The IRS has recently revised the instructions for Form 941-X. Here’s everything you need to know to stay on top of your tax game.
Earlier in 2021, the IRS released a revised version of Form 941-X, which specifically deals with the adjusted Employer’s quarterly federal tax return or claim for refund. The instructions have also been revised to help taxpayers accommodate the new reporting guidelines.
The revision allows taxpayers to report and correct certain COVID-19-related employment tax credits, such as paid sick wages, employee retention credits, and more, which were previously incorrectly reported on Form 941.
The IRS recommends using the revised returns and instructions to be consistent with the reporting guidelines and avoid rejected returns.
Form 941-X Revisions: What Really Changed
New Credits
The revised Form 941-X has a comprehensive table of contents that helps the taxpayers report Covid-specific information previously incorrectly reported on Form 941.
Covid-19 new credits include paid qualified sick and family leave wages, employee retention credit, and the COBRA premium assistance tax credit.
New Worksheets
The revised instructions include four new worksheets in addition to the one worksheet that the IRS Form 941 previously included. The four new worksheets are used to figure and report additional credits. Worksheet 1 has also been updated. It is essential for third-party payers to complete each worksheet for each client they work with.
Blank Lines
The revised instructions allow taxpayers to leave certain lines blank if the context doesn’t apply to the taxpayer.
| If Quarterly Corrections Began Before | Then Leave These Lines Blank |
| April 1, 2020 | 9, 10, 17, 18a, 24, 25, 26a, 28, 29, 30, 31, 32, 33a, 33b, and 34. |
| April 1, 2021 | 18b, 18c, 18d, 26b, 26c, 35, 36, 37, 38, 39, and 40. |
| July 1, 2021 | Line 31b |
Utilize Tax1099’s sleek e-filing features to prepare and eFile Form 941-X easily. Still unsure about the updates? Need more information? Contact our tax team to get expert insights for free at [email protected]
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