As you may have noticed, there are many changes to the Form 941 for the second quarter of 2021. Whether you are a business owner filing this form for your business or a tax professional that is filing on behalf of a long list of clients, adjusting to these changes can be stressful.
That’s why we are here to help you tackle the Form 941 process, filing a paper copy of the Form 941 has become increasingly inconvenient over the past year. With the continued expansion of this form and the many worksheets that are now necessary, e-filing is not only the fastest method of filing, but the easiest all around.
By e-filing you can eliminate the need to make all calculations manually and the electronic form flow will provide you with a sense of organization.
Completing the 941 Worksheets
Now that there are five 941 worksheets, it is not only important for employers to complete them, but they must choose the correct worksheets to complete. Employers won’t need to complete all 5 of the worksheets, for example, Worksheet 4 is designed to be used in the upcoming third and fourth quarters.
These are the updated worksheets that the IRS has finalized:
Worksheet 1: Credit for Qualified Sick and Family Leave Wages for Leave Taken Before April 1, 2021
Worksheet 2: Employee Retention Credit for the Second Quarter of 2021 Only (Wages Paid After March 31, 2021, and Before July 1, 2021)
Worksheet 3: Credit for Qualified Sick and Family Leave Wages for Leave Taken After March 31, 2021
Worksheet 4: Employee Retention Credit for Third and Fourth Quarters of 2021 Only (Qualified Wages Paid After June 30, 2021)
Worksheet 5: COBRA Premium Assistance Credit
Employers should complete the applicable worksheets based on the COVID-19 tax credits they claimed during the quarter.
Addressing New and Updated Lines on Form 941
There are many updates to the lines on Form 941 compared to last quarter (Q1 of 2021). This is greatly due to the American Rescue Plan that has been introduced by the new administration. In this Act, employers are able to continue claiming the existing sick and family leave tax credits and the employee retention credit, however, the way these credits on the Form 941 has changed.
When it comes to reporting the refundable and nonrefundable portions of sick and family leave credits are calculated differently on wages taken before and after March 31, 2021. Worksheets 1 and 3 are designed to help employers calculate the amounts required on these lines.
When it comes to the brand new COBRA premium assistance credit, employers will need to enter the amount paid to cover the premiums of eligible individuals and their dependents in the following lines.
Line 11e: Nonrefundable portion of COBRA premium assistance credit (see instructions for applicable quarters)
Line 11f: Number of individuals provided COBRA premium assistance
Line 13f: Refundable portion of COBRA premium assistance credit (see instructions for applicable quarters)
To calculate these amounts, employers should use Worksheet 5.
E-filing the Form 941 for the Second Quarter
When it comes to filing, e-filing Form 941 is the best option for tackling this complex form. With TaxBandits, there are so many 941 features that you can use to simplify your filing!
All of the worksheets required for the second quarter are built-in to the filing flow. Ditch your calculator and manual calculations, TaxBandits will help you with automatic calculations.
In addition to saving yourself time this quarter, why not save your cash? Are you a tax professional filing on behalf of your clients, purchase prepaid credit to lock in your best pricing. You can also bulk upload your Form 941 data to TaxBandits to generate multiple forms at once!