IRS adds caution on retention credits to Form 941
Thursday, April 16, 2020

IRS adds caution on retention credits to Form 941

By Payroll and Entitlements Editorial Staff

The IRS has added this caution to Form 941, Employer's QUARTERLY Federal Tax Return and its Instructions:

Employee Retention Credit for Employers Subject to Closure Due to COVID-19 Crisis The Coronavirus Aid, Relief, and Economic Security (CARES) Act supports certain employers that operate a business during 2020 and retain employees, despite experiencing economic hardship related to the COVID-19 crisis, with an employee retention credit. The refundable tax credit is equal to 50% of qualified wages paid to employees after March 12, 2020, and before January 1, 2021. If you paid any qualified wages between March 13, 2020, and March 31, 2020, inclusive, you will include 50% of those wages together with 50% of any qualified wages paid during the second quarter of 2020 on your second quarter Form 941, 941-SS, or 941-PR to claim the employee retention credit. Do not include the credit on your first quarter Form 941, 941-SS, or 941-PR.

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