950617
Schedule R (Form 941) (Rev. 1-2018)
Section references are to the Internal Revenue Code unless otherwise
noted.
Future Developments
For the latest information about developments related to Schedule R
and its instructions, such as legislation enacted after they were
published, go to www.irs.gov/Form941.
What’s New
A certified professional employer organization (CPEO) must attach
Schedule R to its aggregate Form 941, Employer’s QUARTERLY Federal
Tax Return.
General Instructions
Purpose of Schedule R
Use Schedule R to allocate the aggregate information reported on Form
941 to each client. For purposes of Schedule R, the term “client” means
(a) an “employer or payer” identified on the Form 2678, Employer/Payer
Appointment of Agent; (b) a customer who enters into a contract that
meets the requirements under section 7705(e)(2); or (c) a client who
enters into a service agreement described under Regulations section
31.3504-2(b)(2) with a CPEO. If you have more than 10 clients, complete
as many continuation sheets as necessary. Attach Schedule R, including
any continuation sheets, to your aggregate Form 941.
Who Must File?
Agents approved by the IRS under section 3504 and CPEOs must
complete Schedule R each time they file an aggregate Form 941. To
request approval to act as an agent for an employer under section 3504,
the agent must file Form 2678 with the IRS. Form 2678 must be
previously filed and approved by the IRS before filing Schedule R. To
become a CPEO, the organization must apply through the IRS Online
Registration System. Visit the IRS website at www.irs.gov/CPEO for
more information.
When Must You File?
If you are an aggregate Form 941 filer, file Schedule R with your
aggregate Form 941 every quarter. Agents may file Form 941 and
Schedule R electronically or by paper submission. CPEOs generally
must file Form 941 and Schedule R electronically. For more information
about a CPEO's requirement to file electronically, see Rev. Proc.
2017-14, 2017-3 I.R.B. 426, available at
www.irs.gov/irb/2017-03_IRB/ar14.html.
Specific Instructions
Completing Schedule R
Enter Your Business Information
Carefully enter your EIN and the name of your business at the top of the
schedule. Make sure they exactly match the EIN and name shown on
the attached Form 941. Check one of the “Type of filer” boxes to tell us
if you are a section 3504 agent or a CPEO.
Calendar Year
Enter the calendar year that applies to the quarter checked.
Check the Box for the Quarter
Check the appropriate box of the quarter for which you are filing
Schedule R. Make sure the quarter checked on the top of the
Schedule R matches the quarter checked on the attached Form 941.
Client and Employee Information
On Schedule R, including any continuation sheets, you must report the
following for each client.
Note: When entering amounts over 999.99 on Schedule R, don't enter
commas.
Column a. The client’s EIN.
Column b (CPEO Use Only). Type of wages, tips, and other
compensation. Enter a code to report the type of wages, tips, and other
compensation paid to the individual(s) performing services for the client.
If you paid more than one type of wages, tips, or other compensation,
you must use more than one line to report for that client and enter the
applicable code for each line. The following four codes are the only
entries that can be made in column b.
• A: Wages, tips, and other compensation paid under section 3511(a).
• B: Wages, tips, and other compensation paid under section 3511(c).
• C: Wages, tips, and other compensation not reported under Code A or
Code B paid as a payor under a service agreement described in
Regulations section 31.3504-2(b)(2).
• D: Wages, tips, and other compensation paid as an agent under
Regulations section 31.3504-1.
Column c. Wages, tips, and other compensation allocated to the listed
client EIN from Form 941, line 2.
Column d. Total income tax withheld from wages, tips, and other
compensation allocated to the listed client EIN from Form 941, line 3.
Column e. Total social security and Medicare taxes allocated to the
listed client EIN from Form 941, line 5e. This amount includes Additional
Medicare Tax withholding.
Column f. Section 3121(q) Notice and Demand—Tax due on unreported
tips allocated to the listed client EIN from Form 941, line 5f.
Column g. Qualified small business payroll tax credit for increasing
research activities allocated to the listed client EIN from Form 941, line
11. You must attach a separate Form 8974 for each client claiming this
credit.
Column h. Total taxes after adjustments and credits allocated to the
listed client EIN from Form 941, line 12.
Column i. Total deposits from Form 941, line 13, plus any payments
made with the return allocated to the listed client EIN.
You must also report the same information for your employees on
Schedule R, line 13.
Compare the total of each column on Schedule R, line 14 (including
your information on line 13), to the amounts reported on the aggregate
Form 941. For each column total of Schedule R, the relevant line from
Form 941 is noted in the column heading.
The totals on Schedule R, line 14, must match the totals on Form 941.
If the totals don't match, there is an error that must be corrected before
submitting Form 941 and Schedule R.
Paperwork Reduction Act Notice. We ask for the information on
Schedule R to carry out the Internal Revenue laws of the United States.
You are required to give us this information. We need it to ensure that
you are complying with these laws and to allow us to figure and collect
the right amount of tax.
You aren't required to provide the information requested on a form
that is subject to the Paperwork Reduction Act unless the form displays
a valid OMB control number. Books or records relating to a form or its
instructions must be retained as long as their contents may become
material in the administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by section
6103.
The time needed to complete and file Schedule R will vary depending
on individual circumstances. The estimated average time is:
Recordkeeping . . . . . . . . . . . . 12 hr., 26 min.
Learning about the law or the form . . . . . . . . 12 min.
Preparing, copying, and assembling the form . . . . . 24 min.
If you have comments concerning the accuracy of these time
estimates or suggestions for making Schedule R simpler, we would be
happy to hear from you. You can send us comments from
www.irs.gov/FormComments. Or you can send your comments to
Internal Revenue Service, Tax Forms and Publications Division, 1111
Constitution Ave. NW, IR-6526, Washington, DC 20224. Don't send
Schedule R to this address. Instead, see Where Should You File? in the
Instructions for Form 941.
