The IRS released a New Draft of Form 941-X for Form 941 Corrections


The Form 941 deadline for the second quarter of 2021 has come and passed this week. Many employers might be wondering what they are required to do if they find an error in their filing. The IRS approved answer is, employers should file a correction form as soon as it is available. 

This correction form is Form 941-X. This can be used to correct a variety of errors when filed with the IRS. The IRS has released a new draft of the Form 941-X to help employers correct errors made during the second quarter of 2021. 

This is what you should be aware of when it comes to filing the Form 941-X. 

Background Information on the Form 941-X

This form is used to correct certain types of errors made by employers on their Form 941, Employer’s Quarterly Federal Tax Return. If you reported any of the following amounts incorrectly, you will need to file the Form 941-X. 

  • Wages, tips and compensation
  • Income tax withholding from an employees’ pay
  • Taxable social security wages or tips
  • Taxable Medicare wages and tips
  • Taxable wages and tips that are subject to additional Medicare Tax Withholding
  • The qualified small business payroll tax credit for increasing research activities

If you reported the incorrect number of employees that you paid wages to, a Form 941-X is not required. 

If you over reported or unreported payroll taxes, there is no question about it, you are required to file a correction. 

What’s New in the Form 941-X Draft? 

Before we get into all of the changes to Form 941-X, let’s establish a fact. IRS drafts are never meant to be filed with the IRS, they are only released as guide, so employers and taxpayers will know what to expect once the form is officially revised. 

That said, if you just filed your Form 941 and have noticed errors, you must wait until the official form is released. There is no need to file the draft, because it is not an official form. It is also not necessary to file the current version of Form 941-X, unless you are filing corrections for a previous quarter. Once the official form is released, then you can use it to report your corrections for the second quarter of 2021. 

Here are the changes that have been made to Form 941-X based on the updated Form 941 for the second quarter of 2021: 

Part 1: 

In this section of the form, employers can indicate if they have overreported or underreported tax payments. Nothing has been changed in part 1. 

Part 2: 

Employers that have only underreported taxes, can skip the certifications in Part 2. Employers that have overreported tax payments should check the boxes that apply. 

Part 3: 

In part 3, employers will find fields that correspond to the Form 941. On any of these lines where errors were made, employers should enter the correct information in column 1, the incorrect (previously reported) amount in column 2, and the difference in column 3. For column 4, follow the instructions on the form.

The following lines have been updated in this section of the form: 

Lines 9-10
Lines 16, 17, 18, 18a, 18b, 18c, and 18d
Lines 25, 26a, 26b, and 26c
Lines 28, 29, 30, 31a, 31b, 32
Lines 33a, 33b, 34
Lines 35, 36, 37, 38, 39, 40

Part 4: 

In Part 4, employers will still explain their corrections, however instead of doing this on lines 35-37, like last quarter, employers will use lines 41-43. 

Lines 41, 42, 43

Part 5: 

In Part 5, employers will still sign their form, this hasn’t changed. 

Stay Tuned for the Finalized Form 941-X

We can expect the IRS to finalize this form in the near future. Once this form is updated, ExpressEfile is here for you! We support the completion of this form and will integrate all the changes required into our filing process. 

In the meantime, you can check out the IRS draft of Form 941-X here. 


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