What Employers Need to Know About the New IRS Form 941 Draft for 2021

Form 941 has been through a lot of changes for the last few quarters, and so far, that trend is continuing in 2021. The IRS just released a new draft of Form 941. Thankfully for small businesses and employers, these most recent changes shouldn’t make filing too challenging for your business. 

This new draft anticipates IRS updates for the end of Social Security tax deferrals.   

What is Form 941?

Form 941 is the Employer’s Quarterly Federal Tax Return. Employers use this form to report amounts withheld from their employee paychecks for social security, income, and Medicare taxes. Businesses with one or more employees file this form four times a year.

Click here for more on how to meet your Form 941 quarterly deadlines

What’s New on the Drafted Form 941 for Quarter 1, 2021?

The CARES Act and a 2020 presidential memorandum let employers defer employer and employee potions of Social Security taxes from  September 1, 2020, to December 31, 2020. This was an option to help businesses during COVID-19. Form 941 for 2020 was updated to give employers the option to report deferrals of social security taxes. 

Since the Social Security deferment timeline has ended, the IRS is updating Form 941 again. Now, that deferral period has expired and the IRS is updating Form 941 once again. 

Line-by-Line Form 941 Changes for 1st Quarter 2021

The IRS is planning to update Form 941 to mark the end of deferrals. Now, in the most recent draft, lines about reporting deferrals have been removed. checkout the changes in Form 941 for 2021.

Line 1 has just been updated for the 2021 business quarters. Employers will be able to report the number of employees that received wages, tips, or other compensation for Mar. 12 (Quarter 1), June 12 (Quarter 2), Sept. 12 (Quarter 3), or Dec. 12 (Quarter 4).

Line 13b, which was for reporting the deferred amount of social security tax, is now just reserved for future use.  

Line 13e used to be for reporting total deposits, deferrals, and refundable credits. Now it’s just for reporting total deposits and refundable credits.

Line 13g no longer asks employers to report deferrals. Now, it is just for reporting total deposits and refundable credits, excluding advances.

Line 24 used to be for reporting the employee portion of the deferred amount reported on Line 13b.” This line is also just reserved for future use on the drafted Form 941. 

When Is Form 941 Due for 2021

Employers file Form 941 for each quarter. Here are your 941 due dates for 2021:

1st Quarter Form 941 Deadline: April 30, 2021

2nd Quarter Form 941 Deadline: August 2, 2021

3rd Quarter Form 941 Deadline: November 1, 2021

4th Quarter Form 941 Deadline: January 31, 2022

How to File the Updated Form 941 for 2021

For now, Form 941 updates are still just a draft. ExpressEfile is committed to supporting the most up-to-date version of your IRS forms for 2021. When the IRS releases the updated form, you’ll be able to e-file it safely and meet your deadlines easily. 

Visit this blog for our guide to avoiding IRS penalties on Form 941.

As always, we’re here to keep you up to date on IRS news. When it’s time to E-file Form 941 for your 1st Quarter of 2021, we’ll be here to help. 

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