Drake Accounting®: Why does Line 1 of Form 941 show fewer employees than the employer actually has?
An employee is counted for Line 1 of Form 941 if the employee has had at least one paycheck with a pay period range that includes the 12th day of the third month of the selected quarter (March 12th for Q1, June 12th for Q2, Sept 12th for Q3, and December 12th for Q4). Line 1 does not take into account the check date, and it will only take into account the pay period beginning and end dates to determine if the employee should be included in the employee count. See the instructions on Line 1:
Even if the employee is not counted on line 1, all paychecks with a check date on or before the end of the quarter will be added to line 2, Wages, Tips and other compensation.
See Form 941 Instructions for further information.
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