What You Need to Know About Just Released IRS Form 941-X

The new revisions on correction Form 941-X are finally here! On November 13, 2020, the IRS released the updated Form 941-X and instructions on how to file it. 

What’s New on IRS Form 941-X 

Following all the changes to Form 941 for COVID-19 tax relief, Form 941-X needed to be able to correct a lot more mistakes. Now, employers can file Form 941-X to correct the amounts they reported for these new fields:  

  • Credit for qualified sick and family leave wages
  • Employee retention credit
  • Employer share of social security
  • Employee share of social security

Line 24

Line 24 on the updated Form 941-X is used to correct line 13b on Form 941. Employers can adjust amounts reported for deferral decisions on the employer and employee portions of Social Security.

Line 33

To accommodate for all the new information on Form 941, Line 33 has been split into Line 33a and 33b, and now allows corrections on social security tax deferment for 2020.

Line 33a

This line will allow employers to adjust the qualified wages reported for employee retention credit on Line 24 of Form 941.

Line 33b

Line 33b lets employers adjust the amount reported on Line 24 and Line 13b of Form 941, regarding deferring the employee portion of social security taxes.

The IRS Form 941-X changes state true to what was planned out in the draft released on October 2, 2020. For line-by-line changes and more instructions, check out this blog

Form 941-X Explained

Form 941-X is a correction form that allows employers to fix mistakes on Form 941. Form 941 is a quarterly form that employers use to report wages withheld from employee paychecks for income tax, social security, and Medicare taxes. Since most businesses have to file this form four times a year, there’s a lot of opportunities for mistakes. Filing Form 941-X to fix any errors is the best way for employers to stay IRS compliant, avoid penalties, and quickly resolve any issues with Form 941. 

Click here to find out about IRS Form 941 penalties and how to avoid them.

Who Needs to File Form 941-X

If you found a mistake on a previously filed Form 941, you need to file Form 941-X. Form 941-X allows you to fix issues related to:

  • Wages, tips, and other compensation
  • Federal income tax withheld from employee’s paycheck and extra compensation
  • Taxable social security wages
  • Taxable social security tips
  • Taxable Medicare wages and tips
  • Taxable wages and tips subject to Additional Medicare Tax withholding
  • Qualified small business payroll tax credit for increasing research activities

If you misreported an amount in any of those categories, you can file Form 941-X and correct your mistake. 

When is Form 941-X Due?

Since IRS Form 941-X is just a correction form, there’s no real due date associated with it. It’s more of an emergency solution than an IRS deadline. If you find a mistake on a previously filed Form 941, you need to file Form 941-X as soon as possible. Even though there’s no specific date that employers need to file Form 941-X by, you do need to catch and correct your error within three years of the initial filing. If misreported and paid a tax, you have two years from the date of that payment to fix it. 

How to File the Updated Form 941-X

Filing Form 941-X is the fastest and safest way to correct Form 941 mistakes. With ExpressEfile, you can generate, download, and print your form in just a few minutes. If you have any questions our friendly, U.S.-based support team is here to help. 
Get access to the most up-to-date version of Form 941-X and keep your business penalty-free this season.

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