You may have heard about the many changes that have been made to the Form 941 for the second quarter of 2020, but what about the Schedule R? How has this form been adjusted to properly report the changes due to COVID-19? Who even needs to file this form? We are covering all of these questions and more.
What Is Schedule R?
The Schedule R is an attachment form that certain employers must complete and file with their Form 941. The schedule R is designed to report the Form 941 information at a glance for every business that a service provider is filing for.
Who Must File Schedule R?
Filers who are classified as 3504 Agents or a Certified Professional Employer Organization (CPEO) must file Schedule R. Non certified PEOs may also file Schedule R. These organizations handle the tax filings of many businesses and they must apply for this status and be approved by the IRS.
Has Schedule R Been Revised For The Second Quarter of 2020?
Yes. Much like the Form 941 has been revised to meet the reporting needs for businesses utilizing COVID-19 related tax credits, Schedule R has also been updated. There are now additional data fields that are designed to capture the following tax credits:
The Qualified Family Leave Credit
To be eligible for this tax credit, employers with 500 employees or less must provide their employees with the option to take time off from work when they are caring for a family member that is affected by COVID-19.
The Qualified Paid Sick Leave Credit
To be eligible for this tax credit, employers with 500 or less employees must provide up to 80 hours of paid sick leave when their employee is unable to work either because they are experiencing COVID-19 or caring for a family member that is infected and thus they are self-quarantining themselves.
The Employee Retention Credit
This tax credit offers a 50% refund on wages paid totaling $10,000, it is designed for employers that have dramatically reduced revenue due to COVID-19. The purpose of this program is to encourage employers to keep their employees on the payroll, qualified wages may not exceed 50% of $10,000 ($5,000) for any employee for all quarters.
How Do I Complete Schedule R?
To complete Schedule R, start with entering your business information (EIN) and checking the box to indicate that you are a Section 3504 Agent or CPEO, or any other type of third party organization. Then you will begin to enter the collective information from each of your clients on the lines provided. Please note that the following lines will be significant for reporting COVID-19 related tax credits.
Column f. Qualified Sick Leave Wages
Column g. Qualified Family Leave Wages
Column h. Total social security and Medicare taxes
Column k. Nonrefundable portion of credit for qualified sick and family leave
Column l. Nonrefundable portion of employee retention credit
Column m. Total taxes after adjustments and nonrefundable credits
Column o. Deferred amount of the employer share of social security tax
Column p. Refundable portion of credit for qualified sick and family leave wages
Column q. Refundable portion of employee retention credit
Column r. Total advances received from filing Form(s) 7200 for the quarter
Column s.Qualified health plan expenses allocable to qualified sick leave wages
Does TaxBandits Support Schedule R?
Yes, TaxBandits not only supports Schedule R, we offer up a simple solution for filing Schedule R. Our software walks you through the Schedule R line by line and provides filers with the guidance they need.
Schedule R filers can take advantage of features that are designed to save them time and money, such as our bulk upload feature. We also offer 941 credits for those who plan to file multiple copies of the Form 941. The more forms your file, the greater your savings. Our excellent support team is available to assist you through the filing process as well as introduce you to key features and credits to enhance the ease of your experience. Get started today.