Form 941-X Update: The IRS Releases Draft Version of Form 941-X 2024

The IRS has released a draft of Form 941-X. Here's what amending Form 941 will look like in 2024!

IRS Form 941-X draft for 2024

Recently, the Internal Revenue Service (IRS) released the draft version of Form 941-X for the tax year 2024. While employers are familiar with Form 941, errors can still occur during the filing process. To rectify these mistakes, it’s essential to understand Form 941-X (Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund).

In this blog post, we’ll review the draft version of Form 941-X and explore the changes applicable for the tax year 2024. 

You can also view the IRS draft of 941-X here. 

Form 941-X: Purpose and Requirements

Form 941-X (Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund) is the IRS form used for correcting the errors made in the previously filed form 941. Employers can use Form 941-X to correct the underreported and overreported amount entered in Form 941.

Note: Always file Form 941-X after Form 941. Form 941-X is used for amendments and requires you to have already filed Form 941.

Latest Updates to Form 941-X:

While an IRS draft is not the finalized version, it gives great insight into what the 2024 Form 941-X will look like. Compared to the current version, there are several notable updates. 

Period of limitations to make certain corrections expired:

Certain lines in the form 941-X have been removed from the drafted form 941-X. 

  • Line 24(Deferred amount of social security tax* (Form 941 or 941-SS, line 13b) – to correct the employer deferral for the second quarter of 2020 and the employer and employee deferral for the third and fourth quarters of 2020.
  • Line 33(a) (Qualified wages paid March 13 through March 31, 2020, for the employee retention credit* (Form 941 or 941-SS, line 24) – used for corrections to the second quarter of 2020.
  • Line 33(b) Deferred amount of the employee share of social security tax included on Form 941 or 941-SS, line 13b* (Form 941 or 941-SS, line 24) used only for corrections to the second quarter of 2020.
  • Line 34 Qualified health plan expenses are allocable to wages reported on Form 941 or 941-SS, line 24* (Form 941 or 941-SS, line 25) used for corrections to the second quarter of 2020.

These lines in Form 941-X are now reserved for future use because the period of limitations on correcting these lines has generally expired for most employers.

Taxes that have been overreported or underreported can typically be corrected within three years from the date the original Form 941 was filed or within two years from the date the tax was paid. The periodical limits of  Lines 24 and 33(b) expired as of April 15, 2024.

Line 33(a) and Line 34  are used only for the employee retention credit, qualified health plan expenses, and for most employers. The period of limitations for making corrections to qualified wages paid is March 13 through March 31, 2020. This generally expires for most employers on April 15, 2024. 

The instructions in line 18(a) and the worksheet are retained and applicable for employee retention credit. Taxpayers who think the period of limitations is still open for correcting your second quarter 2020 Form 941, can still file the April 2023 revision of Form 941-X.

The COVID-19-related credit for qualified sick and family leave wages, no longer be claimed on Form 941. 

The COVID-19-related credit for qualified sick and family leave taken between March 31, 2020, and before October 1, 2021, is no longer claimable using Form 941, as these tax credits have expired. Lines for claiming these credits were removed from Form 941 after December 31, 2023. 

However, if you qualify to claim the credit for qualified sick and family leave wages because you paid the wages in 2024 for an earlier applicable leave period, you can file Form 941-X to claim the credit paid in 2024.

Form 941- SS and Form-941 PR are no longer available after the tax year 2023

Form 941-SS (Employer’s Quarterly Federal Tax Return – American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands) and Form 941-PR (Employer’s Quarterly Federal Tax Return – Puerto Rican Version) have been discontinued after tax year 2023. Employers can now file using the standard Form 941. However, if employers prefer their form in Spanish, they can use Form 941-SP.

Form 941-X is still used to correct a Form 941-SS filed for the fourth quarter of 2023 and earlier quarters if the period of limitations is still open.

To correct Form 941-PR filed for the fourth quarter of 2023 or an earlier quarter, you should file Form 941-X (PR).

Conclusion

In summary, as employers prepare to file amendments to their 2024 Form 941, they can expect changes in the Form 941-X filing process, which directly respond to the updates made to Form 941 for 2024. Stay tuned for more informative blogs as additional information on this topic becomes available from the IRS!

In the interim, TaxBandits offers straightforward solutions for the 94x series forms necessary to maintain compliance for your business. This includes Form 941 and 941-X for the year 2023. Sign up for your free account today to effortlessly manage payroll tax filings for your business or clients!

tax year 2023 e-filing

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