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Department of the Treasury
Internal Revenue Service
Instructions for Schedule B

(Form 941)

(Rev. March 2024)
Report of Tax Liability for Semiweekly Schedule Depositors

Section references are to the Internal Revenue Code quarter. Any remaining credit, after reducing the employer
unless otherwise noted. share of social security tax and the employer share of
Medicare tax, is then carried forward to the next quarter.
Future Developments Form 8974 is used to determine the amount of the credit
that can be used in the current quarter. For more
For the latest information about developments related to information about the payroll tax credit, see IRS.gov/
Schedule B and its instructions, such as legislation ResearchPayrollTC. Also see Adjusting tax liability for the
enacted after they were published, go to IRS.gov/ qualified small business payroll tax credit for increasing
Form941. research activities (Form 941, line 11), later.
Reporting prior period adjustments. Prior period
What’s New adjustments are reported on Form 941-X, Adjusted
Employer's QUARTERLY Federal Tax Return or Claim for
The COVID-19 related credit for qualified sick and Refund, or Form 944-X, Adjusted Employer's ANNUAL
family leave wages is limited to leave taken after Federal Tax Return or Claim for Refund, and aren’t taken
March 31, 2020, and before October 1, 2021, and may into account when figuring the tax liability for the current
no longer be claimed on Form 941. Effective for tax quarter.
periods beginning after December 31, 2023, the lines
used to claim the credit for qualified sick and family leave When you file Schedule B with your Form 941, don’t
wages have been removed from Form 941 because it change your current quarter tax liability by adjustments
would be extremely rare for an employer to pay wages in reported on any Form 941-X or 944-X.
2024 for qualified sick and family leave taken after March Amended Schedule B. If you have been assessed a
31, 2020, and before October 1, 2021. Therefore, the failure-to-deposit (FTD) penalty, you may be able to file an
instructions on adjusting your tax liability for the amended Schedule B. See Correcting Previously
nonrefundable portion of this credit have been removed Reported Tax Liability, later.
from these instructions. See the Instructions for Form 941
if you're eligible to claim the credit for qualified sick and
family leave wages because you paid the wages in 2024 General Instructions
for an earlier applicable leave period.
Purpose of Schedule B
Reminders These instructions tell you about Schedule B. To
determine if you’re a semiweekly schedule depositor, see
Qualified small business payroll tax credit for in- section 11 of Pub. 15, Employer's Tax Guide.
creasing research activities. For tax years beginning
before January 1, 2023, a qualified small business may Federal law requires you, as an employer, to withhold
elect to claim up to $250,000 of its credit for increasing certain taxes from your employees’ pay. Each time you
research activities as a payroll tax credit. The Inflation pay wages, you must withhold—or take out of your
Reduction Act of 2022 (the IRA) increases the election employees’ pay—certain amounts for federal income tax,
amount to $500,000 for tax years beginning after social security tax, and Medicare tax. You must also
December 31, 2022. The payroll tax credit election must withhold Additional Medicare Tax from wages you pay to
be made on or before the due date of the originally filed an employee in excess of $200,000 in a calendar year.
income tax return (including extensions). The portion of Under the withholding system, taxes withheld from your
the credit used against payroll taxes is allowed in the first employees are credited to your employees in payment of
calendar quarter beginning after the date that the qualified their tax liabilities.
small business filed its income tax return. The election Federal law also requires employers to pay any liability
and determination of the credit amount that will be used for the employer share of social security and Medicare
against the employer’s payroll taxes are made on Form taxes. This share of social security and Medicare taxes
6765, Credit for Increasing Research Activities. The isn’t withheld from employees.
amount from Form 6765, line 44, must then be reported
On Schedule B, list your tax liability for each day. Your
on Form 8974, Qualified Small Business Payroll Tax Credit
tax liability is based on the dates wages were paid. Your
for Increasing Research Activities.
liability includes:
Starting in the first quarter of 2023, the payroll tax credit • The federal income tax you withheld from your
is first used to reduce the employer share of social employees' pay, and
security tax up to $250,000 per quarter and any remaining • Both the employer and employee share of social
credit reduces the employer share of Medicare tax for the security and Medicare taxes.

Jan 10, 2024 Cat. No. 38683X

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Don’t use Schedule B to show federal tax deposits. The Enter Your Tax Liability by Month
IRS gets deposit data from electronic funds transfers. Schedule B is divided into the 3 months that make up a
The IRS uses Schedule B to determine if you’ve quarter of a year. Each month has 31 numbered spaces
that correspond to the dates of a typical month. Enter your
! deposited your federal employment tax liabilities
CAUTION on time. If you're a semiweekly schedule depositor tax liabilities in the spaces that correspond to the dates
and you don’t properly complete and file your Schedule B you paid wages to your employees, not the date payroll
with Form 941, the IRS may propose an “averaged” FTD liabilities were accrued or deposits were made.
penalty. See Deposit Penalties in section 11 of Pub. 15. For example, if your payroll period ended on December
31, 2023, and you paid the wages for that period on
Who Must File? January 6, 2024, you would:
• Go to Month 1 (because January is the first month of
File Schedule B if you’re a semiweekly schedule the quarter), and
depositor. You’re a semiweekly schedule depositor if you • Enter your tax liability on line 6 (because line 6
reported more than $50,000 of employment taxes in the represents the sixth day of the month).
lookback period or accumulated a tax liability of $100,000
or more on any given day in the current or prior calendar Make sure you have checked the appropriate box
year. If you became a semiweekly schedule depositor TIP in Part 2 of Form 941 to show that you’re a
during the quarter, you must complete Schedule B for the semiweekly schedule depositor.
entire quarter. See section 11 of Pub. 15. The $100,000 Example 1. Cedar Co. is a semiweekly schedule
tax liability threshold requiring a next-day deposit is depositor that pays wages for each month on the last day
determined before you consider any reduction of your of the month. On December 24, 2024, Cedar Co. also
liability for nonrefundable credits. paid its employees year-end bonuses (subject to
Don’t complete Schedule B if you have a tax employment taxes). Cedar Co. must report employment
tax liabilities on Schedule B for the fourth quarter
CAUTION $2,500 during the quarter.
! liability on Form 941, line 12, that is less than (October, November, December) as follows.

When Must You File? Month Lines for dates wages were paid
1 (October) line 31 (payday, last day of the month)
Schedule B is filed with Form 941. Therefore, the due date 2 (November) line 30 (payday, last day of the month)
of Schedule B is the same as the due date for the 3 (December) line 24 (bonus paid December 24, 2024)
applicable Form 941. In some situations, Schedule B may 3 (December) line 31 (payday, last day of the month)
be filed with Form 941-X. See Form 941-X, later, for
details.
Example 2. Fir Co. is a semiweekly schedule depositor
Don’t file Schedule B as an attachment to Form 944, that pays employees every other Friday. Fir Co.
Employer's ANNUAL Federal Tax Return. Instead, if you’re accumulated a $20,000 employment tax liability on each
a semiweekly schedule depositor that is required to file a of these pay dates: January 5, 2024; January 19, 2024;
report of tax liability with Form 944, use Form 945-A, February 2, 2024; February 16, 2024; March 1, 2024;
Annual Record of Federal Tax Liability. March 15, 2024; and March 29, 2024. Fir Co. must report
employment tax liabilities on Schedule B as follows.
Specific Instructions
Month Lines for dates wages were paid
Completing Schedule B 1 (January) lines 5 and 19
2 (February) lines 2 and 16
Enter Your Business Information 3 (March) lines 1, 15, and 29
Carefully enter your employer identification number (EIN)
and name at the top of the schedule. Make sure that they
exactly match the name of your business and the EIN that Example 3. Elm Co. is a new business and monthly
the IRS assigned to your business and also agree with the schedule depositor for 2024. Elm Co. paid wages every
name and EIN shown on the attached Form 941 or 941-X. Friday and accumulated a $2,000 employment tax liability
on January 19, 2024. On January 26, 2024, and on every
Calendar Year subsequent Friday during 2024, Elm Co. accumulated a
$110,000 employment tax liability. Under the deposit
Enter the calendar year that applies to the quarter
rules, employers become semiweekly schedule
checked.
depositors on the day after any day they accumulate
Check the Box for the Quarter $100,000 or more of employment tax liability in a deposit
period. Elm Co. became a semiweekly schedule depositor
Under Report for this Quarter at the top of Schedule B,
on January 27, 2024, because Elm Co. had a total
check the appropriate box of the quarter for which you’re
accumulated employment tax liability of $112,000 on
filing this schedule. Make sure the quarter checked on the
January 26, 2024. For more information, see section 11 of
top of the Schedule B matches the quarter checked on
Pub. 15.
your Form 941 or 941-X.
Elm Co. must complete Schedule B as shown next and
file it with Form 941. Elm Co. won’t check the second box

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

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on Form 941, line 16, even though Elm Co. was a monthly the succeeding quarter and allowed as a payroll tax credit
schedule depositor until January 27, 2024. Instead, Elm for the succeeding quarter. The payroll tax credit may not
Co. must check the third box on Form 941, line 16. be taken as a credit against income tax withholding, the
employee share of social security tax, or the employee
Month Lines for dates wages were paid Amount to report share of Medicare tax. Also, the remaining payroll tax
1 (January) line 19 $2,000 credit may not be carried back and taken as a credit
1 (January) line 26 $110,000 against wages paid from preceding quarters. For more
2 (February) lines 2, 9, 16, and 23 $110,000 information about the payroll tax credit, go to IRS.gov/
3 (March) lines 1, 8, 15, 22, and 29 $110,000 ResearchPayrollTC.
Example. Rose Co. is an employer with a calendar tax
year that filed its timely 2023 income tax return on April
Total Liability for the Quarter 15, 2024. Rose Co. elected to take the qualified small
business payroll tax credit for increasing research
To find your total liability for the quarter, add your monthly activities on Form 6765. The third quarter of 2024 is the
tax liabilities. first quarter that begins after Rose Co. filed the income tax
return making the payroll tax credit election. Therefore, the
Tax Liability for Month 1 payroll tax credit applies against Rose Co.'s share of
+ Tax Liability for Month 2 social security tax (up to $250,000) and Medicare tax on
+ Tax Liability for Month 3 wages paid to employees in the third quarter of 2024.
Total Liability for the Quarter Rose Co. is a semiweekly schedule depositor. Rose Co.
completes Schedule B by reducing the amount of liability
entered for the first payroll payment in the third quarter of
Your total liability for the quarter must equal line 12 2024 that includes wages subject to social security tax by
! on Form 941. the lesser of (1) its share of social security tax (up to
CAUTION $250,000) on the wages, or (2) the available payroll tax
Adjusting tax liability for the qualified small business credit. If the payroll tax credit elected is more than Rose
payroll tax credit for increasing research activities Co.'s share of social security tax on the first payroll
(Form 941, line 11). Semiweekly schedule depositors payment of the quarter, the excess payroll tax credit would
must account for the qualified small business payroll tax be carried forward to succeeding payroll payments in the
credit for increasing research activities claimed on Form third quarter until it is used against up to $250,000 of Rose
941, line 11, when reporting their tax liabilities on Co.'s share of social security tax for the quarter. If the
Schedule B. The total tax liability for the quarter must amount of the payroll tax credit exceeds Rose Co.'s share
equal the amount reported on Form 941, line 12. Failure to of social security tax (up to $250,000) on wages paid to its
account for the qualified small business payroll tax credit employees in the third quarter, any remaining credit is
for increasing research activities on Schedule B may used against Rose Co.'s share of Medicare tax on the first
cause Schedule B to report more than the total tax liability payroll payment of the quarter and then the excess payroll
reported on Form 941, line 12. Don't reduce your daily tax tax credit would be carried forward to succeeding payroll
liability reported on Schedule B below zero. payments in the third quarter until it is used against Rose
Co.'s share of Medicare tax for the quarter. If Rose Co. still
Beginning with the first quarter of 2023, the qualified has credit remaining after reducing its share of social
small business payroll tax credit for increasing research security tax (up to $250,000) and Medicare tax for the
activities is first used to reduce the employer share of third quarter, the remainder would be treated as a payroll
social security tax (up to $250,000) for the quarter and any tax credit against its share of social security tax (up to
remaining credit is then used to reduce the employer $250,000) and Medicare tax on wages paid in the fourth
share of Medicare tax for the quarter until it reaches zero. quarter. If the amount of the payroll tax credit remaining
In completing Schedule B, you take into account the exceeded Rose Co.'s share of social security tax (up to
payroll tax credit against the liability for the employer $250,000) and Medicare tax on wages paid in the fourth
share of social security tax starting with the first payroll quarter, it could be carried forward and treated as a payroll
payment of the quarter that includes payments of wages tax credit for the first quarter of 2025.
subject to social security tax to your employees until you
use up to $250,000 of credit against the employer share of Correcting Previously Reported Tax Liability
social security tax and you then take into account any
remaining payroll tax credit against the liability for the Semiweekly schedule depositors. If you’ve been
employer share of Medicare tax starting with the first assessed an FTD penalty for a quarter and you made an
payroll payment of the quarter that includes payments of error on Schedule B and the correction won’t change the
wages subject to Medicare tax to employees. Consistent total liability for the quarter you reported on Schedule B,
with the entries on Schedule B, the payroll tax credit you may be able to reduce your penalty by filing an
should be taken into account in making deposits of amended Schedule B.
employment tax. If any payroll tax credit is remaining at Example. You reported a liability of $3,000 on day 1 of
the end of the quarter that hasn't been used completely month 1. However, the liability was actually for month 3.
because it exceeds $250,000 of the employer share of Prepare an amended Schedule B showing the $3,000
social security tax and the employer share of Medicare tax liability on day 1 of month 3. Also, you must enter the
for the quarter, the excess credit may be carried forward to liabilities previously reported for the quarter that didn’t

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

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change. Write “Amended” at the top of Schedule B. The Tax increase—Form 941-X filed late. If you owe tax and
IRS will refigure the penalty and notify you of any change are filing a late Form 941-X, that is, after the due date of
in the penalty. the return for the return period in which you discovered the
Monthly schedule depositors. You can file a error, you must file an amended Schedule B with Form
Schedule B if you have been assessed an FTD penalty for 941-X. Otherwise, the IRS may assess an “averaged” FTD
a quarter and you made an error on the monthly tax penalty.
liability section of Form 941. When completing Schedule B The total tax reported on the “Total liability for the
for this situation, only enter the monthly totals. The daily quarter” line of the amended Schedule B must match the
entries aren’t required. corrected tax (Form 941, line 12, combined with any
Where to file. File your amended Schedule B, or, for correction reported on Form 941-X, line 23) for the
monthly schedule depositors, your original Schedule B at quarter, less any previous abatements and interest-free
the address provided in the penalty notice you received. If tax assessments.
you're filing an amended Schedule B, you don’t have to
submit your original Schedule B. Paperwork Reduction Act Notice. We ask for the
information on Schedule B to carry out the Internal
Form 941-X Revenue laws of the United States. You’re required to give
You may need to file an amended Schedule B with Form us the information. We need it to ensure that you’re
941-X to avoid or reduce an FTD penalty. complying with these laws and to allow us to figure and
collect the right amount of tax.
Tax decrease. If you’re filing Form 941-X for a quarter,
you can file an amended Schedule B with Form 941-X if You’re not required to provide the information requested
both of the following apply. on a form that is subject to the Paperwork Reduction Act
1. You have a tax decrease. unless the form displays a valid OMB control number.
Books or records relating to a form or its instructions must
2. You were assessed an FTD penalty. be retained as long as their contents may become
File your amended Schedule B with Form 941-X. The total material in the administration of any Internal Revenue law.
liability for the quarter reported on your amended Generally, tax returns and return information are
Schedule B must equal the corrected amount of tax confidential, as required by Code section 6103.
reported on Form 941-X. If your penalty is decreased, the The time needed to complete and file Schedule B will
IRS will include the penalty decrease with your tax vary depending on individual circumstances. The
decrease. estimated burden for employers filing Schedule B is
Tax increase—Form 941-X filed timely. If you’re filing a approved under OMB control number 1545-0029 and is
timely Form 941-X showing a tax increase, don’t file an included in the estimates shown in the Instructions for
amended Schedule B, unless you were assessed an FTD Form 941.
penalty caused by an incorrect, incomplete, or missing
Schedule B. If you’re filing an amended Schedule B, don’t
include the tax increase reported on Form 941-X.

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

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