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The following significant changes have been made to Form 941 to allow for the reporting of new employment tax credits and other tax relief related to COVID-19.
- The new credit for qualified sick and family leave wages is reported on line 11b and, if applicable, line 13c. The employee share of social security tax on qualified sick and family leave wages is reported on lines 5a(i) and 5a(ii). Qualified sick and family leave wages aren’t subject to the employer's share of social security tax. Qualified health plan expenses allocable to sick and family leave wages are reported on lines 19 and 20. See the instructions for line 11b for information about the new credit for qualified sick and family leave wages.
- The new employee retention credit is reported on line 11c and, if applicable, line 13d. Qualified wages (excluding qualified health plan expenses) for the employee retention credit are reported on line 21. Qualified health plan expenses allocable to the qualified wages for the employee retention credit are reported on line 22. For the second quarter Form 941 only, qualified wages (excluding qualified health plan expenses) for the employee retention credit and qualified health plan expenses allocable to the qualified wages for the period from March 13, 2020, to March 31, 2020, are reported on lines 24 and 25, respectively. See the instructions for line 11c for information about the new employee retention credit.
- Employers can defer the deposit and payment of the employer share of social security tax otherwise due during the calendar quarter. The amount of deferral is reported on line 13b. See the instructions for line 13b for more information.
- Employers that requested an advance of the sick and family leave credit and/or the employee retention credit would have filed a Form 7200, Advance Payment of Employer Credits Due to COVID-19, during the quarter. The amount of all advances received from Forms 7200 filed during the quarter is reported on line 13f. See the instructions for line 13f for more information.
- The credit for qualified sick and family leave wages (reported on lines 11b and 13c) and the employee retention credit (reported on lines 11c and 13d) are figured on Worksheet 1.
Information about the credits on the Q2 941 can be found with the following links.
Tax credits for Family and Sick leave
https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs
Employee Retention:
https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act
Deferral of tax deposits:
https://www.irs.gov/newsroom/deferral-of-employment-tax-deposits-and-payments-through-december-31-2020
Forms listed as additional on the 941:
Form 8974 from Line 11a:
https://www.irs.gov/forms-pubs/about-form-8974
Form 7200from line 13f:
https://www.irs.gov/forms-pubs/about-form-7200
Form 5884-C from line 1f of the worksheet:
https://www.irs.gov/forms-pubs/about-form-5884-c
