Form 941 for the 3rd Quarter of 2021: What Small Businesses Need to Know


Fall is in the air and businesses are wrapping up their third-quarter, this means that your Form 941 deadline is approaching. There were so many changes to Form 941 for the second quarter of 2021, that business owners and tax professionals alike needed extra time to adapt to the new form. 

The good news is that there are relatively few changes to Form 941 for the third quarter of 2021! If you filed this form successfully last quarter, you can do it again! 

Here is an overview of what small business owners should know before filing for the upcoming third-quarter deadline. 

Background information on Form 941

If this is your first quarter filing Form 941, welcome to the club! All employers that pay wages that are subject to income tax, social security tax and Medicare tax are required to file Form 941 each quarter with the IRS. 

Once a business files their first 941 return, they are required to file every quarter regardless of whether they have paid wages. There are only a few exceptions to this rule, the main one being for seasonal employers. Seasonal employers are only required to file 941 for the quarters that they operate. 

Form 941 was once an easy and consistent form, but in the past year, the pandemic has totally changed how this form is formatted. The ability to claim COVID-19 tax credits is a great source of relief for businesses, however, calculating and reporting these credits on 941 complicates the filing process.

Compared to the complete overhaul of Form 941 last quarter, the changes to the filing this quarter are totally minor!

Changes to Form 941 for Q3 of 2021

The biggest change to the filing process that employers will face this quarter is calculating the employee retention credit. 

Employers that paid wages qualifying for the employee retention credit last quarter used Worksheet 2 to calculate their credit. Worksheet 2 will be replaced by 941 Worksheet 4 for the third and fourth quarters of 2021. 

Worksheet 4 is designed to calculate the employee retention credit on all qualified wages paid after June 30, 2021. 

Much like Worksheet 2, Worksheet 4 has two steps for employers to follow. 

  • Step 1: Determining the employer share of Medicare taxes
  • Step 2: Calculate the employee retention credit

E-filing is the way to go!

We recommended it last quarter and we are recommending it again. When it comes to filing Form 941 in 2021, e-filing is the way to go! There was a time when Form 941 was easy enough to paper-file, but with all the additional calculations, slower IRS processing times, and quarterly updates, this is no longer the case. 

When e-filing, especially with ExpressE-File, you won’t have to worry if you are using the correct worksheet or if you have chosen the most updated version of the form to fill out.

We update our form process every quarter as the form changes, plus all of the worksheets you need are integrated into the 941 e-filing process. Leave your calculator in the drawer (where it belongs) because our automatic calculations do the work for you!

To eliminate the chance of miscalculations and take the stress out of your quarterly filing, get started with ExpressE-File. You can e-file Form 941 for the third quarter for as low as $3.99!


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