IRS Releases 2021 Form 941, Instructions for Form and Schedules B and R

You’re not authorizing your designee to bind you to anything (including additional tax liability) or to otherwise represent you before the IRS. If you want to expand your designee’s authorization, see Pub. If you were a semiweekly schedule depositor during any part of the year, don’t complete line 17. If you pay by EFT, credit card, or debit card, file your return using the Without a payment address under Where Should You File , earlier, and don’t file Form 943-V, Payment Voucher. If filing Form 499R-2/W-2PR, make sure the amounts reported on Form 943 agree with the Form 499R-2/W-2PR totals reported on the 2024 Form W-3 (PR). The amounts from Form 943 that should agree with the related boxes on Form W-3 (PR) are social security wages (line 2 and box 10) and Medicare wages (line 4 and box 12a).

The total tax liability for the quarter must equal the amount reported on line 12 on Form 941 or Form 941-SS. Total liability reported on Schedule B should not be reduced by the deferred amount of the employer share of social security tax, the refundable portion of the credit for qualified sick and family leave wages, or the refundable portion of the employee retention credit. Failure to account for credits on Schedule B may result in an erroneous increase in total tax liability reported on line 12. Any credit in excess of the remaining amount of the employer share of Social Security tax is refundable and reported on Form 941, line 13c (see below). Employers that have already deposited all or any portion of the employer’s share of Social Security tax during the payroll tax deferral period may not subsequently defer payment of the tax already deposited and generate an overpayment of tax, including for the first calendar quarter. Employers may defer only the employer’s share of Social Security tax that is equal to or less than their liability for the employer’s share of Social Security tax that was due to be deposited during the payroll tax deferral period or was for payment due on wages paid during the payroll tax deferral period.

If the fractions-of-cents adjustment is the only entry on line 10, enter “Fractions Only” on the dotted line to the left of the entry space for line 10. Certain amounts reported on Form 943 for 2024 should agree with the Form W-2 totals reported on the 2024 Form W-3. The amounts from Form 943 that should agree with the related boxes on Form W-3 are federal income tax withheld (line 8 and box 2), social security wages (line 2 and box 3), and Medicare wages (line 4 and box 5). If the amounts don’t agree, you may be contacted by the IRS or the SSA.

IRS Releases 2021 Form 941, Instructions for Form and Schedules B and R

Qualified health plan expenses include health plan expenses allocable for periods the employer is not paying qualified wages to the employee such as furloughed employees due to a full or partial shutdown due to a government order. Complete line 17 only if you were a monthly schedule depositor for the entire year and line 13 is $2,500 or more. The amount entered on line 17M must equal the amount reported on line 13. If it doesn’t, your tax deposits and payments may not be counted as timely. Don’t change your current year tax liability reported on line 13 by adjustments reported on any Forms 943-X.

Line 4. Wages Subject to Medicare Tax

The FFCRA sections 7001(c) and 7003(c) define “qualified leave wages” for purposes of the EPSLA and the Expanded FMLA, respectively, as wages as defined in section 3121(a) of the Internal Revenue Code (the “Code”), determined without regard to section 3121(b)(1)-(22) of the Code (and section 7005(a) of the FFCRA). Therefore, although section 3121(b)(1) of the Code excludes from “employment” services performed by H-2A workers, employers are entitled to tax credits under the FFCRA for qualified leave wages paid to H-2A workers. Note that the American Rescue Plan Act of 2021, enacted March 11, 2021, amended and extended the tax credits (and the availability of advance payments of the tax credits) for paid sick and family leave for wages paid with respect to the period beginning April 1, 2021, and ending on September 30, 2021. These FAQs do not currently reflect the changes made by the American Rescue Plan Act; however, please continue to check IRS.gov for any updates related to the change in law.

Tax credits for paid leave under the Families First Coronavirus Response Act for leave prior to April 1, 2021

Finalized instructions for the revised Form 941, Employer’s Quarterly Federal Tax Return, and two other forms were released June 26 by the Internal Revenue Service. If you receive a notice about a penalty after you file your return, reply to the notice with an explanation and we will determine if you meet reasonable-cause criteria. If you use a tax preparer to complete Form 943, make sure the preparer uses your correct business name and EIN. These instructions give you some background information about Form 943. They tell you who must file Form 943, how to complete it line by line, and when and where to file it. If you use a paid preparer to complete Form 943, the paid preparer must complete and sign the paid preparer’s section of the form.

Employers that fail to meet employment tax deposit obligations timely and that fail to pay their taxes with a timely filed Form 941, Form 943, or Form 944 will generally owe both failure to deposit and failure to pay penalties. Qualified health plan expenses for employee retention credit. For the purposes of the employee retention credit, the qualified health expenses would include the amount paid by the employer to provide a group health plan but only to the extent these amounts are excluded from the employees’ income as coverage under an accident or health plan. This would include the employer cost and employee’s pre-tax contribution but would not include an employee’s after-tax contribution.

Form 941-X final instructions

• Monthly schedule depositors and semiweekly schedule depositors must account for the qualified small business payroll tax credit for increasing research activities (line 12) when reporting their tax liabilities on line 17 or Form 943-A.
• Use a minus sign (if possible) to show an adjustment that decreases the total taxes shown on line 9.
• No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

Federal law also requires you to pay any liability for the employer share of social security tax and Medicare tax. This share of social security and Medicare taxes isn’t withheld from employees. If you file Form 943 electronically, you can e-file and use EFW to pay the balance due in a single step using tax preparation software or through a tax professional.

Schedule 1 (Form , Additional Income and Adjustments to Income

However, if you deposited all your FUTA tax when it was due, you may file Form 940 by February 10, 2022.If lines 17 and 18 don’t apply to your business, then just leave Part 3 blank and move on to Part 4. Your total liability for the quarter must be equal to line 12 on your form 941. If you are an employer, you likely need to fill out and file IRS Form 941 for each quarter. To avoid major mistakes, learn the Form 941 instructions for 2021 and how to fill out line by line. If you’ve used a paid preparer (someone like a CPA or tax professional you’ve paid to complete this form on your behalf), they’ll complete the “Paid Preparer Use Only” section underneath your signature. Any tax payments related to Form 941 can be made through EFTPS.

Schedule 3 (Form , Additional Credits and Payments

• In response to the COVID-19 pandemic, the federal government enacted legislation that includes deferral of the employer’s portion of Social Security tax.
• Line 5a should not include qualified sick leave wages reported on line 5a(i), or qualified family leave wages reported on line 5a(ii).
• If you’re a monthly schedule depositor and accumulate a $100,000 tax liability on any day during the deposit period, you become a semiweekly schedule depositor on the next day and remain so for at least the rest of the calendar year and for the following calendar year.

If the employee asks you for Form W-2, give the employee the completed form within 30 days of the request or the last wage payment, whichever is later. If you filed Form 943 electronically, don’t file a paper Form 943. For more information about filing Form 943 electronically, see Electronic filing and payment , earlier. You may be eligible to apply for an installment agreement online if you can’t pay the full amount of tax you owe when you file your return. For more information, see What if you can’t pay in full , later. If you fail to submit a deposit transaction on EFTPS by 8 p.m.

Therefore, an employer that receives a PPP loan is entitled to defer the payment and deposit of the employer’s share of Social Security tax, even if the loan is forgiven. The new line 33b will correct the portion of the deferred amount of the employee share of Social Security tax. This correction applies to the third and fourth quarters of 2020 included on Form 941, line 13b. Enter the name, phone number, and the five-digit personal identification number of the specific person to speak with—not the name of the firm that prepared your tax return.

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If line 16 is less than $1, we will send you a refund or apply it to your next return only if you ask us in writing to do so. If line 13 is more than line 14, enter the difference on line 15. Enter Irs Releases Final Instructions For Payroll Tax Form Related To Covid the amount of the credit from Form 8974, line 12 or, if applicable, line 17. Use a minus sign (if possible) to show an adjustment that decreases the total taxes shown on line 9.

Because the payroll deferral was only a deferral of deposit obligations and not a change to the amount of an employer’s deposit obligations, the original Instructions provided that nothing could be done with respect to already-deposited FICA taxes. The instructions note employers who use EFTPS to deposit taxes are required to identify the amount deposited for each category of tax (for example, Social Security and Medicare). However, the entries are for informational purposes only and the IRS does not use this information to compare the reported liabilities on the employment tax return and the total deposits made.