Completing Your Clients’ Form 941-X for the Second Quarter of 2022

We are breaking down step by step how to easily file your client’s Form 941-X for the second quarter of 2022 with TaxBandits!

This blog includes IRS information to help you file Form 941-X, for additional information, check out the full Form 941-X instructions, here.

Once you’ve signed in to TaxBandits, select ‘Start New’ in the upper right corner:

Select the business you are filing for, or manually enter the business information. Then click ‘Save and Continue’:

Select the tax year and quarter you are filing for:

Select the form you are completing the correction for:

Completing 941-X, Part 1:

Select ONLY one process. See page 6 for additional guidance, including information on how to treat employment tax credits and social security tax deferrals.

Line 1: Adjusted employment tax return.

This box is used to indicate if you’re correcting underreported or overreported tax amounts and you would like to use the adjustment process to correct the errors.

If you’re correcting both underreported tax amounts and overreported tax amounts on this form, this box has to be checked.

Line 2: Claim.

If you’re only correcting overreported tax amounts and are claiming a refund or abatement for the negative amount on line 27.

This box must be checked if you have a credit (a negative amount on line 27) and the period of limitations on credit/refund for Form 941 will expire within 90 days of the date you file Form 941-X.

Completing 941-X, Part 2:

Complete the certifications. Check all that apply.

Line 3: I certify that I’ve filed or will file Forms W-2, Wage and Tax Statement, or Forms W-2c, Corrected Wage and Tax Statement, as required.

Checking this box certifies that Forms W-2 or Forms W-2c have or will be filed with the SSA showing the employees’ correct wage and tax amounts. 

If all of the corrections relate to underreported tax amounts, line 3 is required, then lines 4 and 5 would need to be skipped. 

Line 4: If you checked line 1 because you’re adjusting overreported federal income tax, social security tax, Medicare tax, or Additional Medicare Tax, check all that apply. You must check at least one box.

• Checking this box indicates/certifies that:
  • The overreported amount includes each affected employee share of overcollected taxes. 
  • The employee share of current and prior year taxes has been repaid or reimbursed.
  • Written statements from the employees stating that they didn’t and won’t receive a refund or credit for the prior year taxes were received. 
  • The federal income tax or Additional Medicare Tax withheld from employees has been adjusted for the current calendar year only. 
• Checking this box indicates/certifies that:
  • The overreported amount is only for the employer share of taxes on those employees who you were unable to find or those who didn’t give you a statement described on line 4a. 
• Checking this box indicates/certifies that:
  • The overreported amount is only for federal income tax, social security tax, Medicare tax, or Additional Medicare Tax that wasn’t withheld from the employees.

Line 5: If you checked line 2 because you’re claiming a refund or abatement of overreported federal income tax, social security tax, Medicare tax, or Additional Medicare Tax, check all that apply. You must check at least one box. 

• Checking this box indicates/certifies that:
  • The overreported amount includes each affected employee share of social security and Medicare taxes. 
  • The employees share of social security and Medicare taxes has been repaid or reimbursed.
  • If, if the employee social security and Medicare taxes was overcollected in prior years, written statements from the employees stating that they didn’t and won’t receive a refund or credit for the prior year taxes were received. 
• Checking this box indicates/certifies that:
  • The overreported amount includes each affected employee share of social security and Medicare taxes. 
  • The employee share of social security and Medicare taxes hasn’t been repaid or reimbursed. 
  • Consent was received from each affected employee to file a claim on the employee share of those taxes.
  • Written statements from the employees stating that they didn’t and won’t receive a refund or credit for the prior year taxes were received. 

• Checking this box indicates/certifies that:
  • The overreported tax is only for the employer share of social security and Medicare taxes. 
    • This applies when:
      • The affected employees didn’t provide consent to file the claim
      • The employees couldn’t be located
      • The employees didn’t provide a statement containing the requirements referenced below
• Checking this box indicates/certifies that:
  • The overreported amount is only for federal income tax, social security tax, Medicare tax, or Additional Medicare Tax that wasn’t withheld from employees

An employee consent statement must contain: 

• The employee’s name, address, and social security number (or truncated taxpayer identification number, when appropriate)
• The employer’s name, address, and EIN
• The tax period(s), type of tax, and the amount of tax the consent is being provided for 
• Confirm that the employee authorizes the employer to claim a refund for the overpayment of the employee share of tax
• For include the employee’s written statement certifying that the employee hasn’t made any previous claims (or the claims were rejected) and won’t make any future claims for refund or credit of the amount of the overcollection;
• Identify the basis of the claim
• If the amounts were collected in a prior year, include a written statement from the employee(s) confirming that no previous claims were made or the claims were rejected, and that they won’t make any future refund or credit claims for the amount of the overcollection 
•  Be dated and contain the employee’s signature under penalties of perjury. 

Click “Save and Continue” to move to page 2:

Completing 941-X, Part 3:

Enter the corrections for this quarter. If any line doesn’t apply, leave it blank.

When completing Part 3, keep in mind:

• Column 1 is for the total corrected amount (for ALL employees)
• Column 2 is for the amount originally reported or as previously corrected
• Column 3 is for the difference
• If you are correcting any amounts on Form 941-X Lines 6 through 13, columns 1 and 2, amounts for all employees should be shown, not just for employees whose amounts are being corrected. 
• Since there are special circumstances for lines 14–22, 24–26c, and 28–40, the IRS recommends reading their instructions for each line carefully before completing these lines.
• Lines that do not apply should be left blank.
• As you fill out the form, TaxBandits will automatically complete several of the calculations for you. You will only need to provide information in the checkboxes and yellow fields as it pertains to your client’s business. If the box is gray, it is either not required or TaxBandits will complete that box for you based on other information you’ve provided. 

Line 6: Wages, tips, and other compensation

• What line of Form 941 is this?
  • Line 2

Line 7: Federal income tax withheld from wages, tips, and other compensation

• What line of Form 941 is this?
  • Line 3

Line 8: Taxable social security wages

• What line of Form 941 is this?
  • Line 5a, Column 1

Line 9: Qualified sick leave wages

• What line of Form 941 is this?
  • Line 5a(i), Column 1

Line 10: Qualified family leave wages

• What line of Form 941 is this?
  • Line 5a(ii), Column 1

Line 11: Taxable social security tips 

• What line of Form 941 is this?
  • Line 5b, Column 1

Line 12: Taxable Medicare wages & tips

• What line of Form 941 is this?
  • Line 5c, Column 1

Line 13: Taxable wages & tips subject to Additional Medicare Tax withholding

• What line of Form 941 is this?
  • Line 5d

Line 14: Section 3121(q) Notice and Demand—Tax due on unreported tips

• What line of Form 941 is this?
  • Line 5f

Line 15: Tax adjustments

• What line of Form 941 is this?
  • Lines 7 through 9

Line 16: Qualified small business payroll tax credit for increasing research activities 

• What line of Form 941 is this?
  • Line 11a

Line 17: Nonrefundable portion of credit for qualified sick and family leave wages for leave taken before April 1, 2021

• What line of Form 941 is this?
  • Line 11b

Line 18: 

1. Nonrefundable portion of employee retention credit
   • What line of Form 941 is this?
     • Line 11c

1. Nonrefundable portion of credit for qualified sick and family leave wages for leave taken after March 31, 2021, and before October 1, 2021 
   • What line of Form 941 is this?
     • Line 11d

1. Nonrefundable portion of COBRA premium assistance credit
   • What line of Form 941 is this?
     • Line 11e

1.  Number of individuals provided COBRA premium assistance
   • What line of Form 941 is this?
     • Line 11f

Line 19: Special addition to wages for federal income tax

• Enter only corrections to wages resulting from reclassifying certain workers as employees when section 3509 rates are used to calculate the taxes.

Line 20: Special addition to wages for social security taxes

• Enter only corrections to wages resulting from reclassifying certain workers as employees when section 3509 rates are used to calculate the taxes.

Line 21: Special addition to wages for Medicare taxes

• Enter only corrections to wages resulting from reclassifying certain workers as employees when section 3509 rates are used to calculate the taxes.

Click “Save and Continue” to move to page 3:

Line 22: Special addition to wages for Additional Medicare Tax

• Enter only corrections to wages resulting from reclassifying certain workers as employees when section 3509 rates are used to calculate the taxes.

Line 23: Combine the amounts on lines 7 through 22 of Column 4

Line 24: Deferred amount of social security tax

• What line of Form 941 is this?
  • Line 13b

Line 25: Refundable portion of credit for qualified sick and family leave wages for leave taken before April 1, 2021 

• What line of Form 941 is this?
  • Line 13c

Line 26: 

1. Refundable portion of employee retention credit 
   1. What line of Form 941 is this?
      1. Line 13d
2. Refundable portion of credit for qualified sick and family leave wages for leave taken after March 31, 2021, and before October 1, 2021 
   1. What line of Form 941 is this?
      1. Line 13e
3. Refundable portion of COBRA premium assistance credit 
   1. What line of Form 941 is this?
      1. Line 13f

Line 27: Total. Combine the amounts on lines 23 through 26c of Column 4

• If line 27 is less than zero: 
  • And Line 1 is checked, this is the amount to be applied as a credit to Form 941 for the tax period in which you’re filing this form. 
  • And Line 2 is checked, this is the amount you want refunded or abated. 
• If line 27 is more than zero, this is the amount you owe. 
  • The amount should be paid by the time you file this return.

Line 28: Qualified health plan expenses allocable to qualified sick leave wages for leave taken before April 1, 2021

• What line of Form 941 is this?
  • Line 19

Line 29: Qualified health plan expenses allocable to qualified family leave wages for leave taken before April 1, 2021 

• What line of Form 941 is this?
  • Line 20

Line 30: Qualified wages for the employee retention credit

• What line of Form 941 is this?
  • Line 21

Line 31:

1. Qualified health plan expenses for the employee retention credit
   1. What line of Form 941 is this?
      1. Line 22
2. Check here 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 

Line 32: Credit from Form 5884-C, line 11, for this quarter

• What line of Form 941 is this?
  • Line 23

Click “Save and Continue” to move to page 4:

Line 33:

1. Qualified wages paid March 13 through March 31, 2020, for the employee retention credit 
   1. What line of Form 941 is this?
      1. Line 24
2. Deferred amount of the employee share of social security tax included on Form 941 or 941-SS, line 13b
   1. What line of Form 941 is this?
      1. Line 24

Line 34: Qualified health plan expenses allocable to wages reported on Form 941 or 941-SS, line 24 

What line of Form 941 is this?

• Line 25

Line 35: Qualified sick leave wages for leave taken after March 31, 2021, and before October 1, 2021 

• What line of Form 941 is this?
  • Line 23

Line 36: Qualified health plan expenses allocable to qualified sick leave wages for leave taken after March 31, 2021, and before October 1, 2021

• What line of Form 941 is this?
  • Line 24

Line 37: Amounts under certain collectively bargained agreements allocable to qualified sick leave wages for leave taken after March 31, 2021, and before October 1, 2021

• What line of Form 941 is this?
  • Line 25

Line 38: Qualified family leave wages for leave taken after March 31, 2021, and before October 1, 2021

• What line of Form 941 is this?
  • Line 26

Line 39: Qualified health plan expenses allocable to qualified family leave wages for leave taken after March 31, 2021, and before October 1, 2021

• What line of Form 941 is this?
  • Line 27

Line 40: Amounts under certain collectively bargained agreements allocable to qualified family leave wages for leave taken after March 31, 2021, and before October 1, 2021

• What line of Form 941 is this?
  • Line 28

Click “Save and Continue” to move to page 5:

Completing 941-X, Part 4:

Line 41: Check here if any corrections you entered on a line include both underreported and overreported amounts. Explain both your underreported and overreported amounts on line 43.

Line 42: Check here if any corrections involve reclassified workers. Explain on line 43.

Line 43: You must give us a detailed explanation of how you determined your corrections. See the instructions.

• Describe in detail each correction entered in:
  • Column 4 on lines 7–22
  • Column 4 on lines 24–26c
  • Line 6
  • Lines 28–40
• Provide the following information in your explanation for each correction. 
  • Form 941-X line number(s) affected. 
  • Date you discovered the error. 
  • Difference (amount of the error). 
  • Cause of the error.

Completing 941-X, Part 5:

Sign here. You must complete all five pages of this form and sign it.

Fill out the name, title, and daytime phone number boxes. The paid preparer section will be populated automatically using the details you’ve entered in your TaxBandits account. You will be prompted to complete the signature portion later. 

Click “Save and Continue”.

Select whether you need to complete Schedule B:

If Schedule B needs to be completed, click “I want to add Schedule B”, fill out Schedule B, then click “Save and Continue”.

 If Schedule B doesn’t need to be completed, click “I do not need Schedule B”.

Select if you want to send the Form 941-X to the client to sign electronically or if the client will manually sign the form later:

If you want to send Form 941-X to the client to sign electronically, click ‘Send E-sign’. The client will receive an email and will need to follow the prompts to review and e-sign the form.

You will receive an email once the form has been e-signed. Review the signed 941-X in your TaxBandits account and click ‘Continue’.

If the client will manually sign the form later, click ‘I do not need Schedule B’.

Prepare your Form 941-X

Review the summary. If changes are needed, select “Edit”, update the information as needed, and continue to follow the prompts. 

If no changes are needed, pay the form preparation fee by adding your card details and clicking ‘Pay and Print’.

You can then print and mail Form 941-X to the IRS.

Click here to refer to page 6 for information on what address to mail the 941-X to.

Ready to create your free TaxBandits account and get started? 

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