General Instructions: Understanding Form 941-X

What Is the Purpose of Form 941-X?

For tax periods beginning after December 31, 2013, Forms 941 and 941-SS will no longer be used to claim the credit for COBRA premium assistance payments. Instead use Form 941-X. For more information, see the instructions for lines 19a and 19b.

Use Form 941-X to correct errors on a Form 941 that you previously filed. Use Form 941-X to correct:

  • Wages, tips, and other compensation;

  • Income tax withheld from wages, tips, and other compensation;

  • Taxable social security wages;

  • Taxable social security tips;

  • Taxable Medicare wages and tips;

  • Taxable wages and tips subject to Additional Medicare Tax withholding; and

  • Credits for COBRA premium assistance payments.

Use Form 843, Claim for Refund and Request for Abatement, to request a refund or abatement of assessed interest or penalties. Do not request abatement of assessed interest or penalties on Form 941 or Form 941-X.

References to Form 941 on Form 941-X and in these instructions also apply to Form 941-SS, Employer's QUARTERLY Federal Tax Return—American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands, unless otherwise noted. We use the terms “correct” and “corrections” on Form 941-X and in these instructions to include interest-free adjustments under sections 6205 and 6413 and claims for refund and abatement under sections 6402, 6414, and 6404. See Rev. Rul. 2009-39 for examples of how the interest-free adjustment and claim for refund rules apply in 10 different situations. You can find Rev. Rul. 2009-39, 2009-52, I.R.B. 951 at www.irs.gov/irb/2009-52_IRB/ar14.html.

When you discover an error on a previously filed Form 941, you must:

  • Correct that error using Form 941-X,

  • File a separate Form 941-X for each Form 941 that you are correcting, and

  • File Form 941-X separately. Do not file Form 941-X with  
    Form 941.

If you did not file a Form 941 for one or more quarters, do not use Form 941-X. Instead, file Form 941 for each of those quarters. See also When Should You File Form 941-X? below. However, if you did not file Forms 941 because you improperly treated workers as independent contractors or nonemployees and are now reclassifying them as employees, see the instructions for line 22, later.

Report the correction of underreported and overreported amounts for the same tax period on a single Form 941-X, unless you are requesting a refund or abatement. If you are requesting a refund or abatement and are correcting both underreported and overreported amounts, file one Form 941-X correcting the underreported amounts only and a second Form 941-X correcting the overreported amounts.

You will use the adjustment process if you underreported employment taxes and are making a payment, or if you overreported employment taxes and will be applying the credit to Form 941 for the period during which you file Form 941-X. However, see the Caution under Is There a Deadline for Filing Form 941-X, later, if you are correcting overreported amounts during the last 90 days of a period of limitations. You will use the claim process if you overreported employment taxes and are requesting a refund or abatement of the overreported amount. Follow the chart on the back of Form 941-X for help in choosing whether to use the adjustment process or the claim process. Be sure to give us a detailed explanation on line 23 for each correction that you show on Form 941-X.

Continue to report current quarter fractions of cents, third-party sick pay, tips, and group-term life insurance on Form 941, lines 7–9.

You have additional requirements to complete when filing Form 941-X, such as certifying that you filed (or will file) all applicable Forms W-2, Wage and Tax Statements, and Forms W-2c, Corrected Wage and Tax Statements, with the Social Security Administration (SSA). For corrections of overreported federal income tax, social security tax, Medicare tax, or Additional Medicare Tax, you must make any certifications that apply to your situation.

Do not use Form 941-X to correct Form CT-1, 943, 944, 944-SS, or 945. Instead, use the “X” form that corresponds to those forms (Form CT-1 X, 943-X, 944-X, or 945-X).

Where Can You Get Help?

For help filing Form 941-X or for questions about federal employment taxes and tax corrections, you can:

  • Call the IRS Business and Specialty Tax Line toll-free at 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability) Monday–Friday from 7:00 a.m. to 7:00 p.m. local time (Alaska and Hawaii follow Pacific time),

  • Visit the IRS website at www.irs.gov/businesses and click on the Employment Taxes link under Businesses Topics, or

  • See Pub. 15 (Circular E), Employer's Tax Guide, for correcting Form 941, or Pub. 80 (Circular SS), Federal Tax Guide for Employers in the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, for correcting Form 941-SS.

See also How Can You Order Forms, Instructions, and Publications from the IRS, later.

When Should You File Form 941-X?

File Form 941-X when you discover an error on a previously filed Form 941.

However, if your only errors on Form 941 relate to the number of employees who received wages or to federal tax liabilities reported on Form 941, Part 2, or on Schedule B (Form 941), Report of Tax Liability for Semiweekly Schedule Depositors, do not file Form 941-X. For more information about correcting federal tax liabilities reported on Form 941, Part 2, or on Schedule B (Form 941), see the Instructions for Schedule B (Form 941).

Due dates.   The due date for filing Form 941-X depends on when you discover an error and if you underreported or overreported tax. If you underreported tax, see Underreported tax next. For overreported amounts, you may choose to either make an interest-free adjustment or file a claim for refund or abatement. If you are correcting overreported amounts, see Overreported tax—adjustment process or Overreported tax—claim process, later.

  If any due date falls on a Saturday, Sunday, or legal holiday, you may file Form 941-X on the next business day. If we receive Form 941-X after the due date, we will treat Form 941-X as filed on time if the envelope containing Form 941-X is properly addressed, contains sufficient postage, and is postmarked by the U.S. Postal Service on or before the due date, or sent by an IRS-designated private delivery service on or before the due date. If you do not follow these guidelines, we will consider Form 941-X filed when it is actually received. See Pub. 15 (Circular E) or Pub. 80 (Circular SS) for more information on legal holidays and IRS-designated private delivery services.

Underreported tax.   If you are correcting underreported tax, you must file Form 941-X by the due date of the return for the return period in which you discovered the error and pay the amount you owe by the time you file. Doing so will generally ensure that your correction is interest free and not subject to failure-to-pay or failure-to-deposit penalties. See What About Penalties and Interest, later. For details on how to make a payment, see the instructions for line 20, later.

  If Form 941-X is filed late (after the due date of the return for the return period in which you discovered the error), you must attach an amended Schedule B (Form 941) to Form 941-X. Otherwise, the IRS may assess an “averaged” failure-to-deposit penalty. The total tax reported on the “Total liability for the quarter” line of Schedule B (Form 941) must match the corrected tax (Form 941, line 10, combined with any correction entered on Form 941-X, line 18) for the quarter, less any previous abatements and interest-free tax assessments.
If you discover an error in   Form 941-X is due  
         
1. January, February, March   April 30  
2. April, May, June   July 31  
3. July, August, September   October 31  
4. October, November, December   January 31  
         
The dates shown in the table above apply only to corrections of underreported amounts. If any due date falls on a Saturday, Sunday, or legal holiday, you may file Form 941-X on the next business day.

Example—You owe tax.

On February 11, 2014, you discovered that you underreported $10,000 of social security and Medicare wages on your 2013 fourth quarter Form 941. File Form 941-X and pay the amount you owe by April 30, 2014, because you discovered the error in the first quarter of 2014, and April 30, 2014, is the due date for that quarter. If you file Form 941-X before April 30, pay the amount you owe by the time you file.

Overreported tax—adjustment process.   If you overreported tax on Form 941 and choose to apply the credit to Form 941 or Form 944, file an adjusted return on Form 941-X soon after you discovered the error but more than 90 days before the period of limitations on the credit or refund for Form 941 expires. See Is There a Deadline for Filing Form 941-X? below.

If you reduced your deposits during the quarter by the amount of the COBRA premium assistance credit that will be reflected on your Form 941-X, do not use the adjustment process to claim the COBRA premium assistance credit. Use the claim process. See the instructions for lines 19a and 19b, later.

Overreported tax—claim process.   If you overreported tax on Form 941, you may choose to file a claim for refund or abatement on Form 941-X any time before the period of limitations on credit or refund expires on Form 941. If you also need to correct any underreported amounts, you must file another Form 941-X reporting only corrections to the underreported amounts. See Is There a Deadline for Filing Form 941-X? next.

You may not file a refund claim to correct federal income tax or Additional Medicare Tax actually withheld from employees.

Is There a Deadline for Filing Form 941-X?

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. You may correct underreported taxes on a previously filed Form 941 if you file Form 941-X within 3 years of the date the Form 941 was filed. We call each of these time frames a “period of limitations.” 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.

Example.

You filed your 2012 fourth quarter Form 941 on January 27, 2013, and payments were timely made. The IRS treats the return as if it were filed on April 15, 2013. On January 22, 2014, you discovered that you overreported social security and Medicare wages on that form by $350. To correct the error you must file Form 941-X by April 15, 2016, which is the end of the period of limitations for Form 941, and use the claim process.

If you file Form 941-X to correct overreported amounts in the last 90 days of a period of limitations (after January 15, 2016, in the example above), you must use the claim process. You cannot use the adjustment process. If you are also correcting underreported amounts, you must file another Form 941-X to correct the underreported amounts using the adjustment process and pay any tax due.

Where Should You File Form 941-X?

Send your completed Form 941-X to the address shown next.

IF you are in THEN use this address
Special filing addresses for exempt organizations; federal, state, and local governmental entities; and Indian tribal governmental entities; regardless of location Department of the Treasury 
Internal Revenue Service  
Ogden, UT 84201-0005
Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia, Wisconsin Department of the Treasury 
Internal Revenue Service  
Cincinnati, OH 45999-0005
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, Wyoming Department of the Treasury  
Internal Revenue Service  
Ogden, UT 84201-0005
No legal residence or principal place of business in any state Internal Revenue Service  
P.O. Box 409101  
Ogden, UT 84409

How Should You Complete Form 941-X?

Use a Separate Form 941-X for Each Quarter You Are Correcting

Use a separate Form 941-X for each Form 941 that you are correcting. For example, if you found errors on your Forms 941 for the third and fourth quarters of 2011, file one Form 941-X to correct the 2011 third quarter Form 941. File a second Form 941-X to correct the 2011 fourth quarter Form 941.

EIN, Name, and Address

Enter your EIN, name, and address in the spaces provided. Also enter your name and EIN on the top of pages 2 and 3, and on any attachments. If your address has changed since you filed your Form 941, enter the corrected information and the IRS will update your address of record.

Return You Are Correcting

In the box at the top of page 1, check the type of return (Form 941 or Form 941-SS) you are correcting. Check the appropriate box for the one quarter you are correcting. Enter the calendar year of the Form 941 you are correcting. Enter the quarter and calendar year on pages 2 and 3. Be sure to write your name, EIN, “Form 941-X,” the quarter you are correcting (for example, “Quarter 2”), and the calendar year of the quarter you are correcting on the top of any attachments.

Enter the Date You Discovered Errors

You must enter the date you discovered errors. You discover an error when you have enough information to be able to correct it. If you are reporting several errors that you discovered at different times, enter the earliest date you discovered them here. Report any subsequent dates and related errors on line 23.

Must You Make an Entry on Each Line?

You must provide all of the information requested at the top of page 1. You must check one box (but not both) in Part 1. In Part 2, you must check the box on line 3 and any applicable boxes on lines 4 and 5. In Part 3, if any line does not apply, leave it blank. Complete Parts 4 and 5 as instructed.

How Should You Report Negative Amounts?

Form 941-X uses negative numbers to show reductions in tax (credits) and positive numbers to show additional tax (amounts you owe).

When reporting a negative amount in columns 3 and 4, use a minus sign instead of parentheses. For example, enter “-10.59” instead of “(10.59).” However, if you are completing the return on your computer and your software only allows you to use parentheses to report negative amounts, you may use them.

How Should You Make Entries on Form 941-X?

You can help the IRS process Form 941-X timely and accurately if you follow these guidelines.

  • Type or print your entries.

  • Use Courier font (if possible) for all typed or computer-generated entries.

  • Omit dollar signs. You may use commas and decimal points, if desired. Enter dollar amounts to the left of any preprinted decimal point and cents to the right of it.

  • Always show an amount for cents. Do not round entries to whole dollars.

  • Complete all three pages and sign Form 941-X on page 3.

  • Staple multiple sheets in the upper-left corner.

What About Penalties and Interest?

Generally, your correction of an underreported amount will not be subject to a failure-to-pay penalty, failure-to-deposit penalty, or interest if you:

  • File on time (by the due date of the quarter in which you discover the error),

  • Pay the amount shown on line 20 by the time you file  
    Form 941-X,

  • Enter the date you discovered the error, and

  • Explain in detail the grounds and facts relied on to support the correction.

No correction will be eligible for interest-free treatment if any of the following apply.

  • The amounts underreported relate to an issue that was raised in an examination of a prior period.

  • You knowingly underreported your employment tax liability.

  • You received a notice and demand for payment.

  • You received a Notice of Determination of Worker Classification.

If you receive a notice about a penalty after you file this return, reply to the notice with an explanation and we will determine if you meet the reasonable-cause criteria. Do not attach an explanation when you file your return.

Overview of the Process

The process to correct a previously filed Form 941 or file a claim is outlined below.

If you underreported the tax.

If you underreported the tax on a previously filed Form 941, check the box on line 1 and pay any additional amount you owe by the time you file Form 941-X. For details on how to make a payment, see the instructions for line 20, later.

Example—You underreported employment taxes.

On June 20, 2014, you discover an error that results in additional tax on your 2013 fourth quarter Form 941. File Form 941-X by July 31, 2014, and pay the amount you owe by the time you file. See When Should You File Form 941-X, earlier. Do not attach Form 941-X to your 2014 second quarter Form 941.

If you overreported the tax.

If you overreported the tax on a previously filed Form 941, you may choose one of the following options.

  • Use the adjustment process. Check the box on line 1 to apply any credit (negative amount) from line 20 to Form 941 for the quarter during which you file Form 941-X.

  • Use the claim process. Check the box on line 2 to file a claim on Form 941-X requesting a refund or abatement of the amount shown on line 20.

To ensure that the IRS has enough time to process a credit for an overreporting adjustment in the quarter during which you file Form 941-X, you are encouraged to file Form 941-X correcting the overreported amount in the first two months of a quarter. For example, if you discover an overreported amount in March, June, September, or December, you may want to file Form 941-X in the first two months of the next quarter. However, there must be 90 days remaining on the period of limitations when you file Form 941-X. See the Caution under Is There a Deadline for Filing Form 941-X, earlier. This should ensure that the IRS will have enough time to process Form 941-X so the credit will be posted before you file Form 941, thus avoiding an erroneous balance due notice from the IRS. See the example below.

Example—You want your overreported tax applied as a credit to Form 941.

On June 20, 2014, you discover you overreported your tax on your 2013 fourth quarter Form 941 and want to choose the adjustment process. To allow the IRS enough time to process the credit, you file Form 941-X on July 1, 2014, and take the credit on your third quarter 2014 Form 941.

If you currently file Form 944 and you are making a correction to a previously filed Form 941 that will be claimed as a credit on Form 944, file Form 941-X before December in any year before the expiration of the period of limitations for the previously filed Form 941. In the year that the period of limitations for the previously filed Form 941 expires, file Form 941-X at least 90 days before the expiration date.


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