IRS Releases Draft Form 941 for 2026: See What’s New

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Attention Employers! The IRS has released a draft of Form 941 for 2026. While it closely resembles the Q1 2025 version, there are some important updates that employers and payroll providers should be aware of. From a new filer classification checkbox to added fields for refund-related bank information, these updates may impact how you complete your filings.

This draft gives you an early preview of what to expect for 2026. Let’s break it down!

Key Changes in Draft Form 941 for 2026

Below are the key updates included in the March 2026 draft of Form 941:

New Filer Classification Box

The draft Form 941 contains a new check box section that requires you to indicate whether you are filing as an aggregate filer. The options include:

• Section 3504 Agent
• Certified Professional Employer Organization(CPEO)
• Other Third-Party Filer

Bank Account Information Field on Line 15

Another significant update is the expansion of Line 15, which now includes five separate fields designed to collect banking information for processing overpayment refunds via direct deposit.

• Line 15(a) Overpayment: This field shows the total amount overpaid for the quarter.
• Line 15(b) Choose your option: Select what to do with the overpayment. You can choose to:
  • Apply it to your next return, or
  • Request a refund
• Line 15(c) Routing number: If you’re requesting a refund, you can now enter your bank’s routing number to receive the amount by direct deposit.
• Line 15(d) Type of account:  Indicate whether the type of bank account is checking or savings.
• Line 15(e) Account number: Enter the actual account number where the refund should be deposited.

In previous Form 941, overpayments were often issued by check, which could delay the refund process. With this update, employers can now opt for direct deposit refunds, making the process faster and more secure.

A Quick Summary of the Changes

	Form 941, 2025	Draft Form 941, 2026
Third-Party Filer Identification	Not included	New section to check if filer is a Section 3504 Agent, CPEO, or Other Third Party
Line 15 – Overpayment	Basic options: apply to the next return or request a refund	Expanded 15a and 15e to collect bank details for direct deposit
Banking Information for Refunds	Not required	New fields for routing and account number, account type

What Should Employers Do Now?

While the draft isn’t final, it’s a smart move to start preparing early:

• Review your filing status: If you act as a third-party filer, determine whether you qualify as a Section 3504 Agent, CPEO, or another type. You’ll likely need to indicate this on future returns.
  
• Plan for refund handling: If you expect overpayments, consider how you’ll provide banking details for faster refunds via direct deposit, especially if you manage multiple returns.
  
• Watch for finalized changes: Stay tuned for the official release so you can make any necessary updates to your payroll processes or filing systems.

The Bottom Line

The 2026 draft of Form 941 introduces a couple of useful updates, like identifying filer types and adding bank info fields for direct deposit refunds. While these changes aren’t dramatic, they’re definitely worth noting.

That said, keep in mind this is just a draft. Nothing is final yet, and the IRS may still make adjustments before releasing the official form. We’ll continue to monitor updates and keep you informed as soon as any new changes are confirmed.