What You Need to Know About 3rd Quarter IRS Form 941 Changes 2020

Employers’ 3rd and 4th Quarter guide to IRS Form 941 changes for COVID-19.

These days, we’re ready for anything. From running errands to running your business, you’ve been adjusting to new social distancing requirements on a daily basis, and filing your employer’s quarterly Form 941 might feel the same way. 

This summer, employers faced major IRS changes on Form 941 when they filed for their second quarter. Now, with the third and fourth quarter deadlines coming up, there are even more new updates on Form 941. Here is what you need to know about payroll deferments and the new lines on Form 941.

In Case You Missed It: Form 941 Quarter 2 Changes

The IRS originally added 23 new data-entry fields to Form 941. These updates allowed employers to report the federal tax relief offered under the FFCRA and the CARES Act for COVID-19 when they filed for their second quarter. The Form 941 changes made room for new tax relief options such as employee retention credit, qualified sick and family leave wages, and deferred employment taxes. 

Find out more about the first COVID-19 IRS Form 941 updates and the impacts of the FFCRA and the CARES Act. For more information about how employee retention credit could help you keep all your employees on staff, click here.

New Developments: Payroll Tax Deferment 

On August 8, 2020, The White House issued a presidential memorandum on deferring payroll tax obligations. This memo told the Department of Treasury to issue guidance for employers on deferring the employee portion of social security taxes. The IRS published more instructions about this on August 28, 2020. 

What Does This Mean For Employers? 

Basically, employers can defer the 6.2% withholding of employee social security taxes. This provision applies to wages paid between September 1 and December 31, 2020. 

As an employer, it’s completely up to you whether you would like to push back paying the employee portion of your social security taxes. If you do take advantage of this tax relief option, you will need to make that tax payment by April 30, 2021.  

New Form 941 Changes for the 3rd and 4th Quarter

Whether you decide to opt into payroll tax deferment or not, you’ll be running into some new lines on IRS Form 941. Here is what to expect: 

Line 1 

When start filing Form 941 online for your third quarter, you’ll see something new right away. This line just indicates that this updated version of Form 941 is only for Quarters 3 and 4.

Line 13 b

Here’s where you can report both the employer and employee share of deferred social security tax if you choose to defer.

Line 24

Here is where you can indicate just the employee share of deferred social security tax. 

Line 25

The IRS is keeping things a little mysterious. This line is just reserved for future use. We’ll be on our toes for the next IRS update.

How to File the New Form 941 

We’re committed to making sure your business has the most up to date version of Form 941 and you everything you need to know about filing. We’ll be here to answer any questions while you enter your information. Once your form is complete, we’ll check for errors and transmit it to the IRS. 

Take good care of your business this quarter and don’t get caught off guard by IRS changes. ExpressEfile makes filing Form 941 for your third quarter simple and safe.

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