A Guide to Form 941 Corrections and Amendment Form 941-X
When it comes to completing your business’ quarterly payroll filing, you may be a pro, but mistakes can happen!
So, you are reviewing a previously filed Form 941, and you notice it…a dreaded error. You checked your records, and you checked your calculations, how is this possible? Now what?
Don’t worry, there is no need to enter full panic mode. The IRS created an amendment form for this very reason. Just keep reading, in this blog, we will be covering the purpose of Form 941-X when it should be filed, and what kind of errors it can be used to correct.
What is Form 941-X?
IRS Form 941-X is an amendment to Form 941. This form allows employers to correct various clerical errors made on a previously filed and accepted Form 941 or Form 941-SS (a quarterly payroll form for employers in the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands).
When employers notice an error on a previously filed Form 941, they should complete Form 941-X. There are only a few exceptions to this rule, which we will cover later in the article. Employers must file a separate Form 941-X for each Form 941 that needs to be amended.
Recent IRS Update: Beginning in 2024, the IRS will allow electronic filing of Form 941-X as part of Modernized e-File (MeF).
What information can be corrected by Filing Form 941-X?
Based on the Form 941-X instructions, the following information can be corrected by filing Form 941-X:
- Wages, tips, and other compensation amounts
- Taxable social security wages
- Taxable social security tips
- Taxable Medicare wages and tips
- Taxable wages and tips are subject to Additional Medicare Tax withholding
- Deferred amounts of the employer’s share of social security tax
- Deferred amounts of the employee share of social security tax
- The qualified small business payroll tax credit for increasing research activities
However, if you are looking to correct errors on your tax return filed before the 2024 tax year, you could correct some additional errors, which include:
- Sick leave and family leave wages: Amounts reported on Form 941 for the credit for qualified sick and family leave wages for leave taken after March 31, 2020, and before April 1, 2021, as well as after March 31, 2021, and before October 1, 2021.
- Employee Retention Credit: You can fix any errors related to the credit.
- COBRA Premium Assistance Credit: Adjust any incorrect amounts reported.
Withdraw an Employee Retention Credit (ERC) claim
Employers who submit an ineligible claim can avoid future issues such as audits, repayment, penalties, and interest by withdrawing an ERC claim. You can use this program if your ERC hasn’t been paid yet or if you have already received a check for ERC but haven’t cashed or deposited it.
If you filed a claim requesting a refund for an Employee Retention Credit (ERC or ERTC) and would now like to withdraw your claim, our blog will give you a detailed overview of the steps to request an ERC claim withdrawal.
When should Form 941-X be Filed?
While there is no set deadline for filing Form 941-X, the IRS recommends filing the amendment as soon as you notice errors on a previously filed Form 941.
- For overreported taxes, you should file Form 941-X within 3 years of the date that the original Form 941 was filed or 2 years from the date you paid the tax reported on Form 941.
- For underreported taxes, you should file Form 941-X within 3 years of the date that the original Form 941 was filed.
Frequently Asked Questions
What information can not be corrected by Filing Form 941-X?
It is important to note that Form 941-X should never be used to correct amounts on a different type of payroll tax form. For example, if your business files Form 944, 945, or 943, Form 941-X will not help you file an amended tax return.
Remember, Form 941-X is designed to correct administrative errors only, you can’t correct tax withholding amounts if these were withheld incorrectly.
There are a few things that can not be corrected using Form 941-X, this includes,
- Federal income tax withheld for prior years due to non-administrative errors.
- Incorrect amount of additional Medicare tax withheld for a prior year.
- If you failed to file Form 941 for a previous quarter, you should not file Form 941-X, instead, you must file the late 941 form.
- If your only errors are related to the number of employees that you paid wages to.
- Federal tax liabilities on 941 Schedule B
What Information is Reported on Form 941?
Form 941 is a quarterly payroll tax form that certain businesses are required to file with the IRS. This form is used to report the amount of Medicare, Social Security, and income taxes that employers withhold from their employees’ wages, tips, and other compensation.
Form 941 is also used by employers to report their tax liability for the quarter and claim a payroll tax credit for increasing research activities. Here are the Form 941 due dates:
- March 31st – First Quarter Deadline (January, February, March)
- July 31st – Second Quarter Deadline (April, May, June)
- October 31st – Third Quarter Deadline (July August, September)
- January 31st – Fourth Quarter Deadline (October, November, December)
TaxBandits Simplifies the Process of Form 941 Amendments
Need to correct certain information on a previously filed Form 941? TaxBandits has you covered! TaxBandits enables you to e-file Form 941-X. Once completed, you can review and transmit your return to the IRS.
Ready to get started?
