Glossary  /  Audit basics

Form 941

Also called quarterly federal tax return, 941

Form 941 is the quarterly federal tax return on which an employer reports wages paid and payroll taxes withheld, and it is the document a premium audit reconciles payroll reports against.

The 941 matters at audit because it was filed with the IRS rather than produced for the audit. When a payroll summary and the corresponding 941s agree, the payroll figure is established. When they disagree, the difference is what gets investigated.

Filings are quarterly and follow the calendar, so the set an audit needs depends on which calendar quarters the policy period touches.

Why it matters at audit

These are usually the hardest documents to produce, because they sit with an accountant or payroll provider rather than in the business's own files. Requesting them first shortens the whole audit.

Related terms

  • Policy periodThe policy period is the span of dates a workers' compensation policy covers, and it is the window every figure in a premium audit must be drawn from.
  • Audit basisThe audit basis is the final payroll figure, by class code, that premium is calculated against once inclusions and exclusions have been applied.

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