IRS posts draft of Form 941; 941-X issued
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Monday, September 21, 2020

IRS posts draft of Form 941; 941-X issued

By Payroll and Entitlements Editorial Staff

The IRS has posted a draft of Form 941, Employer’s QUARTERLY Federal Tax Return. It incorporates the reporting of any (employer and employee portions) deferred social security amounts on Line 13(b). It also requires any deferred employee social security to be reported separately on Line 24.

The President issued an executive order allowing for the deferral of the employee portion of social security tax during the period from September 1, 2020, through December 31, 2020 (see Payroll Management Guide Report Letter 2664, August 18, 2020). The Coronavirus, Aid, Relief and Economic Security Act (CARES Act) (P.L. 116-136) allowed employers to defer the deposit and payment of the employer's share of social security taxes (see Payroll Management Guide Report Letter 1564/2647, April 7, 2020).

Form 941-X. The IRS also posted Form 941-X, Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund, (plus instructions). Form 941-X has been significantly revised to allow for correcting COVID-19 related employment tax credits and other tax relief related to COVID-19 reported on Form 941. According to the Instructions, there will be an October 2020 revision of Form 941-X that will be used to make corrections to the third quarter 2020 Forms 941.

SSA and the Wage Reporting Community The upcoming revision of Form 941-X was confirmed in a September 16 meeting between the SSA and the Wage Reporting Community, which included the IRS. The updated version would include and reporting of employee deferred social security taxes.

In addition, it was indicated at the meeting that the upcoming Form 941 Instructions would include specific information on any deferred social security taxes and possibly an update on Form W-2 reporting. Wolters Kluwer will report on any new developments as they are released by the SSA and IRS.

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