# Payroll tax returns: 941, 940 and W-2

> Form 941 each quarter (Northwind's first by November 2, 2026), and Form 940 and the W-2s by February 1, 2027 — each tied to the register and the deposits.

Source: https://lopifi.com/learn/payroll-tax-returns
Part of: Lopifi — US GAAP books on autopilot, checked by a CPA (https://lopifi.com)

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**What payroll tax returns does an employer file, and when?** Form 941 each quarter (Northwind's first by November 2, 2026), and Form 940 and the W-2s by February 1, 2027 — each tied to the register and the deposits.

Deposits pay the tax; returns report it. Three federal filings carry a payroll: the quarterly Form 941, the annual Form 940 for FUTA, and the W-2s at year end. Each must agree with the others and with the books, and when they don't, the notice arrives a year later.

| Form | What it reports | Due | Northwind's |
| --- | --- | --- | --- |
| [Form 941](https://lopifi.com/md/glossary/form-941) | Each quarter's wages, income tax withheld and both halves of FICA, against the deposits | April 30, July 31, October 31, January 31 — the 10th of the next month if every deposit was on time | Q3: November 2, 2026 |
| [Form 940](https://lopifi.com/md/glossary/form-940) | The year's FUTA, with Schedule A for a credit-reduction state | January 31 — February 10 if all FUTA was deposited on time | February 1, 2027 |
| [Form W-2](https://lopifi.com/md/glossary/form-w-2) and [W-3](https://lopifi.com/md/glossary/form-w-3) | Each employee's wages and withholding for the year; the W-3 totals them for the SSA | January 31, to employees and the SSA. No automatic extension | February 1, 2027 |

Northwind's federal payroll returns for its first year.

> “File Form 941 and deposit any undeposited income, social security, and Medicare taxes. … If you timely deposited all taxes when due, you may file by May 10, August 10, November 10, or February 10, respectively.”

— [IRS Pub. 15 (2026), Calendar](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF), Form 941 is quarterly: April 30, July 31, October 31, January 31

*[Figure: form 941]*

Northwind's Q3 2026 Form 941: one month of wages, $2,335.20 of tax, deposited in full.

October 31, 2026 is a Saturday, so Northwind's first 941 is due Monday, November 2, 2026. It deposited September's tax on time, so it may file as late as November 10, 2026. Its fourth-quarter 941, its 940 and the W-2s all fall on the same day: Monday, February 1, 2027, because January 31, 2027 is a Sunday.

> “The due date for filing 2026 Forms W-2, W-2AS, W-2CM, W-2GU, W-2VI, W-3, and W-3SS with the SSA is February 1, 2027, whether you file using paper forms or electronically.”

— [General Instructions for Forms W-2 and W-3 (2026)](https://www.irs.gov/pub/irs-pdf/iw2w3.pdf) (PDF), Forms W-2 and W-3 for 2026 wages are due February 1, 2027

- **November 2, 2026** — Q3 return (941)
- **February 1, 2027** — Q4 return — $6,682.50 of tax (941)
- **February 1, 2027** — FUTA for the year — $84, paid with the return (940)
- **February 1, 2027** — To each employee and to the SSA (W-2, W-3)

The payroll returns for 2026 wages.

Northwind's FUTA never passes $500 in a quarter — $50.40 after Q3, $84 after Q4 — so it's never deposited during the year and the whole $84 is paid with Form 940.

> “A state that hasn’t repaid money it borrowed from the federal government to pay unemployment benefits is called a credit reduction state. The U.S. Department of Labor determines these states.”

— [Instructions for Form 940 (2025)](https://www.irs.gov/pub/irs-pdf/i940.pdf) (PDF), Credit reduction states

## The first W-2s

| Employee | Box 1 wages | Box 2 income tax | Box 3 Social Security wages | Box 4 | Box 5 Medicare wages | Box 6 | Box 12, code DD |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Priya Shah | 22,612.50 | 3,551 | 22,612.50 | 1,401.99 | 22,612.50 | 327.88 | 1,950 |
| Marcus Lee | 10,012.50 | 475 | 10,012.50 | 620.79 | 10,012.50 | 145.19 | 1,950 |

Northwind's 2026 Forms W-2: September's paycheck and three months after the health premium came out pre-tax.

Boxes 1, 3 and 5 are not the salaries. Each is $487.50 below what Priya Shah and Marcus Lee were paid, because the premium taken out under the cafeteria plan from October is in none of the three wage bases. With no 401(k), the three boxes agree; a traditional 401(k) deferral would come out of box 1 and stay in boxes 3 and 5. [Form W-2](https://lopifi.com/md/glossary/form-w-2) box 12, code DD, reports the cost of employer-sponsored health coverage — employer's and employee's shares together, $1,950 each for 3 months of cover. It isn't taxable, and an employer that filed fewer than 250 Forms W-2 for the year before is under transition relief that makes it optional. Northwind may leave it off.

> “Code DD—Cost of employer-sponsored health coverage. Use this code to report the cost of employer-sponsored health coverage. The amount reported with code DD is not taxable.”

— [General Instructions for Forms W-2 and W-3 (2026), Box 12 — Code DD](https://www.irs.gov/pub/irs-pdf/iw2w3.pdf) (PDF), Box 12, code DD: the cost of employer-sponsored health coverage

> “In general, the amount reported should include both the portion paid by the employer and the portion paid by the employee.”

— [IRS, Form W-2 Reporting of Employer-Sponsored Health Coverage](https://www.irs.gov/affordable-care-act/form-w-2-reporting-of-employer-sponsored-health-coverage), Code DD is optional for an employer that filed fewer than 250 Forms W-2 the year before

1. **Pull the quarter's register.** Every payday's gross, withholding and net, footed, for the quarter.
2. **Tie the 941 to the register.** Lines 2, 3, 5a and 5c are the register's totals. Anything paid outside payroll — a bonus wired by a founder, a manual check — is missing until someone adds it.
3. **Tie the deposits to EFTPS.** Line 13 should equal what EFTPS shows was deposited for the quarter.
4. **Tie the books to both.** The balance in payroll liabilities after the quarter's deposits should be the last month's tax, deposited next month, and nothing older.
5. **Approve and file.** In the provider's portal or by e-file, before the due date.

Closing a payroll quarter, with or without a provider.

At year end the W-3's totals should equal the four quarters' 941s — wages, Social Security and Medicare wages, and income tax withheld. States run alongside: withholding returns and W-2 copies where the state has an income tax, and unemployment wage reports, each on the state's own calendar. The [compliance calendar](https://lopifi.com/md/learn/startup-annual-compliance-calendar) lays them beside the federal ones.

**Wrong:** The provider files the 941, so it must be right.

**Right:** Each quarter, tie the 941 to the register, the deposits to EFTPS and the books to both.

The provider prepares the returns from what it was told. Reconciling them to the books is the company's job.

> **Form 941 every quarter, Form 940 and the W-2s by January 31 — and every one ties to the register, the deposits and the payroll liabilities in the books.**

In this lesson: **Form 941, line by line**, filled in from Northwind's register.

## Pages in this lesson

- [Form 941, line by line](https://lopifi.com/md/learn/payroll-tax-returns/form-941-line-by-line) — 5 min. How do I fill out Form 941?

## Where this lesson's rules come from

- [IRS Pub. 15 (2026), Calendar](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF) — Form 941 is quarterly: April 30, July 31, October 31, January 31 (irs)
- [Form 941 (Rev. March 2026)](https://www.irs.gov/pub/irs-pdf/f941.pdf) (PDF) — Form 941, Employer's QUARTERLY Federal Tax Return (form)
- [Instructions for Form 941 (Rev. March 2026)](https://www.irs.gov/pub/irs-pdf/i941.pdf) (PDF) — Instructions for Form 941 (irs)
- [Form 940 (2025)](https://www.irs.gov/pub/irs-pdf/f940.pdf) (PDF) — Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return (form)
- [Instructions for Form 940 (2025)](https://www.irs.gov/pub/irs-pdf/i940.pdf) (PDF) — Credit reduction states (irs)
- [Form W-2 (2026)](https://www.irs.gov/pub/irs-pdf/fw2.pdf) (PDF) — Form W-2, Wage and Tax Statement (form)
- [General Instructions for Forms W-2 and W-3 (2026)](https://www.irs.gov/pub/irs-pdf/iw2w3.pdf) (PDF) — Forms W-2 and W-3 for 2026 wages are due February 1, 2027 (irs)
- [General Instructions for Forms W-2 and W-3 (2026), Box 12 — Code DD](https://www.irs.gov/pub/irs-pdf/iw2w3.pdf) (PDF) — Box 12, code DD: the cost of employer-sponsored health coverage (irs)
- [IRS, Form W-2 Reporting of Employer-Sponsored Health Coverage](https://www.irs.gov/affordable-care-act/form-w-2-reporting-of-employer-sponsored-health-coverage) — Code DD is optional for an employer that filed fewer than 250 Forms W-2 the year before (irs)
- [IRS Pub. 15-B (2026), §1 Cafeteria Plans; §2 Table 2-1](https://www.irs.gov/pub/irs-pdf/p15b.pdf) (PDF) — Employer's Tax Guide to Fringe Benefits (irs)

## Read further

- https://lopifi.com/md/startups/form-941-and-payroll-tax-deposits
- https://lopifi.com/md/startups/w2-year-end-for-startups
- https://lopifi.com/md/startups/startup-tax-deadlines-by-month

- **Track:** [Payroll](https://lopifi.com/md/learn/payroll)
- **Lesson:** Lesson 5 of 8 — 10 min
- **Terms taught:** [Form 941](https://lopifi.com/md/glossary/form-941), [Form 940](https://lopifi.com/md/glossary/form-940), [Form W-2](https://lopifi.com/md/glossary/form-w-2), [Form W-3](https://lopifi.com/md/glossary/form-w-3)
- **Previous:** [The semiweekly deposit schedule, Payroll · Lesson 4](https://lopifi.com/md/learn/payroll-tax-deposits/semiweekly-deposit-schedule)
- **Next:** [Form 941, line by line](https://lopifi.com/md/learn/payroll-tax-returns/form-941-line-by-line)
- **The course:** https://lopifi.com/md/learn