Utah State Tax Commission
Withholding Tax Workshop
- Section 4 – Year-End Reporting
Year-End Reporting
Additional information on year-end reporting for withholding tax can be found in Publication 32, Online Filing and Paying of Withholding and Mineral Production Taxes.
As you will recall, ABC Stores files quarterly and pays monthly. The owner, Bob, has filed four 2010 quarterly returns and is ready to close out the tax year. He has verified that the amounts reported and paid on the returns match the total 2010 withholding for his two employees. The quarterly amounts are:
Quarter |
Amount Paid |
January - March |
$186.00 |
April - June |
$186.00 |
July - September |
$186.00 |
October - December |
$186.00 |
Total Withholding Reported and Paid |
$744.00 |
Bob prints his employees' W-2, Wage and Tax Statements.
The total amount of Utah income withheld is the sum of each amount in block 17 of the employee W-2s. For our example: $384 + $360 = $744. This amount agrees with the amounts reported on ABC's four quarterly returns. The verified amount of $744 will be transferred to the annual reconciliation return.
Annual Reconciliation
The next step is to prepare the annual reconciliation return, TC941R, Utah Annual Withholding Reconciliation.
Paper Return
When filing on paper, the reconciliation report is due by February 28. If February 28, falls on a weekend or holiday, the return is due the next business day. ABC's completed form is shown below:
Things to remember:
- Line 1 is the total number of withholding documents. Since Bob has two employees, he enters a 2 on this line.
- Line 2 is the total Utah wages reported on the two employees' W-2s, block 15 ($15,000 + $19,200 = $34,200).
- Line 3 is the total of the federal withholding tax reported on each employee's W-2.
- Line 4 is the total amount of Utah withholding tax reported on the employees' W-2s ($744).
- Boxes 5a-5d are the Utah withholding tax amounts reported on each quarterly return. Caution: The sum of the income tax from the W-2s must agree with the amount of withholding tax reported on the quarterly returns.
- Add the amounts on boxes 5a-5d and enter them on line 6.
- Subtract line 6 from line 4 and enter the amount on line 7.
If the sum of the amounts reported on the quarterly returns do not agree with the W-2's, you must find the error and make a correction. If the annual reconciliation:
- has not been filed, you can submit an amended quarterly return (TC941).
- has been filed, submit an amended reconciliation return (TC941R).
There is a $1,000 penalty for not filing the reconciliation return and W-2s.
The reconciliation return is due to the Tax Commission on February 28. However, it may be more convenient to file it at the same time you distribute the W-2s to your employees. This will prevent you from forgetting to file the return later.
If an employer changes business entities during the tax year, the withholding license for the old entity must be closed and a new license opened for the new entity. When this happens, a reconciliation return and W-2s must be submitted separately for each entity or a TC-941D, Discrepency Report For Annual Withholding Reconciliation, may be filed to explain the discrepency.
Online Return
Annual W-2 information and TC941R reconciliation returns can be filed online at taxexpress.utah.gov. Electronic filing is free, easy to use, available 24/7, and eliminates the need to prepare and mail paper submittals. Electronically filed annual reconciliation reports are due March 31. If March 31, falls on a weekend or holiday, the return is due on the next business day.
See Publication 32, Online Filing and Paying of Withholding and Mineral Production Taxes, call 801-297-7626 (1-800-662-4335 x7626 toll free), or email emedia-wt@utah.gov for more information.
