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                                                                                       Department of the Treasury
                                                                                       Internal Revenue Service
Instructions for Schedule R 

(Form 941)

(Rev. March 2024)
Allocation Schedule for Aggregate Form 941 Filers

Section references are to the Internal Revenue Code         7705(e)(2); (c) a client who enters into a service 
unless otherwise noted.                                     agreement described under Regulations section 
                                                            31.3504-2(b)(2) with a certified professional employer 
Future Developments                                         organization (CPEO); (d) a client who enters into a service 
                                                            agreement described under Regulations section 
For the latest information about developments related to    31.3504-2(b)(2) with a non-certified professional employer 
Schedule R and its instructions, such as legislation        organization (PEO); or (e) a third party paying qualified 
enacted after they were published, go to IRS.gov/           sick leave wages as an agent for the employer under 
Form941.                                                    Regulations section 32.1(e)(3). If you have more than five 
                                                            clients, complete as many Continuation Sheets as 
What’s New                                                  necessary. Attach Schedule R, including any Continuation 
                                                            Sheets, to your aggregate Form 941.
The format of the March 2024 revision of Schedule R has 
reverted back to the format previously used on the March    Who Must File?
2022 revision of Schedule R, in which columns m, s, t, and  Agents approved by the IRS under section 3504 and 
v were "Reserved for future use." The calendar year field   CPEOs must complete Schedule R each time they file an 
on Schedule R is no longer prepopulated. In most cases,     aggregate Form 941. To request approval to act as an 
the March 2024 revision of Schedule R should only be        agent for an employer under section 3504, the agent must 
used for quarters beginning after December 31, 2023.        file Form 2678 with the IRS. Form 2678 must be previously 
However, in some rare instances (for example, you have a    filed and approved by the IRS before filing Schedule R. To 
client that is eligible to take the COBRA premium           become a CPEO, the organization must apply through the 
assistance credit after the first quarter of 2022), you may IRS Online Registration System. Go to the IRS website at 
need to file the March 2024 revision of Schedule R with a   IRS.gov/CPEO for more information. Other third-party 
Form 941-X, Adjusted Employer's QUARTERLY Federal           payers that file aggregate Forms 941, such as 
Tax Return or Claim for Refund, for a quarter that began    non-certified PEOs, must complete and file Schedule R if 
before January 1, 2024.                                     they have clients that are claiming the qualified small 
The March 2024 revision of Schedule R includes a new        business payroll tax credit for increasing research 
checkbox to tell us if the Schedule R is attached to Form   activities. Third-party payers other than agents approved 
941 or 941-X. Columns f, l, n, o, p, u, w, x, and y are now by the IRS under section 3504 and CPEOs need to 
used only when Schedule R is attached to Form 941-X.        include client-by-client amounts only for those clients 
                                                            claiming the qualified small business payroll tax credit for 
At this time, the IRS expects the March 2024 revision of    increasing research activities. Amounts for clients not 
Schedule R and these instructions to also be used for the   claiming the qualified small business payroll tax credit for 
second, third, and fourth quarters of 2024, and possibly    increasing research activities are included on Schedule R, 
longer. If changes in law require additional changes to     page 1, line 8. Schedule R must also be completed if any 
Schedule R, the form and/or these instructions may be       clients are claiming credits on Form 941-X.
revised. You may need a prior revision of Schedule R 
when filing a Form 941-X (for example, to claim or correct  When Must You File?
the employee retention credit). Prior revisions of          If you’re an aggregate Form 941 filer, file Schedule R with 
Schedule R are available at IRS.gov/Form941 (select the     your aggregate Form 941 every quarter. Agents and 
link for "All Form 941 Revisions" under "Other Items You    non-certified PEOs may file Form 941 and Schedule R 
May Find Useful"). Don't use an earlier revision of         electronically or by paper submission. CPEOs must 
Schedule R for any calendar quarter beginning after         generally file Form 941 and Schedule R electronically. For 
December 31, 2023.                                          more information about a CPEO's requirement to file 
                                                            electronically, see Rev. Proc. 2023-18, 2023-13 I.R.B. 
                                                            605, available at IRS.gov/irb/2023-13_IRB#REV-
General Instructions
                                                            PROC-2023-18.
Purpose of Schedule R                                               Beginning sometime in 2024, the IRS expects to 
Use Schedule R to allocate certain aggregate information    TIP     make filing Form 941-X available as part of 
reported on Form 941 or 941-X to each client. For                   Modernized e-File (MeF). Monitor IRS.gov for 
purposes of Schedule R, the term “client” means (a) an      more information on availability.
“employer or payer” identified on Form 2678, Employer/
Payer Appointment of Agent; (b) a customer who enters 
into a contract that meets the requirements under section 

Jan 10, 2024                                         Cat. No. 53729E

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                                                              Column e. Total federal income tax withheld from wages, 
Specific Instructions                                         tips, and other compensation allocated to the listed client 
                                                              EIN from Form 941, line 3 (Form 941-X, line 7, column 1).
Completing Schedule R
                                                              Column f. Total qualified sick leave wages and qualified 
Enter Your Business Information                               family leave wages paid during the quarter selected on 
Carefully enter your employer identification number (EIN)     Schedule R for leave taken after March 31, 2020, and 
and the name of your business at the top of the schedule.     before April 1, 2021, allocated to the listed client EIN from 
Make sure they exactly match the EIN and name shown           Form 941-X, lines 9 and 10, column 1.
on the attached Form 941 or 941-X. Check one of the           Column g. Total social security tax allocable to taxable 
"Type of filer" boxes to tell us if you're a section 3504     social security wages and taxable social security tips 
agent, a CPEO, or any other type of third party (for          allocated to the listed client EIN from Form 941, lines 5a 
example, a non-certified PEO).                                and 5b, column 2 (Form 941-X, lines 8 and 11, column 1, 
                                                              multiplied by the applicable tax rate).
Calendar Year
                                                              Column h. Medicare tax allocated to the listed client EIN 
Enter the calendar year of the Form 941 or 941-X to which 
                                                              from Form 941, line 5c, column 2 (Form 941-X, line 12, 
you attached Schedule R.
                                                              column 1, multiplied by the applicable tax rate).
Check the Box for the Quarter                                 Column i. Total social security and Medicare taxes 
Check the appropriate box of the quarter for which you're     allocated to the listed client EIN from Form 941, line 5e 
filing Schedule R. Make sure the quarter checked on the       (no Form 941-X equivalent line). This amount includes 
top of the Schedule R matches the quarter checked on the      Additional Medicare Tax withholding.
attached Form 941 or 941-X.                                   Column j. Section 3121(q) Notice and Demand—Tax 
                                                              due on unreported tips allocated to the listed client EIN 
Form Checkbox
                                                              from Form 941, line 5f (Form 941-X, line 14, column 1).
Check a box to tell us if Schedule R is attached to Form 
941 or 941-X.                                                 Column k. Qualified small business payroll tax credit for 
                                                              increasing research activities allocated to the listed client 
Client and Employee Information                               EIN from Form 941, line 11 (Form 941-X, line 16, column 
On Schedule R, including any Continuation Sheets, you         1). You must attach a separate Form 8974 for each client 
must report the following for each client.                    claiming this credit.
                                                              Column l. Nonrefundable and refundable portions of the 
Note. When entering amounts over 999.99 on                    credit for qualified sick and family leave wages paid during 
Schedule R, don't enter commas.                               the quarter selected on Schedule R for leave taken after 
Column a. The client’s EIN.                                   March 31, 2020, and before April 1, 2021, allocated to the 
                                                              listed client EIN from Form 941-X, lines 17 and 25, column 
Column b (CPEO Use Only).      Enter a code to report the     1.
type of wages, tips, and other compensation paid to the 
individual(s) performing services for the client. If you paid Column n. Nonrefundable and refundable portions of the 
more than one type of wages, tips, or other compensation,     credit for qualified sick and family leave wages paid during 
you must use more than one line to report for that client     the quarter selected on Schedule R for leave taken after 
and enter the applicable code for each line. The following    March 31, 2021, and before October 1, 2021, allocated to 
four codes are the only entries that can be made in           the listed client EIN from Form 941-X, lines 18b and 26b, 
column b.                                                     column 1.
• A: Wages, tips, and other compensation paid under           Column o. Nonrefundable and refundable portions of 
section 3511(a).                                              COBRA premium assistance credit paid during the 
• B: Wages, tips, and other compensation paid under           quarter selected on Schedule R allocated to the listed 
section 3511(c).                                              client EIN from Form 941-X, lines 18c and 26c, column 1.
• C: Wages, tips, and other compensation not reported 
under code A or code B paid as a payor under a service        Column p. Number of individuals provided COBRA 
agreement described in Regulations section 31.3504-2(b)       premium assistance during the quarter selected on 
(2).                                                          Schedule R allocated to the listed client EIN from Form 
• D: Wages, tips, and other compensation paid as an           941-X, line 18d, column 1.
agent under Regulations section 31.3504-1.                    Column q. Total taxes after adjustments and 
Column c. Number of employees who received wages,             nonrefundable credits allocated to the listed client EIN 
tips, or other compensation for the pay period for the listed from Form 941, line 12 (no Form 941-X equivalent line).
client EIN from Form 941, line 1 (no Form 941-X               Column r. Total deposits for this quarter, including 
equivalent line).                                             overpayment applied from a prior quarter and 
Column d. Wages, tips, and other compensation                 overpayments applied from Form 941-X, 941-X (PR), or 
allocated to the listed client EIN from Form 941, line 2      944-X, filed in the current quarter allocated to the listed 
(Form 941-X, line 6, column 1).                               client EIN from Form 941, line 13 (no Form 941-X 
                                                              equivalent line). Include any payment made with the return 
                                                              allocated to the listed client EIN.

2                                                                 Instructions for Schedule R (Form 941) (Rev. 3-2024)

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Column u. Total qualified health plan expenses allocable     Line 7. Enter the combined subtotal from line 9 of all 
to qualified sick and family leave wages paid during the     Continuation Sheets for Schedule R for column c through 
quarter selected on Schedule R for leave taken after         column l, column n through column r, column u, and 
March 31, 2020, and before April 1, 2021, allocated to the   column w through column y.
listed client EIN from Form 941-X, lines 28 and 29, column 
                                                             Line 8. Enter Form 941 amounts for your employees for 
1.
                                                             column c through column l, column n through column r, 
Column w. Total amount of qualified sick leave wages         column u, and column w through column y. Non-certified 
and amounts under certain collectively bargained             PEOs and third-party payers of sick pay as agents for the 
agreements allocable to qualified sick leave wages paid      employer must consolidate and include on line 8 any 
during the quarter selected on Schedule R for leave taken    amounts for clients that aren't reported individually on 
after March 31, 2021, and before October 1, 2021,            Schedule R.
allocated to the listed client EIN from Form 941-X, lines 35 
                                                             Line 9. Enter the totals of lines 6, 7, and 8 for column c 
and 37, column 1.
                                                             through column l, column n through column r, column u, 
Column x. Total amount of qualified health plan              and column w through column y. The totals on line 9 must 
expenses allocable to qualified sick and family leave        match the totals on the aggregate Form 941. If the totals 
wages during the quarter selected on Schedule R for          don't match, there is an error that must be corrected 
leave taken after March 31, 2021, and before October 1,      before filing Form 941 and Schedule R.
2021, allocated to the listed client EIN from Form 941-X, 
lines 36 and 39, column 1.                                   Continuation Sheet for Schedule R (Form 941)
Column y. Total amount of qualified family leave wages       Columns a through y. See the instructions under 
and amounts under certain collectively bargained             Completing Schedule R, earlier.
agreements allocable to qualified family leave wages paid    Line 9. Enter the subtotals for clients from lines 1 through 
during the quarter selected on Schedule R for leave taken    8 for column c through column l, column n through column 
after March 31, 2021, and before October 1, 2021,            r, column u, and column w through column y.
allocated to the listed client EIN from Form 941-X, lines 38 
and 40, column 1.
Line 6. Enter the subtotals for clients for column c 
through column l, column n through column r, column u, 
and column w through column y.

Paperwork Reduction Act Notice
We ask for the information on Schedule R to carry out the    material in the administration of any Internal Revenue law. 
Internal Revenue laws of the United States. You’re           Generally, tax returns and return information are 
required to give us this information. We need it to ensure   confidential, as required by Code section 6103.
that you’re complying with these laws and to allow us to     The time needed to complete and file Schedule R will 
figure and collect the right amount of tax.                  vary depending on individual circumstances. The 
  You’re not required to provide the information requested   estimated burden for filing Schedule R is approved under 
on a form that is subject to the Paperwork Reduction Act     OMB control number 1545-0029 and is included in the 
unless the form displays a valid OMB control number.         estimates shown in the Instructions for Form 941.
Books or records relating to a form or its instructions must 
be retained as long as their contents may become 

Instructions for Schedule R (Form 941) (Rev. 3-2024)                                                                     3