Page 328 - Individual Forms & Instructions Guide

16:05 - 2-Feb-2023
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Fileid: … ons/i941/202303/a/xml/cycle05/source
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
were unable to withhold the employee tax of 6.2%. You until the end of the calendar year. Additional Medicare
will reduce your total taxes by the amount of any Tax is only imposed on the employee. There is no
uncollected employee share of social security and employer share of Additional Medicare Tax. All wages that
Medicare taxes on tips later on line 9; see Current are subject to Medicare tax are subject to Additional
quarter's adjustments for tips and group-term life Medicare Tax withholding if paid in excess of the
insurance, later. Don’t include service charges on line 5b. $200,000 withholding threshold.
For details about the difference between tips and service For more information on what wages are subject to
charges, see Rev. Rul. 2012-18, 2012-26 I.R.B. 1032, Medicare tax, see the chart, Special Rules for Various
available at IRS.gov/irb/2012-26_IRB#RR-2012-18. Types of Services and Payments, in section 15 of Pub. 15.
Your employee must report cash tips to you by the 10th For more information on Additional Medicare Tax, go to
day of the month after the month the tips are received. IRS.gov/ADMTfaqs. See the instructions for line 8 for an
Cash tips include tips paid by cash, check, debit card, and adjustment that you may need to make on Form 941 for
credit card. The report should include charged tips (for sick pay.
example, credit and debit card charges) you paid over to Once wages and tips exceed the $200,000 withholding
the employee for charge customers, tips the employee threshold, include all tips your employees reported during
received directly from customers, and tips received from the quarter, even if you were unable to withhold the
other employees under any tip-sharing arrangement. Both employee tax of 0.9%.
directly and indirectly tipped employees must report tips to
you. No report is required for months when tips are less line 5d (column 1)
than $20. Employees may use Form 4070 (available only x 0.009
in Pub. 1244), or submit a written statement or electronic line 5d (column 2)
tip record.
Don't include allocated tips (described in section 6 of
Pub. 15) on this line. Instead, report them on Form 8027. 5e. Total social security and Medicare taxes. Add the
Allocated tips aren't reportable on Form 941 and aren't column 2 amounts on lines 5a–5d. Enter the result on
subject to withholding of federal income, social security, line 5e.
or Medicare taxes.
5f. Section 3121(q) Notice and Demand—Tax
line 5b (column 1) Due on Unreported Tips
x 0.124 Enter the tax due from your Section 3121(q) Notice and
line 5b (column 2) Demand on line 5f. The IRS issues a Section 3121(q)
Notice and Demand to advise an employer of the amount
of tips received by employees who failed to report or
5c. Taxable Medicare wages & tips. Enter all wages, underreported tips to the employer. An employer isn't
including qualified sick leave wages paid this quarter of liable for the employer share of the social security and
2023 and qualified family leave wages paid this quarter of Medicare taxes on unreported tips until notice and
2023; tips; sick pay; and taxable fringe benefits that are demand for the taxes is made to the employer by the IRS
subject to Medicare tax. Unlike social security wages, in a Section 3121(q) Notice and Demand. The tax due
there is no limit on the amount of wages subject to may have been determined from tips reported to the IRS
Medicare tax. on employees' Forms 4137, Social Security and Medicare
The rate of Medicare tax is 1.45% (0.0145) each for the Tax on Unreported Tip Income, or other tips that weren't
employer and employee or 2.9% (0.029) for both. Include reported to their employer as determined by the IRS
all tips your employees reported during the quarter, even if during an examination. For additional information, see
you were unable to withhold the employee tax of 1.45%. Rev. Rul. 2012-18.

line 5c (column 1) Deposit the tax within the time period required under
x 0.029 your deposit schedule to avoid any possible deposit
line 5c (column 2) penalty. The tax is treated as accumulated by the
employer on the “Date of Notice and Demand” as printed
on the Section 3121(q) Notice and Demand. The
For more information on tips, see section 6 of Pub. 15. employer must include this amount on the appropriate line
See the instructions for line 8 for an adjustment that you of the record of federal tax liability (Part 2 of Form 941 for
may need to make on Form 941 for sick pay. a monthly schedule depositor or Schedule B (Form 941)

5d. Taxable wages & tips subject to Additional Medi- for a semiweekly schedule depositor).
care Tax withholding. Enter all wages, including 6. Total Taxes Before Adjustments
qualified sick leave wages paid this quarter of 2023 and Add the total federal income tax withheld from wages,
qualified family leave wages paid this quarter of 2023; tips, and other compensation (line 3); the total social
tips; sick pay; and taxable fringe benefits that are subject security and Medicare taxes before adjustments (line 5e);
to Additional Medicare Tax withholding. You’re required to and any tax due under a Section 3121(q) Notice and
begin withholding Additional Medicare Tax in the pay Demand (line 5f). Enter the result on line 6.
period in which you pay wages in excess of $200,000 to
an employee and continue to withhold it each pay period

-12- Instructions for Form 941 (Rev. 3-2023)