4 Things You Need To Know About The Revised Form 941

These 4 key elements will help you better understand how to complete the revised Form 941 for the second quarter deadline.

You may have heard about the newly revised Form 941 and the many changes that are present on this form. This may be a little confusing for filers who are used to the old version of this form. So, we’re breaking it down for you. 

Here are 4 key elements that will help you better understand how to complete the revised Form 941 for the second quarter deadline. 

The Revised Form 941 is longer

The Form 941 has gone from a fairly straightforward form to a much longer 3 page form. There are an additional 23 data fields that have been added by the IRS. These additional data fields were added to accommodate the reporting of COVID-19. 

Under the Coronavirus Aid, Relief, and Economic Security Act, tax relief options are provided to employers. These includes refundable tax credits such as,

  • The sick leave tax credit
  • The family leave credit
  • The employee retention credit

Employers will need to report which tax credits they have taken advantage of as well as the wages that qualify for these credits.

The deadline for the second quarter of 2020 remains the same

There are a lot of changes to address when it comes to the Form 941, however the deadline for the second quarter of 2020 is not one of them. This deadline remains the same as planned despite the COVID-19 pandemic. 

The second quarter deadline for business owners to file the Form 941 is still July 31, 2020. 

As for the third quarter and fourth quarter deadline, they will most likely remain on October 31, 2020 and January 31, 2020. 

You must report any reductions in your tax deposits

The CARES Act mandates that businesses who employ 500 employees or less must provide their employees with paid sick leave or family leave related to COVID-19. 

For more immediate relief, employers can reduce their tax deposits to help cover the paid sick or family leave wages for their employees. 

Employers who reduce their tax deposits and still find that this amount does not cover the qualified paid and sick leave wages, are able to request an advance on these tax credits. To do this they must file the Form 7200: Advance Payment of Employer Credits Due to COVID-19. This form can be filed throughout the quarter as needed. 

Whether a business has chosen to reduce their tax deposits or file Form 7200 as needed, they will need to report this information on the Form 941 for the second quarter. Employers will need to provide the amount of qualified paid and sick leave credits. They will also need to indicate the wages that qualify for the employee retention credit. 

The IRS created Worksheet 1 to assist filers 

Is the mere thought of math calculations giving you a sense of dread? Don’t panic yet, the IRS has created a worksheet to help simplify the process. This worksheet will help walk filers through the calculations needed for the additional data fields. 

This worksheet has 3 sections, one for reduced employer’s share of Social Security tax., one for the sick and family leave credit, and one for calculating qualifying wages for the employee retention credit. Employers can complete each section that applies to their tax relief.

This form doesn’t have to be attached to Form 941, it is for your records only. 

Did you know that Worksheet 1 is available when you e-file with TaxBandits? Not only does our software walk you through the Form 941, but employers can use the Worksheet 1 for additional help. We have updated our Form 941 process to accommodate the many new revisions to this form. 

Our goal is to make your filing process as seamless as possible, get started today!

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