Instructions for Schedule B (Form 941) - Rev. June 2025 - Report of Tax Liability for Semiweekly Schedule Depositors

Sep 19, 2026

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Instructions for Schedule B (Form 941) explain how semiweekly schedule depositors report daily tax liability based on the dates wages are paid. The guidance covers withholding and employer tax liability for federal income tax, social security, Medicare, and Additional Medicare Tax over $200,000. It also addresses future developments, key reminders for COVID-19-related credits, payroll tax credits for increasing research activities, and rules for prior period adjustments when filing Form 941-X or 944-X.

LanguageEnglish

CategoryForms

FormatPDF

Pages4

Reading Time2 min

AccessFree to download

Purpose of Schedule B

Reporting daily tax liability

Reminders and credit limitations

Payroll tax credit for increasing research activities

Reporting prior period adjustments

Instructions for Schedule B (Form 941) (Rev. June 2025) Use with the March 2024 revision of Schedule B (Form 941) Report of Tax Liability for Semiweekly Schedule Depositors Section references are to the Internal Revenue Code unless otherwise noted. Future Developments For the latest information about developments related to Schedule B and its instructions, such as legislation enacted after they were published, [go to](go to IRS.gov/)[ ](go to IRS.gov/)[IRS.gov/](go to IRS.gov/)[ ](go to IRS.gov/)[Form941](Form941.)[.](Form941.) Reminders The COVID-19 related credit for qualified sick and family leave wages is limited to leave taken after March 31, 2020, and before October 1, 2021, and may no longer be claimed on Form 941. Effective for tax periods beginning after December 31, 2023, the lines used to claim the credit for qualified sick and family leave wages have been removed from Form 941 because it would be extremely rare for an employer to pay wages after December 31, 2023, for qualified sick and family leave taken after March 31, 2020, and before October 1, 2021. Therefore, the instructions on adjusting your tax liability for the nonrefundable portion of this credit have been removed from these instructions. If you're eligible to claim the credit for qualified sick and family leave wages because you paid the wages after December 31, 2023, for an earlier applicable leave period, file Form 941-X, Adjusted Employer's QUARTERLY Federal Tax Return or Claim for Refund, to claim the credit for qualified sick and family leave wages for the quarter that you paid the wages after you file Form 941. See the Instructions for Form 941-X for more information. Also see the March 2023 revision of these instructions for information on adjusting tax liability for the nonrefundable portion of the credit for qualified sick and family leave wages, which you may need to do when filing Form 941-X. Qualified small business payroll tax credit for increasing research activities. For tax years beginning before January 1, 2023, a qualified small business may elect to claim up to $250,000 of its credit for increasing research activities as a payroll tax credit. The Inflation Reduction Act of 2022 (the IRA) increases the election amount to $500,000 for tax years beginning after December 31, 2022. The payroll tax credit election must be made on or before the due date of the originally filed income tax return (including extensions) . The portion of the credit used against payroll taxes is allowed in the first calendar quarter beginning after the date that the qualified small business filed its income tax return. The election and determination of the credit amount that will be used against the employer’s payroll taxes are made on Form 6765, Credit for Increasing Research Activities. The amount from Form 6765 must then be reported on Form 8974, Qualified Small Business Payroll Tax Credit for Increasing Research Activities. Starting in the first quarter of 2023, the payroll tax credit is first used to reduce the employer share of social security tax up to $250,000 per quarter and any remaining credit reduces the employer share of Medicare tax for the quarter. Any remaining credit, after reducing the employer share of social security tax and the employer share of Medicare tax, is then carried forward to the next quarter. Form 8974 is used to determine the amount of the credit that can be used in the current quarter. For more information about the payroll tax credit, [see](see IRS.gov/)[ ](see IRS.gov/)[IRS.gov/](see IRS.gov/)[ ](see IRS.gov/)[ResearchPayrollTC](ResearchPayrollTC. Also see Adjusting tax liability for the)[. Also see](ResearchPayrollTC. Also see Adjusting tax liability for the)[ ](ResearchPayrollTC. Also see Adjusting tax liability for the)[Adjusting tax liability for the](ResearchPayrollTC. Also see Adjusting tax liability for the)[ ](ResearchPayrollTC. Also see Adjusting tax liability for the)qualified small business pay

FAQs

How is the qualified small business payroll tax credit for increasing research activities applied?

The election amount is made based on timing requirements and credited against payroll taxes using Form 6765 and reported on Form 8974, with first use starting in the first quarter of 2023.

Sep 19, 2026

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