Good news! The IRS has released the finalized version of Form 941. Now business owners and tax professionals will know what to expect for the second quarter of 2020. So, has anything changed from the draft of Form 941 that the IRS released back in April? Let’s go over this finalized form and cover the key aspects that filers need to know.
About The Finalized Form 941…
There is some more good news here, the finalized version is very similar to the draft that the IRS has already released. So, if you have taken some time to look over that draft and familiarize yourself with it, the IRS has stayed true to those initial changes.
The Form 941 is now three pages, a fair bit longer than its predecessor. This new form has 23 new data fields for filers to complete.
The Form 941 addresses the following tax credits:
Employee Retention Credits
Under the CARES Act, employers with 500 employees or less that are fully operational during the 2020 calendar year are eligible for Employee Retention Credits on up to 50% of qualified wages. These credits apply to the employer’s portion of social security taxes and $10,000 is the limit that can be applied to any one employee in the span of a calendar year.
Credits For Family and Sick Leave Wages
These credits refer to the Families First Coronavirus Response Act. This Act mandates that all employers must provide their full-time employees with two weeks of paid sick leave if they or a member of their family suffer from COVID-19. Under the Families First Coronavirus Response Act, employers can receive tax credits to cover the cost of these wages.
What Is The Deadline For Form 941?
The second-quarter filing deadline for Form 941 is July 31, 2020. The second quarter Form 941 reflects information about the months of April, May, and June. While there is time for business owners and tax professionals to familiarize themselves with this newly revised form, the deadline is close enough that there should be a sense of urgency.
Form 941 Instructions
Are you completely unsure of where to start with this revised Form 941? That’s alright, the IRS has created extensive instructions to help filers understand the data fields and the proper recording of their tax credits.
For calculating the refundable and non-refundable tax credits, the IRS has created Worksheet 1. This worksheet is divided into three sections and depending on which tax credits you are eligible for, you can fill out this form accordingly to calculate the correct amounts. Here is a breakdown of Worksheet 1:
Employers who have paid BOTH qualified wages for sick leave and family leave as well as wages that are eligible for the employee retention credit should complete this section of the worksheet.
Employers who paid qualified wages for sick and family leave but NOT the employee retention credits should file this section of the worksheet.
Employers who paid wages that are eligible for the employee retention credit but NOT wages for sick and family leave should complete this portion of the worksheet.
Need Some Guidance? TaxBandits Is Here For You!
Our software is designed to make the filing process simple and efficient. Whether you are an experienced filer who is unsure of the new Form 941, or a business owner filing for the first time, you can file with confidence. TaxBandits supports Worksheet 1 to assist filers. Filing electronically is a faster and more efficient process, the IRS even prefers.
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