The IRS released a draft of new changes that further revise Form 941-X for 2020.
As a business owner, it’s nice to know there’s a plan in place for when things don’t go as planned. Lately, there have been a lot of unexpected events, but when it comes to taxes, you’re never on your own. On October 2, 2020, The IRS released a new draft of Form 941-X. This form allows you to correct any mistakes you make on your Employer’s Quarterly Federal Tax Return.
COVID-19 has caused the IRS to make a lot of updates for tax relief. The IRS revised Form 941-X on September 10th, and just released a draft of new changes that are coming soon for 2020. Here’s our rundown on the new draft of Form 941-X and what to expect when you make Form 941 corrections this year.
What is Form 941-X?
Form 941 is a correction form for your Employers Quarterly Federal Tax Return, Form 941. Employers have quarterly IRS filing requirements to report withholdings from employee paychecks for income tax, Social Security, and Medicare taxes. Sometimes, mistakes get made. If you noticed incorrect information on a previously filed Form 941, you should file Form 941-X as soon as possible to fix the error and avoid IRS penalties.
Since there are have been a lot of changes to Form 941 this year to support tax credits and deferment decisions for COVID-19 tax relief, Form 941-X also needed an update.
Changes to Expect on Form 941-X
The new Form 941-X is drafted to allow employers to fix mistakes they made while reporting COVID-19 related tax relief on new data-entry fields of Form 941. Here are the lines we can expect to see changes on in the revised version:
Line 24 makes corrections on line 13b of Form 941. On the draft of Form 941-X, this line reflects the federal payroll tax deferment decision for COVID-19. Employers can now defer both the employee and employer portions of Social Security, report those decisions on Form 941, and then use the new version of Form 941-X to correct any mistakes.
Since Form 941 has been through a lot this year, Line 33 of Form 941-X is being separated into Line 33a and 33b so that employers can make all the corrections they need to on the new sections of their return.
- Line 33a
On the new draft of Form 941-X, this line will allow employers to adjust the qualified wages they reported for employee retention credit on Line 24 of Form 941.
- Line 33b
This new line will allow employers to adjust the amounts they reported on Line 24 and Line 13b of Form 941 for deferring the employee portion of Social Security taxes.
How to File the Updated Form 941-X
When the IRS releases the final version of Form 941-X, employers will be able to file it safely and simply with ExpressEfile. For right now, all we have is a draft anticipating the update, but ExpressEfile is committed to staying up to date with the latest IRS changes.
If you need any help with the changed fields, our support team is always just an email away.
Take the way you manage your business to the next level when you file Form 941 and make corrections with the best filing process for your IRS requirements.