Schedule B (Form 941): Report of Tax Liability for Semiweekly Schedule Depositors (2011)

What Schedule B (Form 941) Is For

Schedule B (Form 941) is an attachment to the standard Form 941 (Employer's Quarterly Federal Tax Return) that provides the IRS with a detailed, day-by-day breakdown of when your business accumulated employment tax liabilities during a calendar quarter. Think of Form 941 as showing the IRS how much you owe in payroll taxes for the quarter, while Schedule B shows when you owed it—specifically, on which dates you paid wages to employees.

This schedule is required exclusively for semiweekly schedule depositors—employers who must deposit their payroll taxes twice weekly rather than monthly. The form helps the IRS verify that you've made your federal tax deposits on time according to the strict semiweekly deposit schedule. Your tax liability includes federal income tax withheld from employee paychecks plus both the employee and employer portions of Social Security and Medicare taxes. IRS.gov

It's crucial to understand that Schedule B reports tax liability (when you incurred the obligation), not tax deposits (when you actually paid the IRS). The IRS tracks your deposits separately through electronic fund transfers. This distinction trips up many filers, but remembering it will help you complete the form correctly.

When You’d Use Schedule B (Including Late and Amended Filings)

Standard Filing

You must file Schedule B (Form 941) every quarter—attached to your Form 941—if you're classified as a semiweekly schedule depositor. The form is due at the same time as Form 941: by the last day of the month following the end of each calendar quarter (April 30, July 31, October 31, and January 31). IRS.gov

When You Become a Semiweekly Depositor

You're required to file Schedule B if you meet either of these conditions during 2011:

Your total employment taxes reported during the "lookback period" (July 1, 2009, through June 30, 2010, for calendar year 2011) exceeded $50,000, OR
You accumulated $100,000 or more in tax liability on any single day during the current or prior calendar year (this triggers immediate semiweekly depositor status).

Important Exception

If your quarterly tax liability is less than $2,500, you don't need to complete Schedule B even if you're technically a semiweekly depositor. IRS.gov

Amended Filings

You may need to file an amended Schedule B in several situations:

Correcting deposit timing errors: If the IRS assessed a failure-to-deposit (FTD) penalty and you made errors on your original Schedule B—but the total tax for the quarter remains unchanged—you can file an amended schedule to potentially reduce penalties. Write "Amended" at the top and submit it to the address on your penalty notice.
With Form 941-X (tax decrease): If you're filing Form 941-X to claim a refund and you were assessed an FTD penalty, attach an amended Schedule B. The total on the amended schedule must match your corrected tax amount.
With Form 941-X (late tax increase): If you discovered you underreported taxes and are filing a late Form 941-X (after the return's due date), you must file an amended Schedule B to avoid "averaged" FTD penalties. IRS.gov

Key Rules or Details for 2011

Deposit Schedule Determination

Your deposit schedule for 2011 was based on your lookback period—the 12-month period from July 1, 2009, through June 30, 2010. If you reported more than $50,000 in employment taxes during that period, you were a semiweekly depositor for the entire 2011 calendar year. IRS.gov

The $100,000 Next-Day Rule

Even if you were a monthly depositor, accumulating $100,000 or more of tax liability on any single day immediately converted you to semiweekly depositor status for the remainder of the calendar year and the following year. When this happened, you had to deposit the taxes by the next banking day. IRS.gov

Semiweekly Deposit Deadlines

For 2011, semiweekly depositors followed these rules:

If you paid wages on Wednesday, Thursday, or Friday, you had to deposit taxes by the following Wednesday.
If you paid wages on Saturday, Sunday, Monday, or Tuesday, you had to deposit taxes by the following Friday.

Matching Requirements

The total tax liability shown on Schedule B had to exactly match line 10 of Form 941 or Form 941-SS. Any discrepancy would trigger IRS inquiry. IRS.gov

Prior Period Adjustments

When filing Schedule B, you could not adjust your current quarter's tax liability for corrections made on Form 941-X for previous quarters. Prior period adjustments were handled separately and didn't affect the current Schedule B.

Step-by-Step (High Level)

Step 1: Enter Business Information

At the top of the schedule, carefully enter your Employer Identification Number (EIN) and business name exactly as they appear on your Form 941. Even minor discrepancies can cause processing delays.

Step 2: Select Quarter and Year

Check the appropriate box for the quarter you're reporting (1st, 2nd, 3rd, or 4th quarter) and enter the calendar year (2011). Ensure this matches your attached Form 941.

Step 3: Record Daily Tax Liabilities

The schedule is divided into three months, with 31 numbered lines for each month representing the days of the month. Enter your tax liability on the line corresponding to each date you paid wages to employees—not the date you made deposits or the payroll period end date. For example, if you paid employees on January 14, 2011, enter that day's total tax liability on line 14 of Month 1.

Your daily tax liability includes:

Federal income tax withheld from employees
Employee Social Security and Medicare taxes withheld
Employer Social Security and Medicare taxes

Step 4: Calculate Monthly Totals

Add up all the daily entries for each month and enter the sum in the "Tax liability for Month" line at the bottom of each month's section.

Step 5: Calculate Quarterly Total

Add the three monthly totals together and enter the sum in the "Total liability for the quarter" box at the bottom of the form. This figure must exactly equal line 10 of your Form 941. IRS.gov

Step 6: Attach and Submit

Attach the completed Schedule B to your Form 941 and file them together by the quarterly deadline. Never file Schedule B separately.

Common Mistakes and How to Avoid Them

Mistake #1: Confusing Deposit Dates with Wage Payment Dates

Many filers mistakenly enter dates when they made deposits to the IRS rather than dates when they paid employees. Remember: Schedule B tracks when liabilities were incurred (payday), not when they were paid to the IRS. Always use the actual date wages were paid to employees.

Mistake #2: Totals Don't Match Form 941

The total liability on Schedule B must exactly equal line 10 of Form 941. Even a one-cent discrepancy will trigger IRS follow-up. To avoid this, double-check your arithmetic and ensure you're including all components of payroll taxes (withheld income tax plus employee and employer Social Security and Medicare).

Mistake #3: Including Prior Period Adjustments

When filing Schedule B with your current quarter's Form 941, don't adjust your tax liability for corrections from Form 941-X filed for previous quarters. Each quarter's Schedule B should reflect only that quarter's actual liabilities, keeping adjustments separate. IRS.gov

Mistake #4: Filing When Not Required

If your total quarterly tax liability is under $2,500, you don't need to file Schedule B even if you're technically a semiweekly depositor. Filing unnecessarily creates extra paperwork and potential confusion.

Mistake #5: Incomplete Amended Filings

When filing an amended Schedule B, filers often forget to write "Amended" at the top or fail to include all previously reported liabilities that didn't change. An amended schedule must show the complete corrected picture for the quarter, not just the changes.

Mistake #6: Choosing the Wrong Deposit Schedule

Some employers miscalculate their lookback period or forget about the $100,000 next-day rule, causing them to follow the wrong deposit schedule. Carefully review the 12-month lookback period and monitor any single-day liability accumulations to determine your correct status. IRS.gov

What Happens After You File

IRS Processing and Verification

Once you submit Schedule B with Form 941, the IRS matches your reported tax liabilities against the deposit data they received from your electronic fund transfers. They verify that you deposited the correct amounts on the proper dates according to the semiweekly schedule rules. This reconciliation helps them determine whether failure-to-deposit penalties apply.

Potential Penalties

If the IRS identifies deposit timing issues, they may assess failure-to-deposit (FTD) penalties based on a tiered system:

2% for deposits made 1-5 days late
5% for deposits made 6-15 days late
10% for deposits made 16+ days late or deposited directly to the IRS rather than through electronic funds transfer
15% for amounts still unpaid more than 10 days after receiving an IRS notice

"Averaged" Penalties

If you fail to properly complete or file Schedule B, the IRS may assess an "averaged" failure-to-deposit penalty. This happens when the IRS lacks the day-by-day information needed to calculate actual late deposit penalties, so they estimate penalties based on assumptions that may not favor you. This is why accurate, complete Schedule B filing is crucial. IRS.gov

Record Retention

Keep copies of Schedule B along with supporting payroll records for at least four years. You may need these documents if the IRS audits your employment tax returns or if you need to file amended returns later.

FAQs

Q1: What's the difference between Form 941 and Schedule B?

Form 941 is your quarterly employer's tax return showing total taxes owed for the quarter, while Schedule B breaks down exactly when those tax liabilities occurred day by day. Think of Form 941 as the summary and Schedule B as the detailed backup documentation showing you've deposited taxes on time.

Q2: How do I know if I'm a monthly or semiweekly depositor?

Check your employment tax liability for the lookback period (July 1, 2009, through June 30, 2010, for calendar year 2011). If you reported $50,000 or less, you're a monthly depositor. If you reported more than $50,000, or if you ever accumulated $100,000 or more on any single day, you're a semiweekly depositor. IRS.gov

Q3: What if I paid employees multiple times in one day?

Combine all tax liabilities from multiple payrolls on the same calendar date and enter the total on that day's line in Schedule B. Don't create separate entries for different payrolls on the same day.

Q4: Can I file Schedule B separately from Form 941?

No. Schedule B must always be attached to Form 941 and filed together. Never send Schedule B separately—the IRS won't process it, and you may face penalties for not properly completing your Form 941.

Q5: What if I discover an error after filing Schedule B?

If the error doesn't change your total quarterly tax liability and you received an FTD penalty notice, you can file an amended Schedule B with "Amended" written at the top. If the error changes your total tax liability, you need to file Form 941-X to correct the underlying return and include an amended Schedule B if you were assessed an FTD penalty. IRS.gov

Q6: Do I need Schedule B if I use a payroll service?

Maybe. Even if your payroll service handles deposits, you're ultimately responsible for filing correct returns. Many payroll services will prepare Schedule B for you, but verify they're doing so if you're a semiweekly depositor. As the employer, the IRS holds you responsible for accurate filing.

Q7: What's the consequence of not filing Schedule B when required?

If you're required to file Schedule B but don't, the IRS may assess "averaged" FTD penalties that could be higher than penalties based on your actual deposit pattern. The IRS will estimate when deposits should have been made, potentially resulting in higher penalties than if you'd filed the schedule correctly from the start. IRS.gov

This guide summarizes key information about Schedule B (Form 941) for 2011. For complete instructions and the most current information, always consult official IRS publications at IRS.gov or speak with a qualified tax professional.