The first quarter Form 941 deadline for 2021 is just around the corner. Employers are required to file Form 941 by April 30, 2021. There is a lot to report on Form 941 so here is how to complete your form and meet your deadline easily.
Form 941 Instructions for 2021
Form 941, the Employer’s Quarterly Federal Tax Return allows employers to report amounts withheld from employee paychecks for income, Social Security, and Medicare taxes. Businesses are required to file this form every quarter.
Visit this blog to check on all your IRS Form 941 deadlines for 2021. You can take a look at these line-by-line instructions for filing Form 941, to get a better understanding of how to file your Form 941 return.
Part 1: Wages and COVID-19 Tax Relief
Employers use Part 1 of Form 941 to report information about employees, wages, and federal income taxes withheld from paychecks. To complete Part 1, fill out the following lines:
Employee Information – Line 1: Enter the number of employees you are paying for this quarter.
Total Wages, Tips, and Other Compensation – Line 2: Enter the total amount you’ve paid your employees during the quarter.
Withholdings – Line 3: Enter the amount you’ve withheld from employee paychecks for income tax, Social Security, and Medicare taxes.
Taxable Wages – Lines 5a, 5a1, 5a2, 5d: Enter total taxable social security wages paid to your employees during this quarter, as well as wages for qualified sick and family leave.
Adjustments – Lines 8 and 9: Use these lines to make adjustments for sick pay, tips, and group-term life insurance.
Tax Credits -11a: Enter any qualified small business payroll tax credits for increasing research activities.
Nonrefundable Tax Credits – Lines 11b and 11c: These lines were added for COVID-19 tax relief. You can report the non-refundable portion of credits received for qualified sick and family leave wages and employee retention credit.
Total Deposits – 13a: Enter your total deposits for the quarter.
Line 13b is reserved for future use on Form 941 for the 1st Quarter. Nothing needs to be reported on this line.
Refundable Tax Credits – Line 13c and 13d: Here is where you’ll report the refundable portion of COVID-19 credits for qualified sick and family leave wages and employee retention credit.
Line 13e no longer allows employers to report deferrals. Use this line to report your total deposits and refundable credits.
Advance Credits – 13f: If your business filed Form 7200 to receive an advance on credits for COVID-19 tax relief, you’ll report those credits here.
Line 13g, like Line 13e, no longer supports deferrals. Use this line to report total deposits and refundable credits, excluding advances.
Line 24 is reserved for future use.
For more on Form 941 and a closer look at the latest IRS updates, visit this blog.
Part 2: Tax Liabilities and Time of Deposit
Check the boxes in this section to let the IRS know about tax liabilities and the time of deposit. Also, be prepared to provide your tax liability amounts for each quarter.
Part 3: Your Business Information
To complete Form 941 Part 3, let the IRS know whether your business was open during the quarter. This is where you can designate whether you are a seasonal or year-round employer. Seasonal employers are only required to file Form 941 for the quarters in which they pay employees.
For this section, you’ll also need to provide details about your health plan and any tax credits, employee retention credit, or qualified sick and family leave wages for COVID-19 tax relief.
Part 4: Third-Party Designee
Use this section to designate whether you would like the IRS to correspond with someone from your business about your return.
Part 5: Your Signature
To sign Form 941 electronically, use your Online Signature PIN. If you don’t have one, you can e-sign using Form 8453-EMP.
When you e-file Form 941 with ExpressEfile, you can review your return for mistakes. Our software runs an internal audit, checking your return for mistakes and discrepancies so you can catch errors easily. After you correct mistakes, you’ll be able to transmit your return to the IRS instantly.
For more information on how to file Form 941 and avoid IRS penalties, click here.
If you run into any questions, we are always here to help. Our support team is friendly, U.S.-based, and always happy to help. Don’t forget to file Form 941 online by April 30, 2021 to meet your first quarter deadline.