Fillable Form 941-X (2020)

What is the Form 941-X?

Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund Form, is used to correct any errors on a Form 941, Employer’s Quarterly Federal Tax Return.

Federal law requires employers to withhold certain taxes from their employee’s pay. Each time they pay an employee’s wages, they must withhold (or in other words take out of their employee’s pay) certain amounts of what is known as federal income tax, social security tax, and medicare tax. Additional medicare tax must also be withheld from wages paid to an employee in excess of $200,000 in a calendar year. Under the withholding system, taxes withheld from employees are credited to them in payment of their tax liabilities.

Federal law also requires employers to pay any liability for the employer share of social security and medicare taxes. This share of social security and Medicare taxes isn't withheld from employees.

Sometimes, taxes may be over or underreported on a Form 941, or other important information may be outdated or simply erroneous. In order to avoid issues with tax payments such as potential cases of tax evasion or overpaying taxes, Form 941-X is filed as soon as possible to correct the errors as they are noticed by either the taxpayer or the IRS.

How do I fill out Form 941-X?

Form 941-X is a long, but ultimately very simple form to fill out. Make sure to have the relevant documents prepared in order to ensure that you are entering the correct information in the correct areas.

Employer Information

Employer Identification Number

Enter your Employer Identification Number (EIN).

Name

Enter your full legal name - not your trade name.

Trade Name

If you have a trade name, enter it here.

Address

Enter the following information on your address;

• Number
• Street
• Suite or Room Number
• City
• State
• ZIP Code
• Foreign Country Name (If applicable)
• Foreign Province/County (If applicable)
• Foreign Postal Code (If applicable)

Return Being Corrected

Check the box that corresponds to the form you are correcting using this 941-X form, then check the box that corresponds to the quarter you are correcting information for on that form. Finally, enter the year that the form being corrected was filed in the space provided.

Date Errors Were Discovered

Enter the date that you discovered that there were errors in the above indicated return.

Part 1 - Process

Select only one of the boxes in the lines provided to indicate what errors you are correcting for the given 941 form.

• Line 1 - Adjusted Employment Tax Return - select this if you have underreported tax amounts and/or if you have overreported tax amounts and would like to use the adjustment process to correct the errors.
• Line 2 - Claim - select this if you have overreported tax amounts only, and if you would like to use the claim process to ask for a refund or abatement of the amount shown in line 27. Do not select this if you have underreported tax amounts on this form.

Part 2 - Certifications

Line 3

Check this box to certify that you have filed or will file all necessary and required tax forms.

Line 4

If you checked line 1 because you’re adjusting overreported federal income tax, social security tax, Medicare tax, or Additional Medicare Tax, check allthe below boxes that apply. At least one box must be checked.

• I repaid or reimbursed each affected employee for the over-collected federal income tax or Additional Medicare Tax for the current year and the over-collected social security tax and Medicare tax for current and prior years.
• The adjustments of social security tax and Medicare tax are for the employer’s share only.
• The adjustment is for federal income tax, social security tax, Medicare tax, or Additional Medicare Tax that I didn’t withhold from employee wages.

Line 5

If you checked line 2 because you’re claiming a refund or abatement of overreported federal income tax, social security tax, Medicare tax, or Additional Medicare Tax, check all the below boxes that apply. You must check at least one box.

• I repaid or reimbursed each affected employee for the over collected social security tax and Medicare tax.
• I have a written consent from each affected employee stating that I may file this claim for the employee’s share of social security tax and Medicare tax.
• The claim for social security tax and Medicare tax is for the employer’s share only.
• The claim is for federal income tax, social security tax, Medicare tax, or Additional Medicare Tax that I didn’t withhold from employee wages.

Name, Employer Identification Number, Quarter Corrected and Correcting Calendar Year

Enter the following information in the spaces provided in each page of the document:

• Full legal name (not your trade name)
• Employer Identification Number (EIN)
• Correcting Quarter
• Correcting Calendar Year

Part 3 - Corrections for This Quarter

For each Line in this section, enter the necessary information for each column (Total Corrected Amount, Amount Originally Reported, Difference, Tax Correction). If any line does not apply, leave it blank.The Lines are, in order:

Lines 6-22

• Wages, Tips, and Other Compensation
• Federal Income Tax Withheld from Wages, Tips, and Other Compensation
• Taxable Social Security Wages
• Qualified Sick Leave Wages
• Qualified Family Leave Wages
• Taxable Social Security Tips
• Taxable Medicare Wages and Tips
• Taxable Wages and Tips Subject to Additional Medicare Tax Withholding
• Section 1312(q) Notice and Demand
• Tax Adjustments
• Qualified Small Business Payroll Tax Credit for Increasing Research Activities
• Nonrefundable Portion of Credit for Qualified Sick and Family Leave Wages for Leave taken before April 1, 2021.
• Nonrefundable Portion of Employee Retention Credit
• Nonrefundable Portion of Credit for Qualified Sick and Family Leave Wages for Leave Taken after March 1, 2021 and before October 1, 2021.
• Nonrefundable Portion of COBRA Premium Assistance Credit
• Number of Individuals Provided COBRA Premium Assistance
• Special Addition to Wages for Federal Income Tax
• Special Addition to Wages for Social Security Taxes
• Special Addition to Wages for Medicare Taxes
• Special Addition to Wages for Additional Medicare Tax

Line 23

Combine all the amounts of Column 4 for Lines 7 through 22 and enter the sum here.

Lines 24-26c

• Deferred Amount of Social Security Tax
• Refundable Portion of Credit for Qualified Sick and Family Leave Wages for Leave Taken before April 1,2021
• Refundable Portion of Employee Retention Credit
• Refundable Portion of Credit for Qualified Sick and Family Leave Taken after March 31, 2021, and before October 1, 2021
• Refundable Portion of COBRA Premium Assistance Credit

Line 27

Combine the amounts of Column 4 for Lines 23 through 26c, and enter the sum here.

If line 27 is less than zero:

• If you checked line 1, this is the amount you want applied as a credit to your Form 941 or 941-SS for the tax period in which you’re filing this form.
• If you checked line 2, this is the amount you want refunded or abated.

If line 27 is more than zero, this is the amount you owe. Pay this amount by the time you file this return.

Lines 28-34

• Qualified Health Plan Expenses Allocable to Qualified Sick Leave Wages for Leave Taken before April 1, 2021
• Qualified Health Plan Expenses Allocable to Qualified Family Leave Wages for Leave Taken before April 1, 2021
• Qualified Wages for the Employee Retention Credit
• Qualified Health Plan Expenses for the Employee Retention Credit
• Check the box provided if you are eligible for the employee retention credit in the third or fourth quarter of 2021 solely because your business is a recovery startup business.
• Credit from Form 5884-C, Line 11, for this Quarter
• Qualified Wages Paid March 13 through March 31 2020, for the Employee Retention Credit
• Deferred Amount of the Employee Share of Social Security Tax Included on Form 941 or 941-SS, Line 13b
• Qualified Health Plan Expenses Allocable to Wages Reported on Form 941 or 941-SS, Line 24

Lines 35-40

These lines only apply to quarters beginning after March 31, 2021.

• Qualified Sick Leave Wages for Leave Taken after March 31, 2021 and before October 1, 2021
• Qualified Health Plan Expenses Allocable to Qualified Sick Leave Wages for Leave Taken after March 31, 2021 and before October 1, 2021
• Amounts Under Certain Collectively Bargained Agreements Allocable to Qualified Sick Leave Wages for Leave Taken after March 31, 2021 and before October 1, 2021
• Qualified Family Leave Wages for Leave Taken after March 31, 2021 and before October 1, 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 - Explanation of Corrections

Line 41

Check the box provided if any corrections you entered on a line include both underreported and overreported amounts. Explain both your underreported and overreported amounts on line 43.

Line 42

Check here if any corrections involve reclassified workers. Explain on line 43.

Line 43

Enter a clear and detailed explanation of all corrections you have made. You may use additional and clearly labeled sheets of paper as necessary.

Part 5 - Signature

Signature and Name

Sign the form in the space provided, then enter the date that the form was signed and your full legal name and your title in the spaces provided.

Best Daytime Phone

Enter the phone number that can be used to contact you.

Paid Preparer Use Only

This section should only be filled out by the person paid to prepare this tax form on behalf of the filer.

Self-employed

Check the box if the preparer is self-employed.

Preparer’s Name

Enter the preparer’s full name.

Preparer Tax Identification Number

Enter the preparer’s Preparer Tax Identification Number (PTIN).

Preparer’s Signature

Have the preparer sign in the space provided.

Date

Enter the date that the preparer signed this form.

Firm’s Name

Enter the name of the firm that the preparer works for. If the preparer is self-employed, enter their name instead.

Employer Identification Number

Enter the preparer’s EIN.

Address

Enter the preparer’s street address and room or suite number (if applicable).

Phone Number

Enter the preparer’s primary phone number.

City

Enter the city of the preparer.

State

Enter the State that the preparer resides or operates in.

ZIP Code

Enter the preparer’s ZIP Code.

Frequently Asked Questions (FAQs)

What is Employee Retention Credit?

The Employee Retention Credit (ERC) – sometimes called the Employee Retention Tax Credit or ERTC – is a refundable tax credit for businesses and tax-exempt organizations that had employees and were affected during the COVID-19 pandemic.

How do I know if I am eligible to receive Employee Retention Credit?

There are very specific eligibility requirements for claiming the ERC.

Eligible employers can claim the ERC on an original or amended employment tax return for qualified wages paid between March 13, 2020, and December 31, 2021. However, to be eligible, employers must have either:

• Sustained a full or partial suspension of operations due to an order from an appropriate governmental authority limiting commerce, travel or group meetings because of COVID-19 during 2020 or the first three quarters of 2021, or
• Experienced a significant decline in gross receipts during 2020 or a decline in gross receipts during the first three quarters of 2021, or
• Qualified as a recovery startup business for the third or fourth quarters of 2021.

A self-employed individual who has employees and who otherwise meets the requirements to be an eligible employer may be eligible for the ERC based on qualified wages they paid to employees. Self-employed individuals can't include their own self-employment earnings or wages paid to related individuals when calculating the credit.

Who is not eligible to claim Employee Retention Credit?

You don't qualify for the ERC if you didn't operate a business or tax-exempt organization with employees.

What is a Recovery Startup Business?

A recovery startup business is a business or organization that began carrying on a trade or business after February 15, 2020, and had average annual gross receipts of $1 million or less for the three years preceding the quarter for which they are claiming the ERC.

Your business does not need to specifically relate to pandemic relief or recovery efforts to be eligible.

Do I have to file a Form 941 or 941-X if I have no payroll?

Generally, yes. However, there are a few exceptions, including employers of seasonal employees, household employees, or farm employees. However, other IRS forms may be required in such situations instead.

What are Qualified Wages?

Compensation and wages paid by a company to full-time employees during the relevant quarter are known as “qualified wages”. These wages include any health plan expenses incurred by the employer that are correctly allocated to the wages.

What is the Difference Between Form 941 and 941-X?

Form 941-X (Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund Form) is used to correct any errors made on Form 941, Employer’s Quarterly Tax Return. If you find an error on a previously filed Form 941, you must correct this error using Form 941-X.

When should I file Form 941-X?

As soon as possible once an error is spotted on a previously filed Form 941.

Where should I send Form 941-X?

Print and mail the accomplished Form 941-X to your nearest IRS office.

What happens if I don’t file Form 941-X?

Failing to promptly correct errors in your tax returns can cause a wide variety of problems for you and your business, often involving legal action from the IRS.

Can I correct old forms with Form 941-X?

Yes, simply indicate on the form what year the form you are correcting information for was filed.

Do I need professional assistance in order to file Form 941-X?

It is not required, but may be helpful to hire an accountant to help you get your documents in order and properly fill out the form.

Can I submit Form 941-X online?

No. Form 941-X must be printed physically and mailed to the IRS.

What if I have multiple forms that need corrections?

You must use one Form 941-X per form that requires corrections.

Can I correct multiple 941 forms at once with one Form 941-X?

No. Each Form 941-X only corresponds to the specific form indicated on it, and cannot be used for any other forms besides that one.