Form 941: Do I Need to File If I Had No Employees This Quarter?

• Learn about Form 941 and who has to submit it.
• Find out what information you'll need to fill out the form.
• Learn about the penalties for not submitting or not submitting on time.

As an employer, Fiducial knows you have plenty of obligations when it comes to filing taxes. Among these is the need to file IRS Form 941, the Employer’s Quarterly Federal Tax Return. This form must be filed on the last day of each month following the end of a quarter. Sticking to these deadlines — April 30, July 31, Oct. 31 and Jan. 31 — is essential for remaining in compliance and avoiding an inquiry from the Internal Revenue Service. And let's be clear: No one wants an inquiry from the IRS.

What is Form 941 and Who Has to Submit It?

Form 941 is a summary of the total taxes withheld during the previous quarter by anybody —business or individual — that compensates an employee or employees.

If you are an employer who pays wages to household employees or agricultural employees, you are exempt from this rule. Those who employ seasonal workers who don’t get paid during one or more quarters of the year are exempt as well.

All other employers are required to submit the Form 941, even if you don't pay employees during a given quarter. This is a common misconception that is important to be aware of in order to remain compliant.

What the Form Contains

Form 941 requires a significant amount of information that you'll need to gather. Information required includes how many employees a business pays, total wages paid for the quarter, and the total withholding of taxes for the quarter.

Form 941 must be filled out accurately. So, it’s necessary to gather all payroll records and other documentation for the quarter. Don't forget to include reports of any taxable tips your employees indicated that they received. Once calculated, the employer must send in the form, the appropriate withholding and federal income tax, and 1.45 percent of all taxable wages for the Medicare tax payment. Social Security payments of 6.2 percent of each employee’s wages must also be submitted (up to $132,900 for tax year 2019). For those employees paid more than $200,000 per year, employers are also required to withhold the Additional Medicare Tax.

Penalties for Failure to File

The Form 941 must be submitted four times per year by the above-referenced dates. Employers who fail to do so face significant penalties of a percentage of whatever tax had been due for each month or portion of a month that is delayed. As you may imagine, this penalty can add up quickly. According to IRS Publication 15 (2020), these are the penalty rates for amounts not properly or timely deposited:

• 2% – Deposits made 1 to 5 days late.
• 5% – Deposits made 6 to 15 days late.
• 10% – Deposits made 16 or more days late, but before 10 days from the date of the first notice the IRS sent asking for the tax due.
• 10% – Amounts that should have been deposited, but instead were paid directly to the IRS, or paid with your tax return. (See “Payment with return” within Pub. 15 for an exception.)
• 15% – Amounts still unpaid more than 10 days after the date of the first notice the IRS sent asking for the tax due or the day on which you received notice and demand for immediate payment, whichever is earlier.

Balancing Out the Year

At tax time, businesses need to reconcile the amount reported on the four Form 941s they submitted with the employee wages reported on the W-2 forms provided to employees. Once this happens, employees can fill out their own tax returns. The total of the Form 941s should be the same as the total on the W-2s. This total should also match the total on the Form W-3 that employers file with the IRS.

Have questions? Call Fiducial at 1-866-FIDUCIAL or make an appointment at one of our office locations regarding your Form 941 requirements. Ready to book an appointment now? Click here. Know someone who might need our services? We love referrals!