How do I reconcile Payroll tax forms & reports?

This information is provided as a guide to print the reports that will assist you in reconciling your quarterly and annual payroll tax amounts. Sage Support does not assist in reconciling the amounts for you.

The following reports (at a minimum) should be used to assist in reconciling the amounts reported on your payroll tax forms (i.e. 941, W3 forms):

• Employers Expense Summary - printed during each payroll run (must be printed before updating the check register)
• Quarterly Tax Report - printed before processing period end (Note: in Sage 100 Payroll 2018 and higher, this report is available to print after closing a quarter, as long as appropriate Years to Retain is set in Payroll Options)
• Deduction Reports - printed before processing period end (Note: in Sage 100 Payroll 2018 and higher, this report is available to print after closing a quarter, as long as appropriate Years to Retain is set in Payroll Options)
• Employee Retention Credit Worksheet - print at the end of the quarter to assist in completeing the 941 Worksheet (these credits are only applicable for 2020 tax year, starting with 2nd quarter)
• Emergency Leave Worksheet - print at the end of each quarter to assist in completeing the 941 Worksheet (these credits are only applicable for 2020 tax year, starting with 2nd quarter)
• Quarterly Unemployment Report - print at the end of each quarter to assist in completeing the 941 (this report is only available in Sage 100 Payroll 2.20.3 and higher) **See related article below for information on this report.

Important Note: Please refer to all Related Articles below for additional details and changes to these reports in Version 2018 (6.00) Payroll 2.x

Reconciling Forms 941 and Form W-3

Per the IRS Form 941 Instructions, About Form 941

The IRS matches amounts reported on your four quarterly Forms 941 with Form W-2 amounts totaled on your yearly Form W-3, Transmittal of Wage and Tax Statements. If the amounts do not agree, you may be contacted by the IRS or the Social Security Administration (SSA). The following amounts are reconciled:

• Federal income tax withholding (941-line 3, W3-box 2)
• Social security wages (941-line 5a column 1, W3-box 3)
• Social security tips (941-line 5b column 1, W3-box 7)
• Medicare wages and tips (941-line 5c column 1, W3-box 5)

For more information, see section 12 of Pub. 15 (Circular E) and the Instructions for Schedule D (Form 941) on the IRS website at www.IRS.gov

Watch: IRS Video - 10 Minutes on Reconciling Forms 941/W-3/W-2 to Gross Payroll

Where do amounts on the 940 form Part 5, Lines 16a - 16d (FUTA tax liability) pull from

• The amounts on 940 form Part 5, Lines 16a - 16d pull from the Federal Unemployment Insurance line shown on each Employer Expense Summary reports (totaled up by quarter)

Note: If there are pension &/or cafeteria plan deduction codes setup to reduce State Unemployment wages those amounts will be reflected in these totals based on the Tax Rules selected. Please contact a tax advisor or state agency to determine if your pension &/or cafeteria plans qualify to reduce State Unemployment wages.