Instructions for Form 941, Employer's Quarterly Federal Tax Return Revision Date 06/22/2022

• Issuer: Treasury Department
• Section: Treasury Department

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Instructions for Schedule R

(Form 941)

(Rev. March 2024)

Allocation Schedule for Aggregate Form 941 Filers

Department of the Treasury

Internal Revenue Service

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 IRS.gov/

Form941.

What’s New

The format of the March 2024 revision of Schedule R has

reverted back to the format previously used on the March

2022 revision of Schedule R, in which columns m, s, t, and

v were "Reserved for future use." The calendar year field

on Schedule R is no longer prepopulated. In most cases,

the March 2024 revision of Schedule R should only be

used for quarters beginning after December 31, 2023.

However, in some rare instances (for example, you have a

client that is eligible to take the COBRA premium

assistance credit after the first quarter of 2022), you may

need to file the March 2024 revision of Schedule R with a

Form 941-X, Adjusted Employer's QUARTERLY Federal

Tax Return or Claim for Refund, for a quarter that began

before January 1, 2024.

The March 2024 revision of Schedule R includes a new

checkbox to tell us if the Schedule R is attached to Form

941 or 941-X. Columns f, l, n, o, p, u, w, x, and y are now

used only when Schedule R is attached to Form 941-X.

At this time, the IRS expects the March 2024 revision of

Schedule R and these instructions to also be used for the

second, third, and fourth quarters of 2024, and possibly

longer. If changes in law require additional changes to

Schedule R, the form and/or these instructions may be

revised. You may need a prior revision of Schedule R

when filing a Form 941-X (for example, to claim or correct

the employee retention credit). Prior revisions of

Schedule R are available at IRS.gov/Form941 (select the

link for "All Form 941 Revisions" under "Other Items You

May Find Useful"). Don't use an earlier revision of

Schedule R for any calendar quarter beginning after

December 31, 2023.

General Instructions

Purpose of Schedule R

Use Schedule R to allocate certain aggregate information

reported on Form 941 or 941-X to each client. For

purposes of Schedule R, the term “client” means (a) an

“employer or payer” identified on Form 2678, Employer/

Payer Appointment of Agent; (b) a customer who enters

into a contract that meets the requirements under section

7705(e)(2); (c) a client who enters into a service

agreement described under Regulations section

31.3504-2(b)(2) with a certified professional employer

organization (CPEO); (d) a client who enters into a service

agreement described under Regulations section

31.3504-2(b)(2) with a non-certified professional employer

organization (PEO); or (e) a third party paying qualified

sick leave wages as an agent for the employer under

Regulations section 32.1(e)(3). If you have more than five

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. Go to the IRS website at

IRS.gov/CPEO for more information. Other third-party

payers that file aggregate Forms 941, such as

non-certified PEOs, must complete and file Schedule R if

they have clients that are claiming the qualified small

business payroll tax credit for increasing research

activities. Third-party payers other than agents approved

by the IRS under section 3504 and CPEOs need to

include client-by-client amounts only for those clients

claiming the qualified small business payroll tax credit for

increasing research activities. Amounts for clients not

claiming the qualified small business payroll tax credit for

increasing research activities are included on Schedule R,

page 1, line 8. Schedule R must also be completed if any

clients are claiming credits on Form 941-X.

When Must You File?

If you’re an aggregate Form 941 filer, file Schedule R with

your aggregate Form 941 every quarter. Agents and

non-certified PEOs may file Form 941 and Schedule R

electronically or by paper submission. CPEOs must

generally file Form 941 and Schedule R electronically. For

more information about a CPEO's requirement to file

electronically, see Rev. Proc. 2023-18, 2023-13 I.R.B.

605, available at IRS.gov/irb/2023-13_IRB#REV-

PROC-2023-18.

Beginning sometime in 2024, the IRS expects to

make filing Form 941-X available as part of

Modernized e-File (MeF). Monitor IRS.gov for

more information on availability.

TIP

Jan 10, 2024 Cat. No. 53729E