As an employer, you have to file a quarterly Form 941 to report your employees’ wages and withholding. What if you paid no wages for a quarter though? Some employers only have employees for a short portion of the year, maybe during harvest time, or beach season. Other employers forgo having employees for a portion of the year. Some examples are landscape and construction companies in areas that experience a true winter. Normally the IRS requires that a 941 be filed no matter what. That means filing a zero tax return for a quarter where no wages were paid.
However, seasonal employers don’t have a Form 941 for quarters where no wages have been paid and therefore no tax liability accrued. You will find a line on Form 941 that lets you check a box noting that you are a seasonal employer and thus will not have to file a return for every quarter of the year.
The preprinted label on Form 941 doesn’t include the date the quarter ended. You need to enter it yourself when you file the return. The IRS doesn’t inquire about unfiled returns if at least one taxable return is filed each year. However, you need to check the seasonal employer box on every Form 941 you file.
There are more detailed rules on farm laborers and the difference between independent contractors and employees, which can affect the need to file a 941.
You are required to keep good records so that you can file accurate returns. The IRS reserves the right to come check your records to make sure that you didn’t actually have wages for a quarter for which you didn’t file. It’s a good idea to keep all receipts, payment information and tax data in one location to make filing your taxes easier. At the end of the day, the IRS doesn’t care how casual or irregular your hiring practices are, but your record keeping must be clear and you must follow all the rules.
