wages and
remains at 80 hours (10 days), but the limitation on the
the credit for qualified sick and family leave wages has
number of days resets with respect to leave taken by
changed. Taxable qualified sick and family leave wages for
employees beginning on April 1, 2021. The aggregate cap on
leave taken after March 31, 2021, are included on line 5a and
qualified family leave wages increases to $12,000 from the
taxed at 12.4% for social security tax purposes. However, if
previous cap of $10,000, and the aggregate cap resets with
you’re reporting any qualified sick and family leave wages for
respect to leave taken by employees beginning on April 1,
leave taken before April 1, 2021, these wages are reported
2021.
on lines 5a(i) and 5a(ii), respectively, and taxed at 6.2% for
The ARP also created a new category of leave under the
social security tax purposes. For leave taken before April 1,
Emergency Paid Sick Leave Act (EPSLA) and the Expanded
2021, the credit for qualified sick and family leave wages is
Family and Medical Leave Act (Expanded FMLA) to include
reported on line 11b (nonrefundable portion) and, if
the time the employee is seeking or awaiting the results of a
applicable, line 13c (refundable portion). For leave taken
diagnostic test for, or a medical diagnosis of, COVID-19 (and
after March 31, 2021, the credit for qualified sick and family
the employee has been exposed to COVID-19 or the
leave wages is reported on line 11d (nonrefundable portion)
employee’s employer has requested such test or diagnosis),
and, if applicable, line 13e (refundable portion); and the
or the employee is obtaining immunizations related to
nonrefundable portion of the credit is against the employer
COVID-19 or recovering from an injury, disability, illness, or
share of Medicare tax. For more information, see the
condition related to such immunization. Additionally,
instructions for
line
11b,
line
11d,
line
13c, and
line
13e, later.
employers may provide employees with paid family leave if
Use
Worksheet 1
to figure the credit for leave taken before
the employee is unable to work due to any of the conditions
for which eligible employers may provide paid sick leave
April 1, 2021. Use
Worksheet 3
to figure the credit for leave
under the EPSLA.
taken after March 31, 2021. For more information about the
credit for qualified sick and family leave wages, go to
The credits are still increased by the qualified health plan
expenses allocable to the qualified sick and family leave
IRS.gov/PLC.
wages, but the credits are now also increased, subject to the
The COVID-19 related employee retention credit has
qualified leave wage limitations, by certain amounts paid
been extended and amended. The ARP adds new section
under collective bargaining agreements that are properly
3134 to the Internal Revenue Code to provide an employee
allocable to the qualified leave wages. The collectively
retention credit similar to the credit that was previously
bargained contributions paid by an eligible employer that are
enacted under the Coronavirus Aid, Relief, and Economic
eligible for the credit are collectively bargained defined
Security (CARES) Act and amended and extended by the
benefit pension plan contributions and collectively bargained
Taxpayer Certainty and Disaster Tax Relief Act of 2020. The
apprenticeship program contributions that are properly
employee retention credit is available for qualified wages
allocable to qualified leave wages.
paid before January 1, 2022. Generally, the rules for the
employee retention credit for the second quarter of 2021 and
third and fourth quarters of 2021 are substantially similar.
Jun 23, 2021
Cat. No. 35530F
However, the following changes under the ARP begin July 1,
you must also report the number of individuals provided
2021, and are applicable for only the third and fourth quarters
COBRA premium assistance on line 11f. Use
Worksheet 5
to
of 2021.
figure the credit. For more information, see the instructions
The ARP creates a new category of an eligible employer
for
line
11e,
line
11f, and
line
13f, later. For more information
called a recovery startup business. For more information, see
on COBRA premium assistance payments and the credit,
Recovery startup
business, later.
see Notice 2021-31, 2021-23 I.R.B. 1173, available at
Qualified wages for the employee retention credit under
IRS.gov/irb/2021-23_IRB#NOT-2021-31.
section 3134 don't include wages taken into account for
Advance payment of COVID-19 credits extended. Based
credits under sections 41, 45A, 45P, 45S, 51, 1396, 3131,
on the extensions of the credit for qualified sick and family
and 3132. Additionally, qualified wages for the employee
leave wages and the employee retention credit, and the new
retention credit can't include amounts used as payroll costs
credit for COBRA premium assistance payments, discussed
for a Small Business Interruption Loan under the PPP that is
above, Form 7200, Advance Payment of Employer Credits
forgiven or amounts used as payroll costs for shuttered
Due to COVID-19, may be filed to request an advance
operator grants and restaurant revitalization grants.
payment. For more information, including information on
For wages paid before July 1, 2021, the nonrefundable
which employers are eligible to request an advance payment,
portion of the employee retention credit is against the
the deadlines for requesting an advance, and the amount
employer share of social security tax. However, for wages
that can be advanced, see the Instructions for Form 7200.
paid after June 30, 2021, the nonrefundable portion of the
Reminders
employee retention credit is against the employer share of
Medicare tax. The nonrefundable portion of the credit is still
Don't use an earlier revision of Form 941-SS to report
claimed on line 11c and, if applicable, the refundable portion
taxes for 2021. Use the March 2021 revision of Form
!
of the credit is still claimed on line 13d. For more information,
941-SS only to report taxes for the quarter ending
see the instructions for
line 11c
and
line
13d, later. Use
CAUTION
March 31, 2021. The IRS expects the June 2021 revision of
Worksheet 2
to figure the credit for wages paid before July 1,
Form 941-SS and these instructions to be used for the
2021 (second quarter). Use
Worksheet 4
to figure the credit
second, third, and fourth quarters of 2021. If changes in law
for wages paid after June 30, 2021, and before January 1,
require additional changes to Form 941-SS, the form and/or
2022 (third and fourth quarters).
these instructions may be revised. Prior revisions of Form
See Notice 2021-23, 2021-16 I.R.B. 1113, available at
941-SS are available at
IRS.gov/Form941SS
(select the link
IRS.gov/irb/2021-16_IRB#NOT-2021-23, for guidance on the
for "All Form 941-SS Revisions" under "Other Items You May
employee retention credit provided under section 2301 of the
Find Useful").
CARES Act, as amended by section 207 of the Taxpayer
Certainty and Disaster Tax Relief Act of 2020, for qualified
Social security and Medicare tax for 2021. The rate of
wages paid after December 31, 2020, and before July 1,
social security tax on taxable wages, including qualified sick
2021. The IRS expects to issue guidance about the
leave wages and qualified family leave wages for leave taken
employee retention credit provided under the ARP for wages
after March 31, 2021, is 6.2% each for the employer and
paid after June 30, 2021, and before January 1, 2022, later
employee or 12.4% for both. Qualified sick leave wages and
this year. A link to any new guidance issued will be posted at
qualified family leave wages for leave taken before April 1,
IRS.gov/ERC.
2021, aren't subject to the employer share of social security
tax; therefore, the tax rate on these wages is 6.2%. The
New credit for COBRA premium assistance payments.
social security wage base limit is $142,800.
Section 9501 of the ARP provides for COBRA premium
assistance in the form of a full reduction in the premium
The Medicare tax rate is 1.45% each for the employee
otherwise payable by certain individuals and their families
and employer, unchanged from 2020. There is no wage base
who elect COBRA continuation coverage due to a loss of
limit for Medicare tax.
coverage as the result of a reduction in hours or an
Social security and Medicare taxes apply to the wages of
involuntary termination of employment (assistance eligible
household workers you pay $2,300 or more in cash wages in
individuals). This COBRA premium assistance is available for
2021. Social security and Medicare taxes apply to election
periods of coverage beginning on or after April 1, 2021,
workers who are paid $2,000 or more in cash or an
through periods of coverage beginning on or before
equivalent form of compensation in 2021.
September 30, 2021. However, the COBRA premium
New payroll tax credit for certain tax-exempt organiza-
assistance credit could be claimed on employment tax
tions affected by qualified disasters. Section 303(d) of
returns for the second, third, or fourth quarter of 2021,
the Taxpayer Certainty and Disaster Tax Relief Act of 2020
depending on when the employer (or other person) becomes
allows for a new payroll tax credit for certain tax-exempt
entitled to the credit. Some multiemployer plans and insurers
organizations affected by certain qualified disasters not
don't normally file an employment tax return but will need to
related to COVID-19. This new credit will be claimed on new
file one if they want to claim the COBRA premium assistance
Form 5884-D (not on Form 941-SS). Form 5884-D is filed
credit.
after the Form 941-SS for the quarter for which the credit is
Section 9501(b) of the ARP adds new section 6432 to the
being claimed has been filed. If you will claim this credit on
Internal Revenue Code that allows a credit (COBRA premium
Form 5884-D for a calendar quarter of 2021 and you're also
assistance credit) against the employer share of Medicare
claiming a credit for qualified sick and family leave wages for
tax for each calendar quarter in an amount equal to the
leave taken before April 1, 2021, and/or the employee
premiums not paid by assistance eligible individuals for
retention credit in the second quarter of 2021, you must
COBRA continuation coverage by reason of section 9501(a)
include any credit that will be claimed on Form 5884-D on
(1) of the ARP. The nonrefundable portion of the credit is
Worksheet 1
and/or
Worksheet
2, respectively, for that
reported on line 11e and, if applicable, the refundable portion
of the credit is reported on line 13f. If you claim this credit,
-2-
Instructions for Form 941-SS (Rev. 6-2021)
quarter. For more information about this credit. go to
IRS.gov/
will be considered timely. Any payments or deposits you
Form5884D.
make before December 31, 2021, are first applied against
your payment due on December 31, 2021, and then applied
Deferral of the employer share of social security tax ex-
against your payment due on December 31, 2022. For
pired. The CARES Act allowed employers to defer the
example, if your employer share of social security tax for the
deposit and payment of the employer share of social security
third quarter of 2020 was $20,000 and you deposited $5,000
tax. The deferred amount of the employer share of social
of the $20,000 during the third quarter of 2020 and you
security tax was only available for deposits due on or after
deferred $15,000 on Form 941-SS, line 13b, then you must
March 27, 2020, and before January 1, 2021, as well as
pay $5,000 by December 31, 2021, and $10,000 by
deposits and payments due after January 1, 2021, that are
December 31, 2022. However, if your employer share of
required for wages paid on or after March 27, 2020, and
social security tax for the third quarter of 2020 was $20,000
before January 1, 2021. One-half of the employer share of
and you deposited $15,000 of the $20,000 during the third
social security tax is due by December 31, 2021, and the
quarter of 2020 and you deferred $5,000 on Form 941-SS,
remainder is due by December 31, 2022. Because both
line 13b, then you don’t need to pay any deferred amount by
December 31, 2021, and December 31, 2022, are
December 31, 2021, because 50% of the amount that could
nonbusiness days, payments made on the next business day
have been deferred ($10,000) has already been paid and is
will be considered timely. Any payments or deposits you
first applied against your payment that would be due on
make before December 31, 2021, are first applied against
December 31, 2021. Accordingly, you must pay the $5,000
your payment due on December 31, 2021, and then applied
deferral by December 31, 2022. Payment of the deferral isn't
against your payment due on December 31, 2022. For more
reported on Form 941-SS. For additional information, go to
information about the deferral of employment tax deposits,
IRS.gov/ETD.
go to IRS.gov/ETD. See
Paying the deferred amount of the
employer share of social security tax
and
How to pay the
Paying the deferred amount of the employee share of
deferred amount of the employer and employee share of
social security tax. The due date for the withholding and
social security
tax, later, for information about paying the
payment of the employee share of social security tax is
deferred amount of the employer share of social security tax.
postponed until the period beginning on January 1, 2021,
and ending on December 31, 2021. The employer must
Deferral of the employee share of social security tax ex-
withhold and pay the total deferred employee share of social
pired. The Presidential Memorandum on Deferring Payroll
security tax ratably from wages paid to the employee
Tax Obligations in Light of the Ongoing COVID-19 Disaster,
between January 1, 2021, and December 31, 2021. If
issued on August 8, 2020, directed the Secretary of the
necessary, the employer may make arrangements to
Treasury to defer the withholding, deposit, and payment of
otherwise collect the total deferred taxes from the employee.
the employee share of social security tax on wages paid
The employer is liable to pay the deferred taxes to the IRS
during the period from September 1, 2020, through
and must do so before January 1, 2022, to avoid interest,
December 31, 2020. The deferral of the withholding and
penalties, and additions to tax on those amounts. Because
payment of the employee share of social security tax was
January 1, 2022, is a nonbusiness day, payments made on
available for employees whose social security wages paid for
January 3, 2022, will be considered timely. Payment of the
a biweekly pay period were less than $4,000, or the
deferral isn't reported on Form 941-SS. For more information
equivalent threshold amount for other pay periods. The
about the deferral of the employee share of social security
COVID-related Tax Relief Act of 2020 defers the due date for
tax, see
Notice 2020-65
and
Notice
2021-11.
the withholding and payment of the employee share of social
security tax until the period beginning on January 1, 2021,
How to pay the deferred amount of the employer and
and ending on December 31, 2021. For more information
employee share of social security tax. You may pay the
about the deferral of employee social security tax, see Notice
amount you owe electronically using the Electronic Federal
2020-65, 2020-38 I.R.B. 567, available at
IRS.gov/irb/
Tax Payment System (EFTPS), by credit or debit card, or by
2020-38_IRB#NOT-2020-65, and Notice 2021-11, 2021-06
a check or money order. The preferred method of payment is
I.R.B. 827, available at
IRS.gov/irb/
EFTPS. For more information, go to EFTPS.gov, or call 800-
2021-06_IRB#NOT-2021-11. Also see
Paying the deferred
555-4477 or 800-733-4829 (TDD). To pay the deferred
amount of the employee share of social security tax
and
How
amount using EFTPS, select Form 941-SS, the calendar
to pay the deferred amount of the employer and employee
quarter in 2020 to which the payment relates, and the option
share of social security
tax, later, for information about paying
to pay the deferred amount.
the deferred amount of the employee share of social security
To pay by credit or debit card, go to IRS.gov/PayByCard.
tax. For information about how to report the deferred amount
If you pay by check or money order, include a 2020 Form
of the employee share of social security tax on Forms
941-V(SS), Payment Voucher, for the quarter in which you
W-2AS, W-2CM, W-2GU, and W-2VI, and Form W-2c for
originally deferred the deposit and payment. Darken the
2020, see
IRS.gov/FormW2
and the 2021 General
circle identifying the quarter for which the payment is being
Instructions for Forms W-2 and W-3.
made. The 2020 Form 941-V(SS) is on page 5 of Form
941-SS and is available at
IRS.gov/Form941SS
(select the
Paying the deferred amount of the employer share of
link for "All Form 941-SS Revisions" under "Other Items You
social security tax. One-half of the employer share of
May Find Useful"). Make the check or money order payable
social security tax is due by December 31, 2021, and the
to “United States Treasury.” Enter your EIN, “Form 941-SS,”
remainder is due by December 31, 2022. Because both
and the calendar quarter in which you originally deferred the
December 31, 2021, and December 31, 2022, are
deposit and payment (for example, “2nd Quarter 2020”).
nonbusiness days, payments made on the next business day
-3-
Instructions for Form 941-SS (Rev. 6-2021)
Payments should be sent to:
Filers, electronically. For more information about a CPEO’s
requirement to file electronically, see Rev. Proc. 2017-14,
2017-3 I.R.B. 426, available at
IRS.gov/irb/
Department of the Treasury
Department of the Treasury
2017-03_IRB#RP-2017-14.
Internal Revenue Service
or
Internal Revenue Service
Ogden, UT 84201-0030
Kansas City, MO
Outsourcing payroll duties. Generally, as an employer,
64999-0030
you're responsible to ensure that tax returns are filed and
deposits and payments are made, even if you contract with a
third party to perform these acts. You remain responsible if
Send your payment to the address above that is in the same
the third party fails to perform any required action. Before you
state as the address to which you would mail returns filed
choose to outsource any of your payroll and related tax
without a payment, as shown under
Where Should You
File,
duties (that is, withholding, reporting, and paying over social
later. For more information about the deferral of social
security, Medicare, FUTA, and income taxes) to a third-party
security tax, go to
IRS.gov/ETD
and see
Notice 2020-65
and
payer, such as a payroll service provider or reporting agent,
Notice
2021-11.
go to
IRS.gov/OutsourcingPayrollDuties
for helpful
Qualified small business payroll tax credit for increas-
information on this topic. If a CPEO pays wages and other
ing research activities. For tax years beginning after 2015,
compensation to an individual performing services for you,
a qualified small business may elect to claim up to $250,000
and the services are covered by a contract described in
of its credit for increasing research activities as a payroll tax
section 7705(e)(2) between you and the CPEO (CPEO
credit against the employer share of social security tax. The
contract), then the CPEO is generally treated for employment
payroll tax credit election must be made on or before the due
tax purposes as the employer, but only for wages and other
date of the originally filed income tax return (including
compensation paid to the individual by the CPEO. However,
extensions). The portion of the credit used against the
with respect to certain employees covered by a CPEO
employer share of social security tax is allowed in the first
contract, you may also be treated as an employer of the
calendar quarter beginning after the date that the qualified
employees and, consequently, may also be liable for federal
small business filed its income tax return. The election and
employment taxes imposed on wages and other
determination of the credit amount that will be used against
compensation paid by the CPEO to such employees. For
the employer share of social security tax are made on Form
more information on the different types of third-party payer
6765, Credit for Increasing Research Activities. The amount
arrangements, see section 16 of Pub. 15.
from Form 6765, line 44, must then be reported on Form
COVID-19 employment tax credits when return filed by
8974, Qualified Small Business Payroll Tax Credit for
a third-party payer. If you're the common-law employer of
Increasing Research Activities. Form 8974 is used to
the individuals that are paid qualified sick or family leave
determine the amount of the credit that can be used in the
wages, paid wages qualifying for the employee retention
current quarter. The amount from Form 8974, line 12, is
credit, and/or provided COBRA premium assistance, you're
reported on Form 941-SS, line 11a. If you’re claiming the
entitled to the credit for the sick and family leave wages, the
research payroll tax credit on your Form 941-SS, you must
employee retention credit, and/or the COBRA premium
attach Form 8974 to that Form 941-SS. For more information
assistance credit, regardless of whether you use a third-party
about the payroll tax credit, see Notice 2017-23, 2017-16
payer (such as a PEO, CPEO, or section 3504 agent) to
I.R.B. 1100, available at
IRS.gov/irb/
report and pay your federal employment taxes. The
2017-16_IRB#NOT-2017-23, and
IRS.gov/
third-party payer isn't entitled to the credits with respect to
ResearchPayrollTC. Also see
Adjusting tax liability for
the wages and taxes it remits on your behalf, or the COBRA
nonrefundable credits claimed on lines 11a, 11b, 11c, 11d,
premium assistance it remits on your behalf (regardless of
and
11e, later.
whether the third party is considered an "employer" for other
Certification program for professional employer organi-
purposes). With respect to the COBRA premium assistance
zations (PEOs). The Stephen Beck, Jr., ABLE Act of 2014
credit, the preceding sentences assume the common-law
required the IRS to establish a voluntary certification program
employer is the person to whom premiums are payable for
for PEOs. PEOs handle various payroll administration and
purposes of the credit. If the insurer or multiemployer plan is
tax reporting responsibilities for their business clients and are
the person to whom premiums are payable, the references to
typically paid a fee based on payroll costs. To become and
employer in this paragraph should be read to refer to the
remain certified under the certification program, certified
insurer or multiemployer plan, as applicable.
professional employer organizations (CPEOs) must meet
Under an exception to the rule that only the common-law
various requirements described in sections 3511 and 7705
employer is entitled to the COBRA premium assistance credit
and related published guidance. Certification as a CPEO
even if the common-law employer uses a third-party payer, a
may affect the employment tax liabilities of both the CPEO
third-party payer is entitled to the credit if it is treated as the
and its customers. A CPEO is generally treated for
person to whom premiums are payable. A third-party payer is
employment tax purposes as the employer of any individual
treated as the person to whom premiums are payable if the
who performs services for a customer of the CPEO and is
third-party payer is the entity that pays wages subject to
covered by a contract described in section 7705(e)(2)
federal employment taxes on behalf of the common-law
between the CPEO and the customer (CPEO contract), but
employer and reports those wages and taxes on an
only for wages and other compensation paid to the individual
aggregate Form 941-SS that it files on behalf of the
by the CPEO. To become a CPEO, the organization must
employer, and it:
apply through the IRS Online Registration System. For more
Maintains the group health plan;
information or to apply to become a CPEO, go to
IRS.gov/
Is considered the sponsor of the group health plan and is
CPEO.
subject to the applicable Department of Labor (DOL) COBRA
CPEOs must generally file Form 941-SS and Schedule R
guidance, including providing the COBRA election notices to
(Form 941), Allocation Schedule for Aggregate Form 941
qualified beneficiaries; and
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Instructions for Form 941-SS (Rev. 6-2021)
Would have received the COBRA premium payments
an agency agreement with the third-party payer, the
directly from the assistance eligible individuals were it not for
third-party payer includes the qualified sick leave wages on
the COBRA premium assistance.
the third party's aggregate Form 941-SS, claims the sick
leave credit on behalf of the employer on the aggregate Form
If a third-party payer satisfies the above conditions, the
941-SS, and separately reports the credit allocable to the
third-party payer's clients aren't eligible for the COBRA
employers on Schedule R (Form 941). See section 6 of Pub.
premium assistance credit or an advance payment of the
15-A, Employer's Supplemental Tax Guide, for more
COBRA premium assistance credit. Third-party payers that
information about sick pay reporting.
are considered the person to whom premiums are payable
may, in anticipation of receiving the COBRA premium
If a third-party payer is considered the person to whom
assistance credit, reduce the deposits of federal employment
COBRA premiums are payable, as discussed earlier under
taxes relating to their own employees (that is, those
COVID-19 employment tax credits when return filed by a
employees for whom they are filing as the common-law
third-party
payer, the third party must include the applicable
employer, rather than as a third-party payer) on the day they
credit amount on Schedule R (Form 941), page 1, column o,
become eligible for the credit. If the anticipated credit
line 8, with amounts reported for the third-party payer's
exceeds the available reduction of these deposits, the
employees.
third-party payer may file Form 7200 to request an advance
after the payroll period in which the third-party payer
Work opportunity tax credit for qualified tax-exempt or-
becomes entitled to the credit.
ganizations hiring qualified veterans. Qualified
tax-exempt organizations that hire eligible unemployed
Aggregate Form 941-SS filers. Approved section 3504
veterans may be able to claim the work opportunity tax credit
agents and CPEOs must complete and file Schedule R
against their payroll tax liability using Form 5884-C. For more
(Form 941) when filing an aggregate Form 941-SS.
information, go to IRS.gov/WOTC.
Aggregate Forms 941-SS are filed by agents approved by
the IRS under section 3504. To request approval to act as an
Correcting a previously filed Form 941-SS. If you
agent for an employer, the agent files Form 2678 with the IRS
discover an error on a previously filed Form 941-SS or if you
unless you’re a state or local government agency acting as
otherwise need to amend a previously filed Form 941-SS,
an agent under the special procedures provided in Rev.
make the correction using Form 941-X. Form 941-X is filed
Proc. 2013-39, 2013-52 I.R.B. 830, available at
IRS.gov/irb/
separately from Form 941-SS. For more information, see the
2013-52_IRB#RP-2013-39. Aggregate Forms 941-SS are
Instructions for Form 941-X, section 9 of Pub. 80, or go to
also filed by CPEOs approved by the IRS under section
IRS.gov/CorrectingEmploymentTaxes.
7705. To become a CPEO, the organization must apply
Federal tax deposits must be made by electronic funds
through the IRS Online Registration System at
IRS.gov/
transfer (EFT). You must use EFT to make all federal tax
CPEO. CPEOs file Form 8973, Certified Professional
deposits. Generally, an EFT is made using EFTPS. If you
Employer Organization/Customer Reporting Agreement, to
don't want to use EFTPS, you can arrange for your tax
notify the IRS that they started or ended a service contract
professional, financial institution, payroll service, or other
with a customer. CPEOs must generally file Form 941-SS
trusted third party to make electronic deposits on your behalf.
and Schedule R (Form 941) electronically. For more
Also, you may arrange for your financial institution to initiate a
information about a CPEO’s requirement to file electronically,
same-day wire payment on your behalf. EFTPS is a free
see Rev. Proc. 2017-14, 2017-3 I.R.B. 426, available at
service provided by the Department of the Treasury.
IRS.gov/irb/2017-03_IRB#RP-2017-14.
Services provided by your tax professional, financial
Other third-party payers that file aggregate Forms 941-SS,
institution, payroll service, or other third party may have a
such as non-certified PEOs, must complete and file
fee.
Schedule R (Form 941) if they have clients that are claiming
For more information on making federal tax deposits, see
the qualified small business payroll tax credit for increasing
section 8 of Pub. 80. To get more information about EFTPS
research activities, the credit for qualified sick and family
or to enroll in EFTPS, go to EFTPS.gov, or call one of the
leave wages, the employee retention credit, and/or the
following numbers.
COBRA premium assistance credit.
800-555-4477 (toll free; for use by U.S. Virgin Islands
If both an employer and a section 3504 authorized
only).
agent (or a CPEO or other third-party payer) paid
800-733-4829 (TDD).
TIP
wages to an employee during a quarter, both the
800-244-4829 (Spanish).
employer and the section 3504 authorized agent (or CPEO or
303-967-5916 (toll call).
other third-party payer, if applicable) should file Form 941-SS
Additional information about EFTPS is also available in
reporting the wages each entity paid to the employee during
Pub. 966.
the applicable quarter and issue Forms W-2 reporting the
For an EFTPS deposit to be on time, you must
wages each entity paid to the employee during the year.
submit the deposit by 8 p.m. Eastern time the day
!
If a third-party payer of sick pay is also paying qualified
before the date the deposit is due.
CAUTION
sick leave wages on behalf of an employer, the third party
Same-day wire payment option. If you fail to submit a
would be making the payments as an agent of the employer.
deposit transaction on EFTPS by 8 p.m. Eastern time the day
The employer is required to do the reporting and payment of
before the date a deposit is due, you can still make your
employment taxes with respect to the qualified sick leave
deposit on time by using the Federal Tax Collection Service
wages and claim the credit for the qualified sick leave wages,
(FTCS) to make a same-day wire payment. To use the
unless the employer has an agency agreement with the
same-day wire payment method, you will need to make
third-party payer that requires the third-party payer to do the
arrangements with your financial institution ahead of time.
collecting, reporting, and/or paying or depositing employment
Please check with your financial institution regarding
taxes on the qualified sick leave wages. If the employer has
availability, deadlines, and costs. Your financial institution
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Instructions for Form 941-SS (Rev. 6-2021)