Check the box on line 1 if you are correcting underreported amounts or overreported amounts and you would like to use the adjustment process to correct the errors.

If you are correcting both underreported amounts and overreported amounts on this form, you must check this box. If you check this box, any negative amount shown on line 22 will be applied as a credit (tax deposit) to your Form 941 or Form 944 for the period in which you are filing this form. See Example—You want your overreported tax applied as a credit to Form 941 above.

If you have a credit.   You overreported employment taxes (you have a negative amount on line 22) and want the IRS to apply the credit to Form 941 or Form 944 for the period during which you filed Form 941-X. The IRS will apply your credit on the first day of the Form 941 or Form 944 period during which you filed Form 941-X. However, the credit you show on Form 941-X, line 22, may not be fully available on your Form 941 or Form 944 if the IRS corrects it during processing or you owe other taxes, penalties, or interest. The IRS will notify you if your claimed credit changes or if the amount available as a credit on Form 941 or Form 944 was reduced because of unpaid taxes, penalties, or interest.

  

Do not check the box on line 1 if you are correcting overreported amounts and the period of limitations on credit or refund for Form 941 will expire within 90 days of the date you file Form 941-X. Instead, check the box on line 2. See Is There a Deadline for Filing Form 941-X, earlier.

Check the box on line 2 to use the claim process if you are correcting overreported amounts only and you are claiming a refund or abatement for the negative amount (credit) shown on line 22. Do not check this box if you are correcting any underreported amounts on this form.

You must check the box on line 2 if you have a credit and the period of limitations on credit or refund for Form 941 will expire within 90 days of the date you file Form 941-X. See Is There a Deadline for Filing Form 941-X, earlier.

The IRS usually processes claims shortly after they are filed. The IRS will notify you if your claim is denied, accepted as filed, or selected to be examined. See Pub. 556, Examination of Returns, Appeal Rights, and Claims for Refund, for more information.

Unless the IRS corrects Form 941-X during processing or you owe other taxes, penalties, or interest, the IRS will refund the amount shown on line 22, plus any interest that applies.

Check the box on line 3 to certify that you filed or will file Forms W-2 or Forms W-2c with the SSA, as required, showing your employees' correct wage and tax amounts. See the General Instructions for Forms W-2 and W-3 for detailed information about filing requirements. References to Form W-2 on Form 941-X and in these instructions also apply to Forms W-2AS, W-2CM, W-2GU, and W-2VI unless otherwise noted.

You must check the box on line 3 to certify that you filed Forms W-2 or Forms W-2c even if your corrections on Form 941-X do not change amounts shown on those forms. For example, if your only correction to Form 941 involves misstated tax adjustments (see the instructions for line 14, later), check the box on line 3 to certify that you already filed all required Forms W-2 and W-2c with the SSA.

If you overreported federal income tax, social security tax, Medicare tax, or Additional Medicare Tax and checked the box on line 1, check the appropriate box on line 4. You may need to check more than one box. If you obtained written statements from some employees but you could not locate or secure the cooperation of the remaining employees, check all applicable boxes. Provide a summary on line 25 of the amount of the corrections both for the employees who provided written statements and for those who did not.

If you are filing a claim for refund or abatement of overreported federal income tax, social security tax, Medicare tax, or Additional Medicare Tax and checked the box on line 2, check the appropriate box on line 5. You may need to check more than one box. If you obtained written statements or consents from some employees but you could not locate or secure the cooperation of the remaining employees, check all applicable boxes. Provide a summary on line 25 of the amount of the corrections for both the employees who provided statements or consents and for those who did not. You may not file a refund claim to correct federal income tax or Additional Medicare Tax actually withheld from employees.

In certain situations, you may not have repaid or reimbursed your employees or obtained their consents prior to filing a claim, such as in cases where the period of limitations on credit or refund is about to expire. In those situations, file Form 941-X, but do not check a box on line 5. Tell us on line 25 that you have not repaid or reimbursed employees or obtained consents. However, you must certify that you have repaid or reimbursed your employees or obtained consents before the IRS can grant the claim.

On lines 6–11, columns 1 and 2, show amounts for all of your employees, not just for those employees whose amounts you are correcting.

If a correction that you report in column 4 includes both underreported and overreported amounts (see the instructions for lines 21–22, later), give us details for each error on line 25.

Because special circumstances apply for lines 12–17 and 19–20d, read the instructions for each line carefully before entering amounts in the columns.

If you are correcting the wages, tips, and other compensation you reported on Form 941, line 2, enter the total corrected amount for ALL employees in column 1. In column 2, enter the amount you originally reported. In column 3, enter the difference between columns 1 and 2. This line does not apply to Form 941-SS.

If you or the IRS previously corrected the amount reported on Form 941, line 2, enter in column 2 the amount after any previous corrections.

If you are correcting the federal income tax withheld from wages, tips, and other compensation you reported on Form 941, line 3, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2. This line does not apply to Form 941-SS.

Copy the amount in column 3 to column 4. Include any minus sign shown in column 3.

If you are correcting the taxable social security wages you reported on Form 941, line 5a, column 1, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

Multiply the amount in column 3 by .124 (.104 for corrections to a 2011 or 2012 return) and enter that result in column 4.

Be sure to explain the reasons for this correction on line 25.

If you are correcting the taxable social security tips you reported on Form 941, line 5b, column 1, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

Multiply the amount in column 3 by .124 (.104 for corrections to a 2011 or 2012 return) and report that result in column 4.

If you are correcting the taxable Medicare wages and tips you reported on Form 941, line 5c, column 1, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

Multiply the amount in column 3 by .029 (2.9% tax rate) and enter that result in column 4.

If you are correcting the taxable wages and tips subject to Additional Medicare Tax withholding that you reported on Form 941, line 5d, column 1, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

Multiply the amount in column 3 by .009 (0.9% tax rate) and enter that result in column 4.

Enter any corrections, including amounts reported on line 7c (for quarters ending before 2011), amounts reported on line 5e (for quarters ending after 2010 but before 2013), and amounts reported on line 5f (for quarters ending after 2012), to the tax due from a Section 3121(q) Notice and Demand on line 12. The IRS issues a Section 3121(q) Notice and Demand to advise an employer of the amount of tips received by employees who failed to report or underreported tips to the employer. An employer is not liable for the employer share of the social security and Medicare taxes on unreported tips until a Section 3121(q) Notice and Demand for the taxes is made to the employer by the IRS.

Complete lines 13a–13c to correct the payroll tax exemption for the employer's share (6.2%) of social security tax on exempt wages/tips paid to one or more qualified employees from April 1–December 31, 2010.

An employer must be a qualified employer to qualify for the employer's social security tax exemption. A qualified employer is any employer other than Federal, State, and any related government entities. All public institutions of higher education and Indian tribal governments are also qualified employers.

For more information regarding the employer's social security tax exemption visit IRS.gov and enter “HIRE Act” in the search box.

13a. Number of qualified employees first paid exempt wages/tips this quarter.

Enter on line 13a (column 2) the number of qualified employees originally reported on Form 941, line 6a. If you are not correcting Form 941, line 6a, and are making a correction on line 13b, enter the amount from Form 941, line 6a, on line 13a.

A qualified employee is an employee who:

• Began employment with you after February 3, 2010, and before January 1, 2011;

• Certified by signed affidavit (Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit, or similar statement) under penalties of perjury that he or she has not been employed for more than 40 hours during the 60-day period (including 2009) ending on the date the employee begins employment with you;

• Was not employed by you to replace another employee unless the other employee separated from employment voluntarily or for cause (including downsizing); and

• Was not related to you. An employee is related to you if he or she is your child or a descendant of your child, your sibling or stepsibling, your parent or ancestor of your parent, your stepparent, your niece or nephew, your aunt or uncle, or your in-law. An employee is also related to you if he or she is related to anyone who owns more than 50% of your outstanding stock or capital and profits interest or is your dependent or a dependent of anyone who owns more than 50% of your outstanding stock or capital and profits interest. If you are an estate or trust, see section 51(i)(1) and section 152(d)(2) for more details.

Exempt wages/tips are the wages/tips paid to qualified employees for which the employer is exempt from paying the employer's 6.2% share of social security tax.

If you make a correction on line 13a, then you must complete line 13b.

13b. Number of qualified employees paid exempt wages/tips this quarter.

Enter on line 13b (column 1) the total corrected number of qualified employees paid exempt wages/tips to which you applied the social security tax exemption in the quarter you are correcting. Enter on line 13b (column 2) the total number of qualified employees originally reported on Form 941, line 6b. If you are not correcting Form 941, line 6b, and are making a correction on line 13a, enter on line 13b the amount from Form 941, line 6b. See the instructions for line 13a for definitions of qualified employee and exempt wages/tips.

If you make a correction on line 13b, then you must complete line 13a.

Use line 14 to correct any adjustments reported on Form 941, lines 7–9 (lines 7a–7c for quarters ending before 2011). Enter in column 1 the total corrected amount for Form 941, lines 7–9 (lines 7a–7c for quarters ending before 2011).

Enter in column 2 the total originally reported or previously corrected amounts from Form 941, lines 7–9 (lines 7a–7c for quarters ending before 2011). In column 3, enter the difference between columns 1 and 2.

Copy the amount in column 3 to column 4. Include any minus sign shown in column 3.

On line 25, describe what you misreported on Form 941. Tell us if your adjustment is for fractions of cents, third-party sick pay, tips, or group-term life insurance.

Section 3509 provides special rates for the employee share of income tax, social security tax, Medicare tax, and Additional Medicare Tax withholding when workers are reclassified as employees in certain circumstances. The applicable rate depends on whether you filed required information returns. An employer cannot recover any tax paid under this provision from the employees. The full employer share of social security tax and Medicare tax is due for all reclassifications.

On lines 15–17 enter only corrections to wages resulting from reclassifying certain workers as employees when section 3509 rates are used to calculate the taxes.

If the employer issued the required information returns, use the section 3509 rates as follows.

If the employer did not issue the required information returns, use the section 3509 rates as follows.

Unlike other lines on Form 941-X, enter in column 1 only the corrected wages for workers being reclassified, not the amount paid to ALL employees. Enter previously reported wages to reclassified employees (if any) in column 2. To get the amount for column 4, use the applicable section 3509 rates. The tax correction in column 4 will be a positive number if you increased the amount of wages you previously reported. See the instructions for line 24 for more information.

Combine the amounts from column 4 on lines 7–17.

If you are correcting the advance EIC payments made to your employees that you reported on Form 941, line 9 (only for quarters ending before January 1, 2011), enter the total corrected amount for ALL employees in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2. This line does not apply to Form 941-SS.

If you are correcting the total COBRA premium assistance payments reported on Form 941, line 12a, report on this line 65% of the COBRA premiums for assistance eligible individuals. Report the premium assistance credit on this line only after the assistance eligible individual's 35% share of the premium has been paid. For COBRA coverage provided under a self-insured plan, COBRA premium assistance is treated as having been made for each assistance eligible individual who pays 35% of the COBRA premium.

Do not include the assistance eligible individual's 35% of the premium in the amount entered on this line. For more information on the COBRA premium subsidy, visit IRS.gov and enter “COBRA” in the search box.

Copy the amount in column 3 to column 4. However, to properly show the correction as a credit or balance due item, enter a positive number in column 3 as a negative number in column 4 or a negative number in column 3 as a positive number in column 4. This is the same procedure as the advance EIC on line 19.

Complete this line only if you are correcting Form 941, line 12b. Enter on line 20b, column 1, the corrected number of assistance eligible individuals provided COBRA premium assistance. Count each assistance eligible individual who paid a reduced COBRA premium in the quarter as one individual, whether or not the reduced premium was for insurance that covered more than one assistance eligible individual. For example, if the reduced COBRA premium was for coverage for a former employee, spouse, and two children, you would include one individual in the number entered on line 20b for the premium assistance entered on line 20a. Further, each individual is reported only once per quarter. For example, an assistance eligible individual who made monthly premium payments during the quarter would only be reported as one individual on line 20b for that quarter.

Enter on line 20b, column 2, the number of assistance eligible individuals provided COBRA premium assistance originally reported on Form 941, line 12b.

Complete this line when correcting Form 941 for the second quarter of 2010 only. Enter on line 20c, column 1, the corrected number of qualified employees paid exempt wages/tips from March 19, 2010, through March 31, 2010. Include only qualified employees for whom you are claiming the exemption. Enter on line 20c, column 2, the number of qualified employees originally reported on line 12c of the second quarter 2010 Form 941. If you are not correcting line 12c of the second quarter 2010 Form 941 but you are making a correction on line 20d, enter the amount from line 12c of the second quarter 2010 Form 941 on line 20c. For the definition of qualified employee, see the instructions for line 13a.

Complete this line when correcting Form 941 for the second quarter of 2010 only. Enter on line 20d the amount of exempt wages/tips paid to qualified employees from March 19, 2010, through March 31, 2010. For the definition of exempt wages/tips, see the instructions for line 13a. Enter the corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2. If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3. Multiply the amount in column 3 by .062 and enter the result in column 4. However, to properly show the correction as a credit or balance due item, enter a positive number in column 3 as a negative number in column 4 or a negative number in column 3 as a positive number in column 4.

Combine lines 18–20d of column 4 and enter the result on line 21. Copy the amount from line 21 on page 2 to line 22 on page 3.

Check the box on line 23 if any corrections you entered on lines 6–20d, column 3, reflect both underreported and overreported amounts.

Check the box on line 24 if you reclassified any workers to be independent contractors or nonemployees. Also check this box if the IRS (or you) determined that workers you treated as independent contractors or nonemployees should be classified as employees. On line 25, give us a detailed reason why any worker was reclassified and, if you used section 3509 rates on lines 15–17, for any worker reclassified as an employee, explain why section 3509 rates apply and what rates you used.

Return not filed because you did not treat any workers as employees.   If you did not previously file Form 941 because you mistakenly treated all workers as independent contractors or as nonemployees, file a Form 941 for each delinquent quarter.

  On each Form 941 for which you are entitled to use section 3509 rates, complete the following steps.

• Write “Misclassified Employees” in dark, bold letters across the top margin of page 1.

• Enter a zero on line 10 (“Total taxes after adjustments”).

• Complete the signature area.

• Attach a completed Form 941-X (see instructions next).

  On each Form 941-X complete the following steps.

• Complete the top of Form 941-X, including the date you discovered the error.

• Enter the wage amounts on lines 15–17, column 1.

• Enter zeros on lines 15–17, column 2.

• Complete columns 3 and 4 as instructed in Part 3.

• Provide a detailed statement on line 25.

• Complete the signature area.

  

If you cannot use section 3509 rates (for example, because the workers you treated as nonemployees were certain statutory employees), file a Form 941 for each delinquent quarter. Write “ Misclassified Employees ” in dark, bold letters across the top margin of page 1 of each Form 941. Complete Form 941 using the Instructions for Form 941. Attach a Form 941-X to each Form 941. Complete the top of Form 941-X, including the date you discovered the error, and provide a detailed explanation on line 25.

Treasury regulations require you to explain in detail the grounds and facts relied upon to support each correction. On line 25, describe in detail each correction you entered on lines 6–20d, column 3. If you need more space, attach additional sheets, but be sure to write your name, EIN, Form 941-X, quarter, and calendar year on the top of each sheet.

You must describe the events that caused the underreported or overreported amounts. Explanations such as “social security and Medicare wages were overstated” or “administrative/payroll errors were discovered” are insufficient and may delay processing your Form 941-X because the IRS may need to ask for a more complete explanation.

Provide the following information in your explanation for each correction.

You may report the information in paragraph form. The following paragraph is an example.

“The $1,000 difference shown in column 3 on lines 6, 8, and 10 was discovered on May 16, 2013, during an internal payroll audit. We discovered that we included $1,000 of wages for one of our employees twice. This correction removes the reported wages that were never paid.”

For corrections shown on lines 15–17, column 3, explain why the correction was necessary and attach any notice you received from the IRS.

A paid preparer must sign Form 941-X and provide the information in the Paid Preparer Use Only section of Part 5 if the preparer was paid to prepare Form 941-X and is not an employee of the filing entity. Paid preparers must sign paper returns with a manual signature. The preparer must give you a copy of the return in addition to the copy to be filed with the IRS.

If you are a paid preparer, enter your Preparer Tax Identification Number (PTIN) in the space provided. Include your complete address. If you work for a firm, enter the firm's name and the EIN of the firm. You can apply for a PTIN online or by filing Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal. For more information about applying for a PTIN online, visit the IRS website at www.irs.gov/ptin. You cannot use your PTIN in place of the EIN of the tax preparation firm.

Generally, you are not required to complete this section if you are filing the return as a reporting agent and have a valid Form 8655, Reporting Agent Authorization, on file with the IRS. However, a reporting agent must complete this section if the reporting agent offered legal advice, for example, advising the client on determining whether its workers are employees or independent contractors for federal tax purposes.