IRS Revised Form 941: What’s New for Q2-Q4 2020 That You Need to Know

On April 30, 2020, the Internal Revenue Service (IRS) released a draft of Form 941, Employer's QUARTERLY Federal Tax Return, and accompanying instructions. The revised Form 941 includes various additional entries to report and reconcile payroll tax credits and deferral opportunities available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and Families First Coronavirus Response Act (FFCRA). The form is expected to be available for use by employers beginning with the second quarter of 2020.

The form 941 is an essential form for all employers that pay employees and withhold federal and FICA (social security and Medicare) taxation. In recent years several changes to the 941 form have made it difficult to understand. The importance of reconciliation and completion of not only the Form 941 but Schedule B is becoming increasingly important for employers to avoid costly disputes with the IRS resulting in penalties and interest.

• IRS Issues Form 941 Clarification on Employee Retention Credit
  
• Form 941 was reissued with a clarification on using the employee retention credit
• The credit is available as part of the CARES Act
• IRS to Expand Form 941 to 3 Pages for FFCRA, CARES Act Reporting
• About 20 additional data-entry fields are to be added to the form
• Schedule R of Form 941 also is to be revised