Skip to main content

Federal Form 941

Federal Form 941, also known as the Employer's Quarterly Federal Tax Return, is submitted at the end of every quarter to report how much your district has collected in federal income tax withholding, Social Security/FICA, and Medicare taxes from employees' wages. SchoolInsight Financials gathers the information for Form 941 from all payroll runs marked “Complete” that have a date within the quarter. Information about individual employees is not reported.

When to File Form 941
Generate
Common Problems - Settings
Substitutes: Incorrect Position
Retired Certified Substitutes
Negative FICA or Medicare Earnings
Common Problems - Finalized Report
Overpayment
Underpayment
941-X

When to File Form 941

Form 941 is filed quarterly according to the calendar year, not the fiscal year, with the following due dates:

  • Quarter 1 (January - March): Due April 30
  • Quarter 2 (April - June): Due July 31
  • Quarter 3 (July - September): Due October 31
  • Quarter 4 (October - December): Due January 31

If any due date falls on a Saturday, Sunday, or legal holiday, the return is due on the next business day.

Generate

SchoolInsight Financials will generate the form as a PDF document which can be mailed to the IRS.

To generate the 941:

  1. Go to Financials Main > Payroll > Tax Forms
  2. Select the type Federal 941
  3. Choose a Quarter
  4. Choose a Deposit Schedule (based on whether you run payroll Monthly or Semiweekly)
  5. If the Deposit Schedule is Semiweekly, check “Generate Schedule B”
  6. Preview

The top of the preview shows the totals for some of the significant fields on the form, including whether there’s an overpayment or a balance due. 

The bottom of the preview shows a breakdown of each employee’s federal income tax (FIT), FICA, and Medicare contributions in the quarter. Instances where FICA is not equal to 12.4% of the FICA Earnings or Medicare is not equal to 2.9% of the Medicare Earnings will be marked with a warning . 

If you ever see a non-zero Balance Due or Overpayment, you should reach out to SchoolInsight Financials before making a payment or attempting any changes on your own. Each situation is unique and may require additional investigation to determine the underlying cause. Some problems, although they may appear as an over/underpayment, may actually be a case of incorrect wages which our team can help resolve. 

Common Problems - Settings

Substitutes: Incorrect Position

Substitute pay uses the Retirement Plan assigned to each position in order to determine which subtotals are increased by wages.

  Tax SUTA TRS IMRF FICA Med
TRS + + +     +
IMRF/FICA + +   + + +
FICA Only + +     + +
None + +       +

For this reason, substitute employees should have different positions if they have multiple substitute roles that contribute to different subtotals (e.g. certified vs. non-certified). Care should be taken when recording substitute pay on the Employee Attendance/Time Off/Substitutes page since choosing the wrong position can cause the wrong subtotals to be affected.

For instance, if a substitute has a single position with the Retirement Plan TRS, but they end up doing non-certified work, a new position with a different retirement plan must be selected. Using the original TRS position will result in the wages not increasing the FICA subtotal, when they should be doing so.

Retired Certified Substitutes

The retirement plan for employees who have retired from TRS should be set to “None” since they do not contribute to TRS, IMRF, or FICA. If this field is left blank or set to “FICA Only”, the 941 preview will show the employee having a positive amount in FICA earnings but $0 in contributions, resulting in the appearance of a “balance due” which is not actually true. 

Correcting this will require changes to previously completed payroll runs, which our SchoolInsight Financials team can assist with. When contacting us, please provide the employee names and the quarter being affected. It’s also important that you set the correct retirement plan for those employees based on their positions to prevent this from happening in the future. This can be done on the Retirement tab in Employee - Single View.

Negative FICA or Medicare Earnings

Although this is a rare occurrence, if you encounter an employee whose total FICA or Medicare Earnings for the quarter appear as a negative amount, please contact us directly.

 

Common Problems - Finalized Report

The SchoolInsight team may have been able to help correct the wages and eliminate the initial overpayment or underpayment. However, in some cases there is a genuine overpayment or underpayment that you will need to address. Do not proceed with the following instructions unless have confirmed that there is a genuine overpayment or underpayment. 

Overpayment

If there’s an overpayment (line 15 in the preview), you have the option to either receive a refund in the mail or apply the overpayment amount to the next quarter. 

We generally recommend applying the overpayment to the next quarter. Using this option allows for easier tracking of your payroll liabilities but requires that you:

  1. Identify the employee(s) that caused the overpayment and reduce their FICA and Medicare items on the next payroll run
    • Note: If Q4 has the overpayment, you should create an adjustment run for those employees in Q4 so that their W2s calculate correctly
  2. Remember to manually adjust line 13 on the next quarter’s 941 to add the overpayment after generating the PDF. You must also adjust all subsequent lines that are affected by line 13 (lines 14-15)

Underpayment

If there’s a balance due (line 14 in the preview), we recommend making the additional payment to the IRS and recording it in SchoolInsight Financials as a payroll liability payment.

  1. First identify the employee(s) where the underpayment occurred and whether it was for FICA or Medicare. 
  2. Create an adjustment payroll run dated within that quarter and add the employee(s)
  3. Add FICA and/or Medicare items (employee and employer)
  4. Enter the additional value that should have been withheld/added as a benefit
  5. Initiate the payment on EFTPS, record the payment on the Liabilities page, then mark the run Complete
  6. The 941 preview will update the amount for line 13 and clear out the underpayment

941-X

In certain circumstances, you may be required to file an amended 941 to correct errors on a previously filed 941. This can include corrections to underreported tax amounts or claiming a refund for overreported amounts. Our SchoolInsight Financials team can let you know if filing a 941-X is necessary relative to your situation.