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Department of the Treasury
Internal Revenue Service
Instructions for Schedule R

(Form 941)

(Rev. March 2023)
Allocation Schedule for Aggregate Form 941 Filers

Section references are to the Internal Revenue Code Who Must File?
unless otherwise noted.
Agents approved by the IRS under section 3504 and
CPEOs must complete Schedule R each time they file an
Future Developments aggregate Form 941. To request approval to act as an
For the latest information about developments related to agent for an employer under section 3504, the agent must
Schedule R and its instructions, such as legislation file Form 2678 with the IRS. Form 2678 must be
enacted after they were published, go to IRS.gov/ previously filed and approved by the IRS before filing
Form941. Schedule R. To become a CPEO, the organization must
apply through the IRS Online Registration System. Go to
the IRS website at IRS.gov/CPEO for more information.
What’s New Other third-party payers that file aggregate Forms 941,
Calendar year “2023” has been prepopulated on the such as non-certified PEOs, must complete and file
March 2023 revision of Schedule R. Don't use the March Schedule R if they have clients that are claiming the
2023 revision of Schedule R for any calendar quarter qualified small business payroll tax credit for increasing
beginning before January 1, 2023. At this time, the IRS research activities or the credit for qualified sick and
expects the March 2023 revision of Schedule R and these family leave wages. Third-party payers other than agents
instructions to also be used for the second, third, and approved by the IRS under section 3504 and CPEOs
fourth quarters of 2023. If changes in law require need to include client-by-client amounts only for those
additional changes to Schedule R, the form and/or these clients claiming one or more of these credits. Amounts for
instructions may be revised. Prior revisions of Schedule R clients not claiming any of these credits are included on
are available at IRS.gov/Form941 (select the link for "All Schedule R, page 1, line 8.
Form 941 Revisions" under "Other Items You May Find Generally, the common-law employer of the individuals
Useful"). Don't use an earlier revision of Schedule R for that are paid qualified sick or family leave wages is
any calendar quarter beginning after December 31, 2022. entitled to the credit for qualified sick and family leave
See the Instructions for Form 941 for information wages regardless of whether they use a third-party payer.
TIP on which employers may be eligible to claim the The third-party payer isn't entitled to the credit with
credit for qualified sick and family leave wages respect to the wages and taxes it remits on behalf of
paid in 2023. clients (regardless of whether the third party is considered
an "employer" for other purposes).

When Must You File?
General Instructions
If you’re an aggregate Form 941 filer, file Schedule R with
Purpose of Schedule R your aggregate Form 941 every quarter. Agents and
Use Schedule R to allocate certain aggregate information non-certified PEOs may file Form 941 and Schedule R
reported on Form 941 to each client. For purposes of electronically or by paper submission. CPEOs must
Schedule R, the term “client” means (a) an “employer or generally file Form 941 and Schedule R electronically. For
payer” identified on Form 2678, Employer/Payer more information about a CPEO's requirement to file
Appointment of Agent; (b) a customer who enters into a electronically, see Rev. Proc. 2017-14, 2017-3 I.R.B. 426,
contract that meets the requirements under section available at IRS.gov/irb/2017-03_IRB#RP-2017-14.
7705(e)(2); (c) a client who enters into a service
agreement described under Regulations section Specific Instructions
31.3504-2(b)(2) with a certified professional employer
organization (CPEO); (d) a client who enters into a service Completing Schedule R
agreement described under Regulations section
31.3504-2(b)(2) with a non-certified professional employer Enter Your Business Information
organization (PEO); or (e) a third party paying qualified Carefully enter your employer identification number (EIN)
sick leave wages as an agent for the employer under and the name of your business at the top of the schedule.
Regulations section 32.1(e)(3). If you have more than five Make sure they exactly match the EIN and name shown
clients, complete as many Continuation Sheets as on the attached Form 941. Check one of the "Type of filer"
necessary. Attach Schedule R, including any Continuation boxes to tell us if you're a section 3504 agent, a CPEO, or
Sheets, to your aggregate Form 941. any other type of third party (for example, a non-certified
PEO).

Nov 29, 2022 Cat. No. 53729E

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Calendar Year This amount includes Additional Medicare Tax
Calendar year “2023” has been prepopulated on the withholding.
March 2023 revision of Schedule R. Column j. Section 3121(q) Notice and Demand—Tax
due on unreported tips allocated to the listed client EIN
Check the Box for the Quarter from Form 941, line 5f.
Check the appropriate box of the quarter for which you're
Column k. Qualified small business payroll tax credit for
filing Schedule R. Make sure the quarter checked on the
increasing research activities allocated to the listed client
top of the Schedule R matches the quarter checked on the
EIN from Form 941, line 11a. You must attach a separate
attached Form 941.
Form 8974 for each client claiming this credit.
Client and Employee Information Column l. Nonrefundable portion of the credit for
On Schedule R, including any Continuation Sheets, you qualified sick and family leave wages paid this quarter of
must report the following for each client. 2023 for leave taken after March 31, 2020, and before
April 1, 2021, allocated to the listed client EIN from Form
Note. When entering amounts over 999.99 on 941, line 11b.
Schedule R, don't enter commas.
Column m. Nonrefundable portion of the credit for
Column a. The client’s EIN. qualified sick and family leave wages paid this quarter of
Column b (CPEO Use Only). Enter a code to report the 2023 for leave taken after March 31, 2021, and before
type of wages, tips, and other compensation paid to the October 1, 2021, allocated to the listed client EIN from
individual(s) performing services for the client. If you paid Form 941, line 11d.
more than one type of wages, tips, or other compensation, Column n. Total taxes after adjustments and
you must use more than one line to report for that client nonrefundable credits allocated to the listed client EIN
and enter the applicable code for each line. The following from Form 941, line 12.
four codes are the only entries that can be made in
Column o. Total deposits for this quarter, including
column b.
overpayment applied from a prior quarter and
• A: Wages, tips, and other compensation paid under
overpayments applied from Form 941-X, 941-X (PR),
section 3511(a).
944-X, or 944-X (SP) filed in the current quarter allocated
• B: Wages, tips, and other compensation paid under
to the listed client EIN from Form 941, line 13a. Include
section 3511(c).
any payment made with the return allocated to the listed
• C: Wages, tips, and other compensation not reported
client EIN.
under code A or code B paid as a payor under a service
agreement described in Regulations section 31.3504-2(b) Column p. Refundable portion of the credit for qualified
(2). sick and family leave wages paid this quarter of 2023 for
• D: Wages, tips, and other compensation paid as an leave taken after March 31, 2020, and before April 1,
agent under Regulations section 31.3504-1. 2021, allocated to the listed client EIN from Form 941,
line 13c.
Column c. Number of employees who received wages,
tips, or other compensation for the pay period for the listed Column q. Refundable portion of the credit for qualified
client EIN from Form 941, line 1. sick and family leave wages paid this quarter of 2023 for
leave taken after March 31, 2021, and before October 1,
Column d. Wages, tips, and other compensation
2021, allocated to the listed client EIN from Form 941,
allocated to the listed client EIN from Form 941, line 2.
line 13e.
Column e. Total federal income tax withheld from wages,
Column r. Qualified health plan expenses allocable to
tips, and other compensation allocated to the listed client
qualified sick leave wages paid this quarter of 2023 for
EIN from Form 941, line 3.
leave taken after March 31, 2020, and before April 1,
Column f. Total qualified sick leave wages and qualified 2021, allocated to the listed client EIN from Form 941,
family leave wages paid this quarter of 2023 for leave line 19.
taken after March 31, 2020, and before April 1, 2021,
Column s. Qualified health plan expenses allocable to
allocated to the listed client EIN from Form 941, lines 5a(i)
qualified family leave wages paid this quarter of 2023 for
and 5a(ii), column 1.
leave taken after March 31, 2020, and before April 1,
Column g. Total social security tax allocable to taxable 2021, allocated to the listed client EIN from Form 941,
social security wages (which includes qualified sick and line 20.
family leave wages paid this quarter of 2023 for leave
Column t. Qualified sick leave wages paid this quarter of
taken after March 31, 2021, and before October 1, 2021)
2023 for leave taken after March 31, 2021, and before
and taxable social security tips allocated to the listed
October 1, 2021, allocated to the listed client EIN from
client EIN from Form 941, lines 5a and 5b, column 2.
Form 941, line 23.
Column h. Medicare tax allocated to the listed client EIN
Column u. Qualified health plan expenses allocable to
from Form 941, line 5c, column 2.
qualified sick leave wages paid this quarter of 2023 for
Column i. Total social security and Medicare taxes leave taken after March 31, 2021, and before October 1,
allocated to the listed client EIN from Form 941, line 5e. 2021, allocated to the listed client EIN from Form 941,
line 24.

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Column v. Amounts under certain collectively bargained Line 7. Enter the combined subtotal from line 9 of all
agreements allocable to qualified sick leave wages paid Continuation Sheets for Schedule R for column c through
this quarter of 2023 for leave taken after March 31, 2021, column y.
and before October 1, 2021, allocated to the listed client
Line 8. Enter Form 941 amounts for your employees for
EIN from Form 941, line 25.
column c through column y. Non-certified PEOs and
Column w. Qualified family leave wages paid this quarter third-party payers of sick pay as agents for the employer
of 2023 for leave taken after March 31, 2021, and before must consolidate and include on line 8 any amounts for
October 1, 2021, allocated to the listed client EIN from clients that aren't reported individually on Schedule R.
Form 941, line 26.
Line 9. Enter the totals of lines 6, 7, and 8 for column c
Column x. Qualified health plan expenses allocable to through column y. The totals on line 9 must match the
qualified family leave wages paid this quarter of 2023 for totals on the aggregate Form 941. If the totals don't
leave taken after March 31, 2021, and before October 1, match, there is an error that must be corrected before
2021, allocated to the listed client EIN from Form 941, filing Form 941 and Schedule R.
line 27.
Continuation Sheet for Schedule R (Form 941)
Column y. Amounts under certain collectively bargained
agreements allocable to qualified family leave wages paid Columns a through y. See the instructions under
this quarter of 2023 for leave taken after March 31, 2021, Completing Schedule R, earlier.
and before October 1, 2021, allocated to the listed client Line 9. Enter subtotals for clients from lines 1 through 8
EIN from Form 941, line 28. for column c through column y.
Line 6. Enter the subtotals for clients for column c
through column y.

Paperwork Reduction Act Notice

We ask for the information on Schedule R to carry out the Recordkeeping. . . . . . . . . . . . . . . . . . . . . 20 hr., 5 min.
Internal Revenue laws of the United States. You’re Learning about the law or the form . . . . . . . 18 min.
required to give us this information. We need it to ensure Preparing and sending the form to the IRS. . 38 min.
that you’re complying with these laws and to allow us to
figure and collect the right amount of tax.
You’re not required to provide the information If you have comments concerning the accuracy of
requested on a form that is subject to the Paperwork these time estimates or suggestions for making
Reduction Act unless the form displays a valid OMB Schedule R simpler, we would be happy to hear from you.
control number. Books or records relating to a form or its You can send us comments from IRS.gov/
instructions must be retained as long as their contents FormComments. Or you can send your comments to
may become material in the administration of any Internal Internal Revenue Service, Tax Forms and Publications
Revenue law. Generally, tax returns and return Division, 1111 Constitution Ave. NW, IR-6526,
information are confidential, as required by Code section Washington, DC 20224. Don't send Schedule R to this
6103. address. Instead, see Where Should You File? in the
The time needed to complete and file Schedule R will Instructions for Form 941.
vary depending on individual circumstances. The
estimated average time is:

Instructions for Schedule R (Form 941) (Rev. 3-2023) -3-

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