Quarterly Wage and Tax Report Requirements Explained

Gabrielle Sinacola | Jul 1, 2024

Quarterly Wage and Tax Report Requirements Explained

As a business owner, you’re responsible for keeping track of many key compliance issues. Each type of report has different requirements and due dates. The Quarterly Wage and Tax Report is an essential compliance matter that significantly impacts your ability to run your business.

Filing a quarterly wage report, meeting unemployment tax requirements, and making a regular quarterly contribution to every mandatory tax account can be challenging, but Mosey is here to make things easier. Here’s what you need to know about quarterly wage report requirements and how we can help you stay compliant.

What Is a Quarterly Wage and Tax Report?

A Quarterly Wage and Tax Report is a mandatory document that employers use to report total wages, taxable wages, excess wages, payroll tax, and tax withholding information on all wages they’ve paid to their employees that quarter. Employers are required to file this report with all state and local tax reporting authorities at the end of every tax quarter.

The information in a Quarterly Wage and Tax Report is used to verify compliance with the State Unemployment Tax Act (SUTA) and Federal Unemployment Tax Act (FUTA) by ascertaining that employers are up to date with state unemployment insurance by paying their UI tax.

In short, this document shows the flow of money from employer to employee. The document focuses on the employee’s compensation and contributions or taxes the employer makes on an employee’s behalf. It acts as verification for an employer’s quarterly wage-related expenses.

Who Has To File a Quarterly Wage and Tax Report?

If you’re a sole proprietorship or if you only work with independent contractors, you wouldn’t need to pay unemployment insurance, payroll tax, or workers’ compensation contributions.

All of your income is legally perceived as belonging exclusively to you, and you don’t have to write an official paycheck for yourself. Therefore, you won’t be required to file a quarterly wage and tax report.

Any employer who is required to comply with unemployment insurance requirements must file a quarterly wage and tax report. If you have an employer identification number (EIN) or a federal tax identification number, you are considered an employer for tax purposes.

Even if you don’t have any employees, you’re still required to complete the report. You must also complete the report even if you don’t have any employment taxes due.

There are exceptions for certain types of employees, especially domestic employees who perform limited duties and don’t exceed a specific wage threshold. For example, if you hire a gardener, caregiver, chef, or babysitter, you may not need to consider this person an employee for tax purposes.

Check your state’s laws for specific laws regarding which type of help or gig workers would qualify as employees.

Are Quarterly Wage and Tax Reports a State or Federal Requirement?

Quarterly Wage and Tax Reports are both a state and federal requirement. You need to report federally required information in addition to information required by your state. You may be subject to taxes or specific requirements not detailed under federal law. You must abide by both sets of rules when preparing your Quarterly Wage and Tax Report.

You’re required to complete IRS Form 941, Employer’s Quarterly Federal Tax Return, to satisfy federal tax compliance. You may also be required to file state specific forms. Requirements will vary depending on the state in which your business is registered. It’s best to check with your state’s Department of Revenue for specific instructions regarding documenting tax or mandatory insurance contributions.

When Are Quarterly Wage and Tax Reports Due?

Quarterly means “four times a year.” The government doesn’t necessarily use the calendar year to set fiscal deadlines.

Rather than a traditional calendar quarter for due dates, the IRS uses fiscal reporting quarters that give employers additional time to report financial information after the end of a calendar quarter:

  • April 30
  • July 31
  • October 31
  • January 31

You have one month from the end of the calendar quarter to complete and submit your quarterly wage and tax report. The final due date, January 31, reports for the last quarter of the previous year.

If you don’t owe any taxes, the IRS will award you an additional ten-day grace period after the due date for filing. If you do owe taxes, you must file in a timely manner and meet your tax obligations before the due date.

The IRS may grant extensions under certain circumstances. If you believe you may need an extension, it’s best to request one as soon as possible. If you request an extension and you don’t qualify for one, you won’t be forgiven for filing late. It’s better to have an extension you didn’t need than to need an extension you didn’t have.

What Should a Quarterly Wage and Tax Report Include?

A Quarterly Wage and Tax Report should include all total taxable employee wages. Your employees pay a portion of their social security and Medicare taxes. Your Quarterly Wage and Tax Report will verify that you’ve paid your portion of those taxes.

Key additional information like income tax, unemployment insurance contributions, and workers’ compensation contributions will demonstrate to the IRS that you’re meeting the requirements of your responsibilities.

It’s important to include an employee’s social security number (SSN). The SSN is used to verify that contributions were made appropriately. This becomes essential when an employee becomes eligible to collect a social security benefit, worker’s compensation, or unemployment benefits.

The information on your report will be used to verify your quarterly contribution, tax due, or overpayment. A small overpayment is usually better than an underpayment, which is why many employees strategically calculate quarterly payments to avoid falling short.

What To Do Before You File Your Quarterly Wage and Tax Report

If you’ve never filed a Quarterly Wage and Tax Report before, verify that you have established an employer account with all required government agencies and insurance systems. Your account number is used to verify any contributions you’ve claimed in your report.

It’s a wise business decision to establish these contribution accounts at the moment your business begins, but if you haven’t yet, it isn’t too late. As long as your first quarterly taxes are paid and contributions are made before the first quarterly due date since you’ve established your business, you won’t encounter any noncompliance issues.

How Do You File Your Quarterly Wage and Tax Report?

Your state will provide a quarterly wage and tax report form that you can use to report required information. Filers can usually submit their reports via file upload to their state’s Department of Revenue. If you prefer to file by mail, your state’s Department of Revenue will list a mailing address for paper forms. The IRS will accept your quarterly tax form report file online or via their P.O. box address.

Keep in mind that it’s difficult to guarantee that forms sent by mail will be received on time, especially if they’re mailed close to their due date. Every legal holiday and non-delivery day, like Sunday, can increase the time it will take your reports to reach their intended recipients. Filing electronically guarantees timely delivery, even if the forms aren’t processed immediately. When you submit your information online, it’s technically received the moment you upload the file.

What Are the Penalties If You Don’t File Your Quarterly Wage and Tax Report?

Failing to file a Quarterly Wage and Tax Report can be a serious non-compliance issue. The IRS strictly enforces deadlines, but they may extend deadlines for certain eligible circumstances. For example, if your business suffers a significant disaster, you can alert the IRS and ask for more time to prepare documents. If you’re granted an extension, you won’t face penalties.

Filing late is usually punishable by tax penalty. You’ll spend more money meeting tax obligations if you don’t file and pay owed taxes on time. If your failure to file a report is deemed negligent or willful, consequences can be more severe.

Mosey Is Here To Help With State Business Compliance

Business owners have many monthly, quarterly, and annual compliance requirements to keep track of. You’re working hard to help your business grow, expand, and innovate. Let Mosey work in the background to keep you on track with compliance.

Our compliance automation platform tracks key state and local business compliance matters and walks you through the process of completing compliance tasks. Schedule a demo with Mosey to learn how we can help you stay on top of it.

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