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How do you break down taxes in 941Q between Box 3 (Federal Income Tax Withheld) and Boxes 5a-5e?

I'm the sole employee of an S Corporation trying to ensure that the corporation is paying Social Security and Medicare correctly.

 

I think I understand that Federal Social Security is 12.4%, Medicare 2.9% (until an income threshold is reached) and that both are split HALF between the employee (through federal income tax withholding)  and HALF the employer (through Social Security and Medicare taxes).

 

It that is true, why on the quarterly 941 are the boxes like this:

 

5a Taxable social security wages:  wage x 0.124

5c Taxable Medicare wages & tips: wage x 0.029

 

Shouldn't they be HALF that amount, because the other HALF is paid through the employee's Federal income tax withheld) line 3? 

 

In other words, if the employer pays 12.4% of wages towards Social Security and 2.9% towards Medicare in lines 5a-5e, isn't that overpaying, paying double the amount necessary?  They should be paying half that amount, the other half coming from Federal income tax withheld.

 

I must understand it incorrectly.

 

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1 Reply
ThomasM125
Expert Alumni

How do you break down taxes in 941Q between Box 3 (Federal Income Tax Withheld) and Boxes 5a-5e?

In box 3 on the Form 941, you enter the income tax withheld from the employee only, not the FICA and Medicare tax. It is true the employee pays half of the payroll taxes, but they get reported in boxes 5a and 5c, both the employer and employee half.

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