Form 941 Changes: Everything You Need to Know


What’s a Form 941?

This the form used by employers to report specific information to the Internal Revenue Service (IRS). Figures such as the employment taxes from the employee pay and the amount owed to the IRS. This form is also commonly referred to as the Employer’s Quarterly Tax Form. 

Do I Need To File One?

If you pay people who are subject to federal income tax withholdings (social security and Medicare too), then you will file a Form 941 each quarter to report the following:

  • Wages you’ve paid
  • Reported tips
  • Amount of federal income tax withheld 
  • How much the employer and employee have paid towards social security and Medicare.

Why Are There Changes To It?

The changes to Form 941 changes are a result of the COVID-19 pandemic. Because of the impact it had on our economy,  there have been employment tax credits and other forms of tax relief. This was aimed at taking the financial strain off small businesses. These may include:

  • Deferred amount of the employer share of social security tax
  • Any payroll tax credits 
  • Credit for qualified sick and family leave wages
  • Employee Retention Credit Programs 

Let’s discuss the changes that have been made to Form 941 that will allow you to report tax credits and relief your business may have received during the pandemic. 

Form 941 Changes

The new credit for qualified sick and family leave wages (due to COVID-19) will have to be reported. This will be done, specifically, on lines 11b and 13c of Form 941. A copy of form 941 is below for you to reference. 

Here’s a list of what else will have to be added due to Form 941 changes:

  • The employee share of social security tax on qualifying sick and family leave wages. Reported on lines 5a(i) and 5a(ii). Line 11b includes additional information about the new credit for qualified sick and family leave wages.
  • Line 11c is the space provided for the employee retention credit. Any health care expenses tied to the retained employees will be reported on line 22. 
  • Employers can defer their social security tax payment for the quarter as well. The amount deferred will be listed on line 13b. Reminder: this is a deferral of debt, not liability. Additional information can be found on line 13b. 
  • Did you file a Form 7200? This is the form employers used to request an advance of the sick and family leave credit. If you did, the amount received (which will be on your Form 7200), gets reported on line 13f. 

PayWow 

Honestly, I tried to make these explanations as simple and clear cut as I could. But here’s the truth: they aren’t either of those things. To add another layer of difficulty, tax guidelines and requirements change quickly. Form 941 changes are a direct result of COVID-19. The types of things you reported on Form 941 at the beginning of the year will not be the same as what you report on at the end of the year. 

There’s good news coming, I promise.

If you use PayWow, we will submit your Form 941’s for you. Not only will they be on time and accurate, but think of the time you’ll save. Instead of trying to chase the revolving door that is tax code, you can invest your time back into growing your business and doing the things you enjoy. 

Try PayWow today. 

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