About Schedule R for
IRS Form 941

Who Must File Schedule R for Form 941?

You must complete Schedule R (Form 941) each time you file an aggregate Form 941, Employer's Quarterly Federal Tax Return. Aggregate Forms 941 are filed by agents approved by the IRS under section 3504 and Certified Professional Employer Organizations (CPEOs). Government and Vendor Fiscal/Employer Agents that operate in self direction (also known as participant direction and donsumer direction) programs operate under Section 3504 of the Internal Revenue Code and must file a Schedule R with their aggregate Form 941. Similarly, a CPEO must attach Schedule R to its aggregate Form 941. To become a CPEO, the organization must apply through the IRS Online Registration System. Visit the IRS website at www.irs.gov/cpeo for more information. We do NOT expect that entities that serve self direction programs will be CPEOs.

Purpose of Schedule R for Form 941

Use Schedule R (Form 941) to allocate the aggregate information reported on Form 941 to each of your clients. For purposes of Schedule R (Form 941), the term “client” means, “(a) an ‘employer or payer’ identified on the Form 2678, Employer/Payer Appointment of Agent; (b) a customer who enters into a contract that meets the requirements under section 7705(e)(2); or (c) a client who enters into a service agreement described under Regulations section 31.3504-2(b)(2) with a CPEO.”

If the agent has 10 or more employer clients, complete as many Continuation Sheets for Schedule R as necessary. Attach Schedule R (Form 941), including any Continuation Sheets, to the aggregate Form 941.

When Must Schedule R for Form 941 be filed?

Schedule R is due with Form 941 for each quarter that an agent files an aggregate Form 941, beginning with Quarter 1, 2017.

Agents may file Form 941 and Schedule R electronically or by paper submission. CPEOs generally must file Form 941 and Schedule R electronically. For more information about a CPEO's requirement to file electronically, see: http://www.irs.gov/irb/2017-03_IRB/ar14.html

For more information on Schedule R (Form 941) see: https://www.irs.gov/pub/irs-pdf/f941sr.pdf