Form 941
Form 941 is the quarterly federal return that reports wages, federal income tax withholding, and Social Security and Medicare taxes to the IRS.
Every quarter, some entity files a Form 941 covering your employees’ wages. Outside a PEO, that entity is you. Inside a PEO, the answer depends on the arrangement: a certified PEO (CPEO) files under its own EIN for worksite employees, while a non-certified PEO may file under its EIN, under yours, or as a Section 3504 agent. Which EIN appears on the 941 determines whose account the IRS credits and who the IRS pursues first if deposits go missing.
Ask a candidate PEO which entity and EIN will appear on the 941 for your employees, and whether your company will be listed on Schedule R, the allocation schedule that aggregate filers attach to break out each client’s share. After joining, request the Schedule R excerpt or a filing confirmation each quarter rather than assuming the return was filed. Employers have learned only from an IRS notice that a provider stopped remitting.