Instructions for Form 941-X - Introductory Material


Future Developments

For the latest information about developments related to Form 941-X and its instructions, such as legislation enacted after they were published, go to www.irs.gov/form941x.

What's New

Employee consents to support a claim for refund.   Notice 2015-15 provides guidance to employers on the requirements for employee consents used by an employer to support a claim for refund of overcollected social security tax and Medicare tax. The notice and proposed revenue procedure clarifies the basic requirements for a request for a consent and for the employee consent itself, and permits a consent to be requested, furnished, and retained in an electronic format as an alternative to a paper format. The notice also requests comments and contains guidance concerning what constitutes “reasonable efforts” if a consent is not secured to permit the employer to claim a refund of the employer share of overcollected social security tax and Medicare tax. For more information, see Notice 2015-15, 2015-9 I.R.B. 687, available at www.irs.gov/irb/2015-9_IRB/ar07.html.

Retroactive increase in excludible transit benefits.   The Tax Increase Prevention Act of 2014 increased the monthly transit benefit exclusion from $130 per participating employee to $250 per participating employee for the period of January 1, 2014, through December 31, 2014. Employers were provided instructions on how to correct the social security and Medicare taxes on the excess transit benefits in Notice 2015-2, 2015-4 I.R.B. 334, available at www.irs.gov/irb/2015-4_IRB/ar06.html.

Reminders

Claiming the COBRA premium assistance credit.   The COBRA premium assistance credit was available to an employer for premiums paid on behalf of employees who were involuntarily terminated from employment between September 1, 2008, and May 31, 2010. The COBRA premium assistance credit is not available for individuals who were involuntarily terminated after May 31, 2010. Therefore, only in rare circumstances, such as instances where COBRA eligibility was delayed as a result of employer provided health insurance coverage following termination, will the credit be available. If you are eligible to claim the credit, use Form 941-X, lines 19a and 19b. Form 941-X should be filed after filing your Form 941 or 941-SS. Filing a Form 941-X before filing a Form 941 or 941-SS for the quarter may result in errors or delays in processing your Form 941-X. For more information, visit IRS.gov and enter “COBRA” in the search box.

If you are entitled to claim the COBRA premium assistance credit, but are not otherwise required to file Form 941 or 941-SS, file a Form 941 or 941-SS with -0- entered on line 12 before filing your Form 941-X to claim the credit.

Period of limitations to make certain corrections expired.   Generally, you may correct overreported taxes on a previously filed Form 941 if you file Form 941-X within 3 years of the date Form 941 was filed or 2 years from the date you paid the tax reported on Form 941, whichever is later. For purposes of the period of limitations, Forms 941 for a calendar year are considered filed on April 15 of the succeeding year if filed before that date.

  The period of limitations to correct the qualified employer's tax exemption on wages/tips paid to qualified employees (for quarters ending after March 31, 2010, and before January 1, 2011); the qualified employer's tax credit on wages/tips paid to qualified employees March 19–31, 2010; and advance earned income credit (EIC) payments expired on April 15, 2014, for most employers. The lines formerly used for these corrections were removed from Form 941-X. If the period of limitations for any of these corrections is still open, you will need to file the April 2013 revision of Form 941-X. The April 2013 revision of Form 941-X is available on IRS.gov.

Correcting Additional Medicare Tax withholding.   Beginning with the first quarter of 2013, wages and tips subject to Additional Medicare Tax withholding are reported on Form 941, line 5d. Any errors discovered on a previously filed Form 941 are corrected on Form 941-X, line 11. For more information about Additional Medicare Tax withholding, see the Instructions for Form 941 and go to IRS.gov and enter “Additional Medicare Tax” in the search box. See the instructions for line 11, later, for more information on the types of errors that can be corrected and how the correction is reported on Form 941-X.

Correcting the COBRA premium assistance credit.   For tax periods ending before January 1, 2014, employers who made COBRA premium assistance payments for assistance eligible individuals were allowed a credit on their Form 941 or 941-SS. Any errors discovered on a previously filed Form 941 or 941-SS for this credit are corrected on Form 941-X, lines 19a and 19b. Effective for tax periods beginning after December 31, 2013, Form 941-X, is used to both report the total COBRA premium assistance credit an employer is entitled to claim and correct any previously reported credit. For more information, see the instructions for lines 19a and 19b, later.

Social security tax rate for 2011 and 2012.   In 2011 and 2012, the employee social security tax rate was 4.2% and the employer social security tax rate was 6.2% (10.4% total). Be sure to use the correct rate when reporting corrections on lines 8 and 9.

Aggregate Form 941.   Agents must complete Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers, when correcting an aggregate Form 941. Schedule R (Form 941) is completed only for those clients who have corrections reported on Form 941-X. Schedule R (Form 941) is filed as an attachment to Form 941-X. Aggregate Forms 941 are filed by agents approved by the IRS under section 3504. To request approval to act as an agent for an employer, the agent files Form 2678, Employer/Payer Appointment of Agent, with the IRS.


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