Form 941-X

Form 941-X is a tool that allows employers to make changes to their Form 941 tax return.

Form 941-X is a tax amendment that can be used to correct errors or make legal changes on an employer’s Quarterly Federal Tax Return. It can also be used to request a refund of overpaid income, social security, or Medicare taxes that were withheld from employee wages. Form 941, or the Employer’s Quarterly Federal Tax Return, is filed with the IRS each quarter to report payroll information and calculate taxable amounts. The IRS uses this information to determine the amount of income tax, social security tax, and Medicare tax that the business owes or is due to be refunded.

For many employers, it is important to file Form 941-X each quarter to correct or make legal changes on the quarterly Form 941, such as claiming the COBRA premium assistance credit or calculating the employee retention credit (ERC). The ERC is an incentive to encourage businesses to keep their employees by reducing unemployment claims and providing them with a tax credit for qualified wages paid during a specific period.

How to fill out Form 941-X
Form 941-X 1

How to file Form 941-X?

When filing Form 941-X, you must include a copy of the original Form 941, and you must file it within three years from the date you filed your first Form 941 or two years after you paid the tax. If you fail to do this, the statute of limitations on filing an amended return will expire.

In addition, if you want to claim the COBRA premium assistance credit on Form 941-X for a tax year in which the statute of limitations on corrections has not expired, you should use the April 2017 revision 941-X and make the necessary corrections on lines 20a and 20b.

The IRS has updated the instructions on Form 941-X for 2021 and 2022, making it easier for taxpayers to correct eligible COVID-19 credits claimed on their prior quarterly Form 941. For example, you can now claim the earned paid qualifying sick and family leave earnings and wages on Form 941-X and the COBRA premium assistance credit on Form 941-X.

How to fill out Form 941-X?

When filing Form 941-X, there are several things to keep in mind:

  • First, you’ll need to know how many employees work for your company and their wages.
  • You’ll also need to provide information about the business’s EIN and other financial details.
  • Once you’ve gathered the necessary paperwork, you must fill out Form 941-X for each quarter that needs corrections. It’s best to use a different form for each quarter. For example, you’ll need a different 941-X for Quarter 1 than for Quarter 2.
  • In the upper right corner of Form 941-X, enter the calendar year for the quarter and the date when you discovered errors in your form. 
  • Then, select whether you’re filing an updated job tax return (box #1) or a claim for the tax that was not withheld from the employee’s pay in box #2. In most cases, you’ll choose the latter option.
  • Part 2 of the form will require you to enter the number of employees, their wages, and the amount of federal tax that was withheld from their paychecks.
  • You’ll also need to enter the correct social security and Medicare numbers.
  • Enter the tax due or overpaid on the previous form you filed with the IRS.
  • In Part 3, you’ll need to complete the corrections for each quarter that requires an adjustment.
  • Check off the boxes next to each correction and include the total amount of each error and the difference between what was previously reported on your form and what you’re reporting now.
  • Next, explain why you’re making the adjustments you’ve made. This will help the IRS process your corrections quickly and efficiently.

If you’re eligible to claim the ERTC, you should file Form 941-X as soon as possible. This will allow you to receive a refund for the credits you missed out on. You must do this within three years of your original tax filing.

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