Here’s your rundown on the IRS changes to Form 941! Know what to expect when you meet your second-quarter July 31, 2020 deadline.
So much has changed recently, and Form 941 is no exception. The IRS has issued a new Employer’s Quarterly Federal Tax Return for 2020. The updated Form 941 reflects the resources and tax relief that are available to your business during COVID-19.
The IRS’s updated Form 941 has 23 new data-entry fields. Here’s the inside scoop:
Credit for Qualified Sick and Family Leave wages.
The Families First Coronavirus Response Act (FFCRA) lets employers use refundable tax credits to pay employees for qualifying sick and family leave from Apr 1, 2020, to Dec 31, 2020. Now, Form 941 updates allow employers to report those credits.
Employee Retention Credit
Employee Retention Credit is offered under the CARES Act. It provides tax relief for employers who have been hurt by COVID-19 but have still managed to keep employees on their payroll. One way employers can receive Employee Retention Credit is by reporting their financial information on Form 941 for 2020.
If you already got an advance on Employee Retention Credit or credit for qualified sick and family leave wages with Form 7200, you can now report that on your Form 941 as well. For more information about how you can keep people on payroll with refundable tax credits, check out this blog.
Wherever your business stands with Employee Retention Credit, Form 941 now allows you to bring the IRS up to speed.
Deferred amount of the Employer Share of Social Security Tax
Since COVID-19 tax relief impacts how much employers pay on the Social Security portion of employment taxes, Form 941 has been updated to allow you to record that information. Some employers deferred this payment in anticipation of their refundable tax credits, so you can use Form 941 to report that as well.
Because of all of these new elements and programs that businesses have incorporated into their finances for COVID-19, there is a lot to cover on Form 941. When you meet your 2020 second-quarter deadline, you will be working through a variety of new fields, in addition to your usual filing experience.
When do I have to file the new Form 941?
The IRS just released the updated Form 941, but it’s going into effect as soon as possible. When you file for your second quarter of 2020, April 1 to June 30, you’ll be using the new form.
How do I file the updated IRS Form 941?
ExpressE-file is the secure way to file the most current version of Form 941. E-filing with professional tax software is the best way to avoid last-minute mistakes, especially when there are so many new sections to navigate on Form 941.
The IRS released 19 pages of Form 941 instructions, but that doesn’t mean you have to figure it all out on your own. As always, our software will guide you right through the filing process with helpful prompts. If you have any questions, we are here to help.
Express E-file is staying up to date with the newest releases on all your forms. Stay tuned in for tax tips and the latest updates from the IRS. When it’s time to file Form 941, we’ve got you covered.