Reminder: File Quarterly Form 941 and Colorado Tax Return by October 31
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If your business pays wages, the October 31 deadline to file IRS Form 941 is fast approaching. Filing Form 941, the Employer’s Quarterly Federal Tax Return, is a requirement for employers who withhold federal income tax, Social Security, and Medicare taxes from employee wages.
In addition, Colorado-based employers must also file a quarterly tax return with the Colorado Department of Labor by this date. This is an essential compliance requirement to report and pay the state's unemployment insurance (UI) taxes on wages paid within the quarter.
What Is Form 941?
Form 941 is used by employers to report:
Federal income tax withheld from employee wages,
Social Security and Medicare taxes withheld from employee paychecks, and
Employer contributions toward Social Security and Medicare taxes.
This form provides an accurate account of tax liability for each quarter, ensuring that the IRS has up-to-date information on the amounts paid or owed.
How to File Form 941
Here’s a quick guide to filing Form 941:
1. Gather Payroll Data: Collect information on total wages paid, federal income tax withheld, and Social Security and Medicare taxes withheld.
2. Complete Form 941: Use your payroll data to fill out Form 941 accurately. If you use accounting software like QuickBooks, the software prepares the form for you.
3. File Electronically or By Mail: The IRS recommends e-filing for faster processing, but you can also mail the completed form.
To e-file the form, you'll need to use filing software. Accounting programs like QuickBooks typically offer e-filing services.
If you choose to mail the form to the IRS, ensure that you send it to the correct address, which you can find in the Instructions for Form 941 based on your business's state. Additionally, we recommend mailing all tax returns, including Form 941, using certified mail with a return receipt. The certified mail option provides proof of timely filing, adhering to the IRS's mailing requirements.
4. Pay Any Amount Due: If you owe taxes, make a payment through EFTPS (Electronic Federal Tax Payment System; https://www.eftps.gov/eftps/) or by check.
If you pay by check, make sure you
write the check payable to the US Treasury,
state the business name and Employer Identification Number (EIN), and
state the form and period for which you make the payment. (For instance, for the Form 941 payment for the third quarter of 2024, you can write in the Memo Line of the check, “Form 941 (09/30/2024).”
Please note that, unlike the filing date for Form 941, which is based on the date the tax return is mailed, the date of your payment to IRS is determined by when the payment is received by IRS, not when it is mailed. To ensure you have proof of mailing, we still recommend sending your payment via certified mail.
Colorado Quarterly Tax Return with the Department of Labor
For Colorado businesses, the state requires that employers file a quarterly wage report and pay any UI taxes due by October 31. This ensures compliance with the Colorado Department of Labor and Employment’s requirements.
How to file in Colorado:
File Online: The MyUI Employer portal (https://cdle.colorado.gov/employers/myui-employer-plus) provides an easy way to file quarterly returns and make payments.
Provide Accurate Employee Data: Include details on wages paid to each employee, as this determines your state UI tax. The MyUI Employer portal conveniently will calculate your tax obligations based on your data. However, we recommend you verify the portal’s calculations with the tax return prepared by you or your accounting software.
Pay UI Taxes: You can pay your UI taxes directly through the MyUI Employer portal.
Consequences for Late Filing
Missing these deadlines can result in penalties and interest charges:
IRS Penalties for Late Form 941 Filing: The IRS may assess penalties and interest if your Form 941 is late, with additional penalties for unpaid taxes.
Colorado Penalties: Colorado also applies penalties and interest on late unemployment tax payments, which can increase your business's costs.
Final Thoughts
The October 31 deadline is a critical compliance requirement for businesses paying wages, both federally and at the state level. Take the time to gather payroll data and file on time to avoid penalties and interest.
Staying up to date on payroll tax obligations is essential for maintaining your business's good standing. It protects owners, officers, and employees from personal liability for unpaid employment taxes, such as the Trust Fund Recovery Penalty. Additionally, fulfilling these obligations helps build your employees' trust and confidence in you as their employer.
Olena Ruth | Tax Defense Attorney
Olena represents the taxpayers in federal and state tax audits, collection matters, administrative appeals, and the U.S. Tax Court’s cases. She is actively engaged in Tax Sections of the American Bar Association and Colorado Bar Association. She serves as Colorado Bar Association’s pro-bono attorney and liaison to the Internal Revenue Service. Her speaking engagements include presentations on tax matters in family law, employment tax issues, and communication with the IRS.
Olena can be reached at olena@ruthtaxlaw.com
