How to complete IRS Form 941 for the Tax Year 2025?

As we step into 2025, it’s important for employers to start thinking of filing their quarterly employment tax returns. One of the key forms required is Form 941 – the Employer’s Quarterly Federal Tax Return.  Let us discuss it in detail! 

For the 2025 tax year, there are a few important changes to be aware of when filling out Form 941

What is Form 941?

Form 941 for the 2025 tax year is the Employer’s Quarterly Federal Tax Return that employers use to report the wages paid to their employees and certain taxes like federal income tax, social security tax, and Medicare taxes withheld from employee paychecks during each quarter. 

Note: If an employee earns more than $200,000, additional Medicare taxes will be withheld. 

What’s New for 2025 

• Social Security Tax:  6.2% for both employee and employer (total 12.4%) and the Wage Limit is $176,100 
• Medicare Tax: 1.45% for both employee and employer (total 2.9%) and no wage limit. 
• Household Workers: Taxes apply when household worker gets a pay of $2,800 or more in cash.  
• Election Workers: Taxes apply when an election worker earns $2,400 or more in cash. 
• Form 941-X: You can now e-fileForm 941-X

Step-by-Step guide: Before filling out Form 941 for 2025, gather the required payroll details.

• Business Details – Name, EIN, and address. 
• Employee Details – Total count of employees and wages paid on this quarter 
• Taxes – 
  • Federal income tax withheld from employee wages 
  • Social Security and Medicare taxes 
  • Taxable Social Security and Medicare wages and tips 
  • Any Additional Medicare tax withheld (if applicable) 
• Deposits – Any tax deposits made during the quarter. 
• Schedule B (Form 941) – Required if the employer is a semiweekly depositor or accumulates $100,000 or more in tax liability on any given day. 

Once you’ve collected this information, we can dive into TaxZerone’s account to E-file your quarterly payroll tax returns, making the entire process more convenient and efficient.

Business and Quarterly Information

At the upper section of Form 941, complete the sections for your Employer Identification Number (EIN), business name, trade name (if applicable), and business address.

On the right side of 941 Form, select the appropriate checkbox of the quarter that applies to this filing (Q1, Q2, Q3, or Q4). 

Part 1: Quarter details 

Line 1: Enter the count of employees listed on your payroll for the pay period covering March 12th, June 12th, September 12th, or December 12th within the selected quarter.

Don’t include:

• Household employees,
• Employees in non-pay status for the pay period,
• Farm employees,
• Pensioners, or
• Active members of the U.S. Armed Forces.

Line 2: Enter the total sums of Wages, tips, and other compensations distributed to your workforce in the quarter. This includes all forms of remuneration subject to federal income tax withholding.

Line 3: Enter the total federal income tax amount withheld from your employees’ wages, tips, and other compensation for the quarter.

Line 4: Check this box if, in the quarter, there were no payments made towards wages, tips, or other compensations subject to Social Security or Medicare taxes. In other words, if your business didn’t have any employees or didn’t make payments subject to Social Security or Medicare tax requirements for the reporting quarter.

Line 5a: Taxable Social Security Wage x 0.124

• Report the total taxable wages paid to employees that are subject to Social Security tax withholding for the quarter, including wages, tips, and other compensation.

Line 5b: Taxable Social Security Tips x 0.124

• Enter the total tips reported by employees that are subject to Social Security tax for the quarter.

Line 5c: Taxable Medicare Wages & Tips x 0.029

• Report the total compensation paid to employees that is subject to Medicare tax for the quarter, including regular wages, bonuses, and tips.

Line 5d: Taxable Wages & Tips Subject to Additional Medicare Tax Withholding x 0.009

• Enter wages and tips exceeding $200,000 for single filers or $250,000 for married filing jointly that are subject to the Additional Medicare Tax withholding.

Line 5e: Report the combined total of Social Security and Medicare taxes withheld from employee wages for the quarter, including both employee and employer portions. This will auto-calculate by adding lines 5a-5d.

Line 5f: Reports taxes owed on tips that employees did not report to the employer, as required by Section 3121(q) of the tax code.

Line 6: The total employment taxes before any adjustments, including Social Security, Medicare, and Additional Medicare taxes withheld from employees and the employer’s share.

Line 7: This field is used to report any adjustments for fractions of cents for the current quarter. When calculating payroll taxes, certain calculations may result in fractions of cents that need to be rounded. In this field, you should report the net total of these fractional adjustments for the quarter.

Line 8: This field reports adjustments related to sick pay for the current quarter. It includes corrections or updates to previously reported sick pay amounts, allowing you to provide accurate information for the current filing.

Line 9: This field is to report adjustments for tips and group-term life insurance for the current quarter. This includes corrections or changes to amounts reported in previous quarters for tips provided to employees and the cost of group-term life insurance coverage.

Line 10: This field represents the final calculation of employment taxes for the quarter after any adjustments or corrections have been made. It is the addition of the amounts shown on lines 6–9 and will be auto-calculated.

Line 11: Enter the amount of the qualified small business payroll tax credit for increasing research activities (R&D Tax Credit) from Form 8974. This credit is intended to encourage businesses to invest in research and development activities. Attach Form 8974 to this return. 

Line 12: This field is auto-calculated by TaxZerone by subtracting line 11 from line 10. The amount entered on line 12 cannot be less than zero, and it represents the total taxes owed after adjustments and nonrefundable credits.

Line 13: Enter the total tax deposits for the quarter on this line. Include any overpayments from previous quarters or amounts applied from filing Forms 941-X, 941-X (PR), 944-X, or 944-X (SP) during the current quarter.

Line 14: If the total taxes (Line 12) exceed your deposits (Line 13), enter the difference on Line 14. Leave this line blank if the amount is less than $1.

Line 15: If your deposits (Line 13) are more than the total taxes (Line 12), enter the overpaid amount on Line 15. Choose whether you want the overpayment applied to your next return or refunded. The IRS will refund amounts under $1 automatically.

• Then click the ‘Save & Continue’ button to move on to Part 2.

Part 2: Deposit Schedule and Tax Liability form this Quarter

Line 16: Check the first box if your tax liability was under $2,500 for this quarter and the previous quarter, and you didn’t have a $100,000 next-day deposit obligation.

• Check the second box if you were a monthly depositor for the entire quarter and enter your monthly tax liabilities.

• Check the third box if you were a semiweekly depositor at any point during the quarter and attach Schedule B.

Part 3: About Your Business

Line 17: Select the box on line 17 if your business has closed or stopped paying wages. Including the final date wages were paid. 

Also, attach a Final Payroll Statement with payroll details, including the name and address of the person keeping payroll records. This helps ensure proper documentation of your final payroll. Additional info will be collected during e-filing to support accurate processing. 

Line 18: Check this box if you hire employees seasonally and don’t file every quarter.

Part 4: Third-Party Designee

Authorize a third party (e.g., tax preparer) to discuss your return with the IRS by selecting “Yes” and providing their name, phone number, and a 5-digit PIN. 

Otherwise, choose “No” (you will need to handle all communication with the IRS yourself).

• Then click the ‘Save & Continue’ button to move on to Part 5. 

Part 5: Signature and Authorization

Choose the Signature Option

• Form 8453-EMP Signature Document

                                   (or)

• 94x Online Signature PIN

Form 8453-EMP Signature Document

TaxZerone supports Form 8453-EMP for sign and submit your 941 Form to the IRS.

Enter the signatory’s data accurately & electronically sign Form 8453-EMP. 

94x Online Signature PIN

Enter your details and 10-digit signature PIN issued by the IRS to electronically validate your Employment Tax submissions

Get your Form 94x Online Signature PIN for Free on TaxZerone

• Then click ‘Save & Continue’ 

After you’ve finished filling in all three pages of Form 941 and signed it, it’s time to submit the form to the IRS.

TaxZerone makes quarterly payroll tax filing a breeze. Our online platform automatically calculates and completes Form 941 accurately, ensuring compliance. No more manual maths or headaches – just enter your data and let us handle the rest. Save valuable time while staying audit-ready. Simplify tax season with TaxZerone!