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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.

                                                              -2- Instructions for Schedule R (Form 941) (Rev. 3-2023)



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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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