The COVID-19 pandemic has brought sweeping changes to just about everything, including payroll. The various stimulus legislation had significant impacts on payroll reporting, including various payroll tax credits. Accordingly, the IRS issued a revised Form 941, “Employer’s Quarterly Federal Tax Return” and will issue related instructions that go into effect for the 2020 second quarter (the returns to be filed by the end of July 2020). Although the revised form has been released, its instructions are currently still in draft form and are expected to be released in final form by the end of June.
The revised form is expanded from two pages to three pages by adding about 20 new data entry fields. Additionally, the IRS is adding Worksheet 1 to calculate the credit for qualified sick and family leave wages and the employee retention credit. New fields being added include:
Qualified sick and family leave wages
- Credit amount
- Employee share of social security tax on qualified sick and family leave wages
- Qualified health plan expenses allocable to qualified sick and family leave wages
Employee retention credit
- Credit amount
- Qualified wages for the employee retention credit (including qualified wages paid between March 13, 2020 and March 31, 2020)
- Qualified health plan expenses allocable to qualified wages for the employee retention credit
Deferred employer share of social security taxes
- Amounts received from Forms 7200, Advance Payment of Employer Credits Due to COVID-19
The IRS has listed the revised form and draft instructions on their website.