The deferred amount of the employer share of social security tax was only available for deposits and payments due on or after March 27, 2020, and before January 1, 2021, as well as deposits and payments due after January 1, 2021, that were required for wages paid during the quarter ending on December 31, 2020. Instead, file Form 941 for each of those quarters. We need it to figure and collect the right amount of tax. To claim the Employee Retention Credit as a refund on Form 941-X: a. You'll also use this worksheet to figure this credit if youre claiming it for the first time on Form 941-X. Attach a Form 941-X to each Form 941. Qualified Health Plan Expenses Allocable to Qualified Sick Leave Wages for Leave Taken After March 31, 2020, and Before April 1, 2021, 29. Multiply line 2e(ii) by 1.45% (0.0145). You may need to check more than one box. Multiply line 2a(iv) by 6.2% (0.062), Qualified family leave wages for leave taken after March 31, 2021, and before October 1, 2021, reported on Form 941, Part 3, line 26, or, if corrected, the amount from Form 941-X, line 38, column 1, Qualified family leave wages included on Form 941, Part 3, line 26, or, if corrected, the amount from Form 941-X, line 38, column 1, that were not included as wages reported on Form 941, Part 1, lines 5a and 5c, or, if corrected, the amount from Form 941-X, lines 8 and 12, column 1, because the qualified family leave wages were excluded from the definition of employment under sections 3121(b)(1)(22), Qualified family leave wages included on Form 941, Part 3, line 26, or, if corrected, the amount from Form 941-X, line 38, column 1, that were not included as wages reported on Form 941, Part 1, line 5a, or, if corrected, the amount from Form 941-X, line 8, column 1, because the qualified family leave wages were limited by the social security wage base, Qualified health plan expenses allocable to qualified family leave wages for leave taken after March 31, 2021, and before October 1, 2021, reported on Form 941, Part 3, line 27, or, if corrected, the amount from Form 941-X, line 39, column 1, Amounts under certain collectively bargained agreements allocable to qualified family leave wages for leave taken after March 31, 2021, and before October 1, 2021, reported on Form 941, Part 3, line 28, or, if corrected, the amount from Form 941-X, line 40, column 1, Employer share of social security tax on qualified family leave wages. Get a Form for Every Quarter You Want to Amend 3. See Notice 2021-65 for modifications to Notice 2021-49. Multiply line 2g(ii) by 1.45% (0.0145), Enter any credit claimed under section 41 for increasing research activities with respect to any wages taken into account for the credit for qualified sick and family leave wages. box address. Proc. Enter the amount of Medicare wages from Form 941, Part 1, line 5c, column 1, or, if corrected, the amount from Form 941-X, line 12, column 1, If you're a third-party payer of sick pay that isn't an agent and you're claiming credits for amounts paid to your employees, enter the employer share of Medicare tax included on Form 941, Part 1, line 8, or, if corrected, the amount of the employer share of Medicare tax on sick pay that you included on Form 941-X, line 15, column 1 (enter as a, Employer share of Medicare tax included on Form 941-X, line 21, column 4, If you received a Section 3121(q) Notice and Demand during the quarter, enter the amount of the employer share of Medicare tax from the notice, Qualified sick leave wages for leave taken after March 31, 2021, and before October 1, 2021, reported on Form 941, Part 3, line 23, or, if corrected, the amount from Form 941-X, line 35, column 1, Qualified sick leave wages included on Form 941, Part 3, line 23, or, if corrected, the amount from Form 941-X, line 35, column 1, that were not included as wages reported on Form 941, Part 1, lines 5a and 5c, or, if corrected, the amount from Form 941-X, lines 8 and 12, column 1, because the qualified sick leave wages were excluded from the definition of employment under sections 3121(b)(1)(22), Qualified sick leave wages included on Form 941, Part 3, line 23, or, if corrected, the amount from Form 941-X, line 35, column 1, that were not included as wages reported on Form 941, Part 1, line 5a, or, if corrected, the amount from Form 941-X, line 8, column 1, because the qualified sick leave wages were limited by the social security wage base, Qualified health plan expenses allocable to qualified sick leave wages for leave taken after March 31, 2021, and before October 1, 2021, reported on Form 941, Part 3, line 24, or, if corrected, the amount from Form 941-X, line 36, column 1, Amounts under certain collectively bargained agreements allocable to qualified sick leave wages for leave taken after March 31, 2021, and before October 1, 2021, reported on Form 941, Part 3, line 25, or, if corrected, the amount from Form 941-X, line 37, column 1, Employer share of social security tax on qualified sick leave wages. Any excess credit after . Check the box on line 4b to certify that your overreported amount is only for the employer share of taxes on those employees who you were unable to find or those who didnt give you a statement described on line 4a. If youre correcting the qualified sick leave wages you reported on Form 941, line 5a(i), column 1, enter the total corrected amount in column 1. For more information, including which process to select on lines 1 and 2, see Correcting an employment tax credit or social security tax deferral, later.. Report the correction of underreported and overreported tax amounts for the same tax period on a single Form 941-X, unless youre requesting a refund or abatement. See Is There a Deadline for Filing Form 941-X, earlier. Adjusted COBRA Premium Assistance Credit. Multiply this portion of column 3 by 0.009 (0.9% tax rate) to determine your tax correction. Use a separate Form 941-X for each Form 941 that youre correcting. Keep them for your records. For example, these instructions don't discuss who is eligible to claim the credit for qualified sick and family leave wages, the employee retention credit, or the COBRA premium assistance credit. That $10,000 represents the net change from corrections. In column 3, enter the difference between columns 1 and 2. The penalties of perjury statement should be located immediately above the required signature. Enter the corrected amount from column 1 on Worksheet 2, Step 2, line 2a, for qualified wages paid after March 31, 2020, and before July 1, 2021. ExampleQualified family leave wages decreased. Check the box on line 4a if your overreported amount includes each affected employee share of overcollected taxes. For overreported tax amounts, you may choose to either make an interest-free adjustment or file a claim for refund or abatement. You dont have to pay if the amount you owe is less than $1. The time needed to complete and file Form 941-X will vary depending on individual circumstances. Records related to qualified sick leave wages and qualified family leave wages for leave taken after March 31, 2021, and before October 1, 2021, and records related to qualified wages for the employee retention credit paid after June 30, 2021, should be kept for at least 6 years. 827, available at IRS.gov/irb/2021-06_IRB#NOT-2021-11. See, The deferred amount of the employee share of social security tax was only available for social security wages of less than $4,000 paid to an employee in any biweekly pay period (or the equivalent threshold amount for other pay periods) paid on a pay date during the period beginning on September 1, 2020, and ending on December 31, 2020. In column 3, enter the difference between columns 1 and 2. To correct the error, figure the difference on Form 941X as shown. The portion of the credit used against the employer share of social security tax is allowed in the first calendar quarter beginning after the date that the qualified small business filed its income tax return. File Form 941-X by October 31, 2022, and pay the amount you owe by the time you file. For Medicare taxes, use the employer rate of 1.45% plus 40% of the employee rate of 1.45%, for a total rate of 2.03% of wages. References to Form W-2 on Form 941-X and in these instructions also apply to Forms W-2AS, W-2CM, W-2GU, and W-2VI, unless otherwise noted. The employee retention credit may only be claimed on Form 941 filed for quarters beginning after March 31, 2020. If a discrepancy exists between the amount reported on Form 941 and the amount of advance payments issued, the IRS will generally correct the amount reported on Form 941, line 13f (13h), to match the amount of advance payments issued. Enter dollar amounts to the left of any preprinted decimal point and cents to the right of it. Qualified Health Plan Expenses Allocable to Qualified Sick Leave Wages for Leave Taken After March 31, 2021, and Before October 1, 2021, 37. Contain the name, address, and social security number (or truncated taxpayer identification number, when appropriate) of the employee; Contain the name, address, and EIN of the employer; Contain the tax period(s), type of tax, and the amount of tax for which the consent is provided; Affirmatively state that the employee authorizes the employer to claim a refund for the overpayment of the employee share of tax; For amounts collected in a prior year, include the employees written statement certifying that the employee hasnt made any previous claims (or the claims were rejected) and wont make any future claims for refund or credit of the amount of the overcollection; Be dated and contain the employees signature under penalties of perjury. In column 3, enter the difference between columns 1 and 2. You withheld $270 ($30,000 x 0.009) from Xavier's wages. For more information about the credit for qualified sick and family leave wages, go to IRS.gov/PLC. Use Form 941-X, line 13, to correct the error as shown below. The preferred method of payment is EFTPS. You can send us comments from IRS.gov/FormComments. Also check this box if the IRS (or you) determined that workers you treated as independent contractors or nonemployees should be classified as employees. If a prior year error was a nonadministrative error, you may correct only the wages and tips subject to Additional Medicare Tax withholding that were originally reported on Form 941, line 5d, column 1, or previously corrected on Form 941-X. Under the adjustment process, an employer can claim the credit against regular payroll tax due on its next Form 941 filing and then file the required Form 941-X to report the correction (see Form 941-X Instructions, (7/2021, pg. In column 2, enter the amount you originally reported or as previously corrected. This should ensure that the IRS will have enough time to process Form 941-X so the credit will be posted before you file Form 941, thus avoiding an erroneous balance due notice from the IRS. Select Create Form. Adjustments to qualified health plan expenses allocable to qualified sick leave wages and to qualified family leave wages for leave taken after March 31, 2020, and before April 1, 2021, are reported on Form 941X, lines 28 and 29, respectively. You cant file Form 941-X to correct federal income tax withheld reported on your 2021 fourth quarter Form 941 because the error involves a previous year and the amount previously reported for the employee represents the actual amount withheld from the employee during 2021. This COBRA premium assistance is available for periods of coverage beginning on or after April 1, 2021, through periods of coverage beginning on or before September 30, 2021. Whether you check the box on line 31b to tell us if you're eligible for the employee retention credit in the third or fourth quarter of 2021 solely because your business is a recovery startup business depends on its applicability and how you originally answered the question on Form 941, line 18b. The April 2020 revision and July 2020 revision of the Instructions for Form 941 were released before the COVID-related Tax Relief Act of 2020 was enacted on December 27, 2020; therefore, Worksheet 1, in those Instructions for Form 941, didn't include lines to add the wages that meet an exclusion under sections 3121(b)(1)(22) when figuring the credits for qualified sick and family leave wages. If your address has changed since you filed your Form 941, enter the corrected information and the IRS will update your address of record. For more information, see Credit for COBRA premium assistance payments is limited to periods of coverage beginning on or after April 1, 2021, through periods of coverage beginning on or before September 30, 2021 under Whats New. If youre correcting the refundable portion of the employee retention credit that you reported on Form 941, line 13d, for qualified wages paid after March 12, 2020, and before July 1, 2021, enter the total corrected amount from Worksheet 2, Step 2, line 2k, in column 1. If any line doesn't apply to you, leave it blank. Check the box on line 5c to certify that your overreported tax is only for the employer share of social security and Medicare taxes. In column 3, enter the difference between columns 1 and 2. In column 2, enter the amount you originally reported or as previously corrected by you or the IRS. In Part 2, check box 3. Adjustments to qualified health plan expenses allocable to the employee retention credit are reported on Form 941-X, line 31a. If youre correcting the qualified small business payroll tax credit for increasing research activities that you reported on Form 941, line 11a (line 11 for quarters beginning before April 1, 2020), enter the total corrected amount in column 1. next. Qualified family leave wages paid with respect to leave taken after March 31, 2020, and before April 1, 2021, aren't subject to the employer share of social security tax; therefore, the tax rate on these wages is 6.2% (0.062). The Employee Retention Credit (ERC) is claimed by submitting an eligible salary on Line 30 of Form 941-X. For purposes of the credit for qualified sick and family leave wages, qualified sick and family leave wages are wages for social security and Medicare tax purposes, determined without regard to the exclusions from the definition of employment under sections 3121(b)(1)(22), that an employer pays that otherwise meet the requirements of the Emergency Paid Sick Leave Act (EPSLA) or the Emergency Family and Medical Leave Expansion Act (Expanded FMLA), as enacted under the FFCRA and amended by the COVID-related Tax Relief Act of 2020. . 15, Employers Tax Guide, for more information about corrections during the calendar year and about administrative errors. In addition, for an overcollection, you may correct federal income tax withholding only if you also repaid or reimbursed the employees in the same year. Rev. The amounts entered on lines 2831a and lines 3240 are amounts that you use in Worksheets 15, as applicable, to figure your credits. If any due date falls on a Saturday, Sunday, or legal holiday, you may file Form 941-X on the next business day. ExamplePrior year administrative error (incorrectly reported amount of federal income tax actually withheld). Complete the top of Form 941-X, including the date you discovered the error. Deferred Amount of Social Security Tax, 25. If you need more space, attach additional sheets, but be sure to write your name, EIN, Form 941-X, the quarter youre correcting (for example, Quarter 2), and the calendar year of the quarter youre correcting on the top of each sheet. .Form 941-X and these instructions use the terms nonrefundable and refundable when discussing credits. ExampleCombination of prior year administrative and nonadministrative errors.
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