941 Form Numbers Do Not Match Employer Totals Report
If your 941 Form tax totals are off by more than a few cents shown on line 7 "Current quarter’s adjustment for fractions of cents" you have an error in one or more of your payroll transactions for the Quarter. The 941 Form Audits the FICA and Medicare.
If the difference is on line 2 "Wages, tips, and other compensation" the problem may be that you have non-taxable deductions and you must check the 941 Box in the Company Deductions settings for those types of deductions. Line 2 displays the taxable wages subject to FIT.
Having a large number on line 7 would come from several reasons:
- First make sure you've selected the correct Quarter for the 941 Form. 1, 2, 3 or 4 to match the Quarter you are comparing.
- Not having the 941 box checked on deductions set up in the company that are non-taxable like a 401k plan.
- Manually entering or editing an employee’s pay transaction and making an error in your calculations.
- Opening a payroll transaction and then saving it instead of cancelling can cause problems.
- Entering the pay or hours and calculating and then adding a bonus or commission without recalculating.
- Misuse of a non-taxable deduction (cannot enter a negative number in those).
- You have one or more non-employee payees setup improperly (see the help file for settings all taxes must be checked as exempt).
- Forgetting to calculate before saving a payroll transaction.
- If you have agricultural employees, the 941 does not display their wages and taxes and if this is the cause, it is not a problem. We do suggest that agricultural employees be set up in a separate company database. If you accidentally set an employee as one that is not, we can edit your transactions in the database to fix your problem.
- The newest item is with the new laws allowing more employees to be marked exempt from Federal Income Tax will reduce line 2 on the 941 Form.
- And other things I'm probably forgetting...
- Just received a new once that caused the same type of problem. The user added a new employee and ignored the warring about using a duplicate employee ID. You cannot have two employees with the same ID.
This year 2013 the Employee Share of FICA tax was raised back to 6.2% and if you did not update your tax tables and program with the new tax code, your FICA would be the reason and you will need to contact the IRS to see what they want you to do if it was after the first Quarter as that was the grace period for the problem of deducting too little from your employees.
Another mistake we've seen is users actually set the date back and performed 2012 payrolls using the 2013 program with the 2013 Employee FICA rate and wage limit.
The code for the 941 routines has not changed in years so any imbalance is from a data entry error. You will need to go through each transaction for the quarter to find the problem.
ZPAY Payroll Systems, Inc.