IRS: Form 941 reporting changes starting with Q2 2022

As the tax relief programs implemented by the American Rescue Plan Act continue to expire, it’ll have an impact on your Form 941 reporting to IRS starting with the second quarter of 2022.

IRS has released revised editions of:

• Form 941, Employer’s Quarterly Federal Tax Return, plus revised instructions
• instructions for Schedule B, Report of Tax Liability for Semiweekly Schedule Depositors
• Schedule R, Allocation Schedule for Aggregate Form 941 Filers, plus revised instructions, and
• Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund, plus instructions.

Note that the new Schedule B instructions and Schedule R and its instructions are drafts. This means they’re subject to revision and final approval by the Office of Management and Budget before their official release.

What Finance needs to know about Form 941

Last updated in March for use in the first quarter of 2022 only, the current 941 and its instructions are to be used for the second (due August 1), third (due October 31) and fourth (due Jan. 31, 2023) quarters of 2022. To avoid possible processing delays and/or IRS penalties, you’ll need to start using the new forms right away.

The first thing you’ll notice is that lines 11e, 11f and 13f, which were for reporting information related to the COBRA Premium Assistance Credit, have been removed. These lines are now officially “reserved for future use.” This signifies that the COBRA Premium Assistance Credit will no longer be available.

The Service also eliminated Worksheet 3, which employers had used to calculate the credit.

As a result, here’s what else is different:

• Line 11g is for the total nonrefundable credits from adding lines 11a, 11b and 11d.
• Line 13g is for the total deposits and refundable credits from adding lines 13a, 13c and 13e.

Effective April 2022, the new Form 941-X instructions apply to all years for which the statute of limitations on corrections hasn’t expired.