If your Form 941 didn't claim the correct amount for the employee retention credit because you received a Small Business Interruption Loan under the PPP, you may file Form 941-X and complete Worksheet 2 to claim the correct amount of the credit. Employee Retention Credit Updates - Wegner CPAs See IRS.gov/ETD for more information about the interaction of credits and the deferral of employment tax deposits and payments. Proc. ExampleNonrefundable portion of credit for qualified sick and family leave wages increased. If you're correcting a quarter that began before July 1, 2020, you must leave blank line 33b. In column 2, enter the amount you originally reported or as previously corrected. .Form 941-X and these instructions use the terms nonrefundable and refundable when discussing credits. If youre correcting the refundable portion of the employee retention credit that you reported on Form 941, line 13d, for qualified wages paid after March 12, 2020, and before July 1, 2021, enter the total corrected amount from Worksheet 2, Step 2, line 2k, in column 1. If we receive Form 941-X after the due date, we will treat Form 941-X as filed on time if the envelope containing Form 941-X is properly addressed, contains sufficient postage, and is postmarked by the U.S. For more information, see Credit for COBRA premium assistance payments is limited to periods of coverage beginning on or after April 1, 2021, through periods of coverage beginning on or before September 30, 2021 under Whats New. New guidance! File your 2020 941x's with the employee retention credit For lines 1 and 2, if you underreported an employment tax credit or the amount of social security tax deferred, treat it like you overreported a tax amount. In column 2, enter the amount you originally reported or as previously corrected. Amounts Under Certain Collectively Bargained Agreements Allocable to Qualified Sick Leave Wages for Leave Taken After March 31, 2021, and Before October 1, 2021, 38. The IRS recently issued guidance explaining when and how employers that received a loan under the Paycheck Protection Program (PPP) can retroactively claim the employee retention credit (ERC) for 2020. Qualified Health Plan Expenses Allocable to Wages Reported on Form 941, Line 24, 35. Check the appropriate box for the one quarter youre correcting. If you claimed the credit for qualified sick and family leave wages for leave taken after March 31, 2020, and before April 1, 2021, on your original Form 941 for the quarter, and you make any corrections on Form 941X for the quarter to amounts used to figure this credit, you'll need to refigure the amount of this credit using Worksheet 1. This applies when affected employees didnt give you consent to file a claim for refund for the employee share of social security and Medicare taxes, they couldnt be found, or they didnt give you a statement described on line 5b. In the year that the period of limitations for the previously filed Form 941 expires, file Form 941-X at least 90 days before the expiration date.. Because Form 941-X may be used to file either an adjusted employment tax return or a claim for refund or abatement, you must check one box on either line 1 or line 2. Note the date you discovered the errors 6. The amounts underreported relate to an issue that was raised in an examination of a prior period. Be sure to explain the reasons for any corrections on line 43. The deferred amount of the employee share of social security tax was only available for social security wages of less than $4,000 paid to an employee in any biweekly pay period (or the equivalent threshold amount for other pay periods) paid on a pay date during the period beginning on September 1, 2020, and ending on December 31, 2020. To correct the error, figure the difference on Form 941-X as shown. Qualified family leave wages paid with respect to leave taken after March 31, 2020, and before April 1, 2021, aren't subject to the employer share of social security tax; therefore, the tax rate on these wages is 6.2% (0.062). Use line 26c only for corrections to quarters beginning after March 31, 2021. Amounts Under Certain Collectively Bargained Agreements Allocable to Qualified Family Leave Wages for Leave Taken After March 31, 2021, and Before October 1, 2021, Part 4: Explain Your Corrections for This Quarter, 41. Corrections of Both Underreported and Overreported Amounts, Worksheet 1. The following persons are authorized to sign the return for each type of business entity.