What are the purposes of Form 941 Schedule B and Form 940 in payroll compliance?

• A. Schedule B (Form 941) tracks liabilities by deposit schedule; Form 940 reports FUTA unemployment taxes.
• B. Schedule B lists employees; Form 940 handles state unemployment taxes.
• C. Schedule B is for corporate income; Form 940 handles payroll tax deposits.
• D. Schedule B tracks duration of unemployment; Form 940 tracks employee benefits.

Answer: (A)

Understanding how payroll taxes are tracked by period and tax type helps explain these forms. Schedule B on Form 941 is a supplemental schedule that records your tax liabilities by the deposit period, showing how much you owed for each period and when those amounts were due to be deposited. This helps ensure your deposits are timely and reconciled with the quarterly Form 941 totals for Social Security, Medicare, and federal income tax withholding. Form 940, the Employer’s Annual Federal Unemployment Tax Return, is the yearly report of FUTA taxes owed (and credits for state unemployment taxes, if applicable). It serves as an annual recap separate from the quarterly 941 filing.

So the correct combination is that Schedule B tracks liabilities by deposit period, while Form 940 reports FUTA unemployment taxes. The other options mix up responsibilities—for example, Form 940 does not handle state unemployment taxes, Schedule B does not list employees, and it isn’t about corporate income or durations of unemployment.