IRS revises Form 941 mid-year due to the coronavirus

Your company’s payroll process looks different this year thanks to the coronavirus, so naturally so does Payroll’s key tax form: the 941.

IRS has released a draft of the revised Form 941 because of new coronavirus-related employment tax credits and other tax relief.

One of the biggest mid-year changes: Line 13 now contains seven lines (Line 13a through Line 13g). And heads up: There’s the potential for confusion in these lines, IRS revealed in its May Payroll Industry Call.

What Payroll needs to know

Here are some additional ways Line 13 has expanded based on the April 2020 draft of the 941:

• 13a – total deposits for this quarter, including overpayment applied from a prior quarter and overpayments applied from amended forms filed in the current quarter
• 13b – deferred amount of employer share of Social Security tax
• 13c – refundable portion of credit for qualified sick and family leave wages from Worksheet 1, and
• 13d – refundable portion of employee retention credit from Worksheet 1.

IRS will keep taking comments on the revised Form 941 and its instructions. But the process is moving forward quickly. The Service has already received many questions on Line 13b, so you and your Payroll team can probably expect updated wording related to that line.

Need more information?

Premier Learning Solutions is offering a workshop, IRS Form 941 Changes Due to COVID-19 Tax Relief.

Live event: Monday, July 27, 2020 at 1PM (ET). Also available on-demand

Some of the topics it covers include:

• Coronavirus-related tax credits and relief you need to know (Employee Retention Tax Credit, Credit for Sick and Family Leave, and more)
• How to use 941-X forms to correct previously filed 941 forms
• Requirements and tips to accurately file Schedule B
• How to use form 7200 to get an advance payment of COVID-19 credits
• Reconciliation of form 941 and W-2s at year-end.

The speaker is Dayna Reum, who has been heavily involved in the payroll field for nearly two decades and is currently the Director of Payroll Operations at a major medical center in Chicago. She serves on the National American Payroll Association on the National Strategic Leadership Task Force, Government Affairs Task Force (PA Local tax subcommittee), and has received a Citation of Merit for her service along with being a Gold Pin member of the APA.

Click here for registration and more information.