Instructions for Form 941-X (07/2020)

Adjusted Employer's QUARTERLY Federal Tax Return or Claim for Refund

Section references are to the Internal Revenue Code unless otherwise noted.

Revised: 07/2020


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 IRS.gov/Form941X.

.This is an Image: caution.gifThe July 2020 revision of Form 941-X is used to correct the second quarter 2020 Forms 941 and 941-SS, as well as Forms 941 and 941-SS filed for earlier quarters. The IRS will revise Forms 941 and 941-SS for the third quarter of 2020; therefore, there will be an October 2020 revision of Form 941-X that will be used to make corrections to the third quarter 2020 Forms 941 and 941-SS..

What's New

Changes to Form 941-X for coronavirus (COVID‐19) related employment tax credits and other tax relief.

Form 941‐X has been significantly revised to allow for correcting COVID‐19 related employment tax credits and other tax relief related to COVID‐19 reported on Form 941. You may now use Form 941‐X to report corrections to the following items reported on Form 941.

  • Corrections to amounts reported on Form 941, lines 5a(i), 5a(ii), 11b, 13c, 19, and 20, for the credit for qualified sick and family leave wages are reported on Form 941‐X, lines 9, 10, 17, 25, 28, and 29, respectively. For more information about the credit for qualified sick and family leave wages, including the dates for which the credit may be claimed, go to IRS.gov/PLC.

  • Corrections to amounts reported on Form 941, lines 11c, 13d, 21, and 22, for the employee retention credit are reported on Form 941‐X, lines 18, 26, 30, and 31, respectively. Corrections to Form 941, lines 24 and 25, are reported on Form 941‐X, lines 33 and 34, respectively (these lines are only used for the second quarter of 2020). For more information about the employee retention credit, including the dates for which the credit may be claimed, go to IRS.gov/ERC.

  • Corrections to the deferred amount of the employer share of social security tax reported on Form 941, line 13b, are reported on Form 941-X, line 24. For more information about the deferral of employment tax deposits, including the dates that deposits may be deferred and when they must be paid, go to IRS.gov/ETD.

Note.

If a line on Form 941‐X doesn't apply to you, leave it blank. If you're correcting a quarter that began before April 1, 2020, you must leave blank the new lines 9, 10, 17, 18, 24, 25, 26, 28, 29, 30, 31, 32, 33, and 34.

If you claimed the credit for qualified sick and family leave wages and/or the employee retention credit on your original Form 941 for the quarter, and you make any corrections on Form 941‐X for the quarter to amounts used to figure these credits, you will need to refigure the amount of these credits using Worksheet 1, later. You will also use this worksheet to figure these credits if you’re claiming them for the first time on Form 941-X.

COBRA premium assistance credit.

The COBRA premium assistance credit lines have been removed from Form 941‐X. 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 isn’t available for individuals who were involuntarily terminated after May 31, 2010. The IRS previously kept these lines available on Form 941-X because, in rare circumstances, such as instances where COBRA eligibility was delayed as a result of employer-provided health insurance coverage following termination, the credit was still available. It is extremely unlikely that any employers would still be providing health insurance coverage for an employee terminated between September 1, 2008, and May 31, 2010. Therefore, the IRS is no longer accepting claims for the COBRA premium assistance credit. However, if you need to correct a previously claimed COBRA premium assistance credit for a quarter in which the statute of limitations on corrections hasn't expired, you can file the April 2017 revision of Form 941-X and make the corrections on lines 20a and 20b.

Reminders

Employee consents to support a claim for refund.

Rev. Proc. 2017-28, 2017-14 I.R.B. 1061, available at IRS.gov/irb/2017-14_IRB#RP-2017-28, 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 revenue procedure clarifies the basic requirements for both a request for employee consent and for the employee consent, and permits a consent to be requested, furnished, and retained in an electronic format as an alternative to a paper format. The revenue procedure also contains guidance concerning when an employer may claim a refund of only the employer share of overcollected social security tax and Medicare tax. The revenue procedure requires that any request for consent include an Additional Medicare Tax notice indicating that any claim on the employee’s behalf won’t include a claim for overpaid Additional Medicare Tax.

Qualified small business payroll tax credit for increasing research activities.

For tax years beginning after 2015, a qualified small business may elect to claim up to $250,000 of its credit for increasing research activities as a payroll tax credit against the employer share of social security tax. The payroll tax credit election must be made on or before the due date of the originally filed income tax return (including extensions). Any election to take the payroll tax credit may be revoked only with the consent of the IRS. The portion of the credit used against the employer share of social security tax is allowed in the first calendar quarter beginning after the date that the qualified small business filed its income tax return. The election and determination of the credit amount that will be used against the employer share of social security tax is made on Form 6765, Credit for Increasing Research Activities. The amount from Form 6765, line 44, must then be reported on Form 8974, Qualified Small Business Payroll Tax Credit for Increasing Research Activities. Form 8974 is used to determine the amount of the credit that can be used in the current quarter. The amount from Form 8974, line 12, is reported on Form 941 or 941-SS, line 11a (line 11 for quarters beginning before April 1, 2020). Any corrections to Form 941 or 941-SS, line 11a (line 11 for quarters beginning before April 1, 2020), are reported on Form 941-X, line 16. If you make a correction on Form 941-X, line 16, you must attach a corrected Form 8974. For more information about the payroll tax credit, go to IRS.gov/ResearchPayrollTC.

Correcting federal income tax withheld.

Generally, you may correct federal income tax withholding errors only if you discovered the errors in the same calendar year you paid the wages. In addition, for an overcollection, you may correct federal income tax withholding only if you also repaid or reimbursed the employees in the same year.

For prior years, you may only correct administrative errors to federal income tax withholding (that is, errors in which the amount reported on Form 941, line 3, isn't the amount you actually withheld from an employee’s wages) and errors for which section 3509 rates apply. See section 13 of Pub. 15, Employer’s Tax Guide, for more information about corrections during the calendar year and about administrative errors. See section 2 of Pub. 15 for more information about section 3509. If section 3509 rates apply, see the instructions for lines 19–22, later.

.This is an Image: caution.gifOnly transposition or math errors involving the inaccurate reporting of the amount withheld are "administrative errors." .

You can’t file a Form 941-X to correct federal income tax withholding for prior years for nonadministrative errors. In other words, you can’t correct federal income tax actually withheld from an employee in a prior year if you discover that you didn’t withhold the right amount. For example, you can’t correct federal income tax withheld in a prior year because you used the wrong income tax withholding table or you didn’t treat a payment correctly as taxable or nontaxable. Similarly, if you paid federal income tax in a prior year on behalf of your employee, rather than deducting it from the employee’s pay (which resulted in additional wages subject to tax), and in a subsequent year you determine that you incorrectly calculated the amount of tax, you can’t correct the federal income tax withholding. However, you must still correct the amount of wages you reported on Form 941 and Form W-2, Wage and Tax Statement, for a prior year by filing Form 941-X and Form W-2c, Corrected Wage and Tax Statement. You will report the correct wages on Form 941-X, line 6, column 1.

.This is an Image: taxtip.gifThe amount actually withheld is reflected on payroll information or on Form W-2 which can be used by the employee to claim a credit for withholding for individual income tax return purposes..

Correcting Additional Medicare Tax withholding and wages and tips subject to Additional Medicare Tax withholding.

Wages and tips subject to Additional Medicare Tax withholding are reported on Form 941, line 5d. Certain errors discovered on a previously filed Form 941 are corrected on Form 941-X, line 13. However, you can’t file a Form 941-X to correct the wrong amount of Additional Medicare Tax actually withheld from an employee in a prior year, including any amount you paid on behalf of your employee rather than deducting it from the employee’s pay (which resulted in additional wages subject to tax). See the instructions for line 13, later, for more information on the types of errors that can be corrected and how the correction is reported on Form 941-X. For more information about Additional Medicare Tax withholding, see the Instructions for Form 941 or go to IRS.gov/ADMT.

You many need to attach Schedule R (Form 941) to your Form 941-X.

If you were required to file Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers, when you filed Form 941, you must complete Schedule R (Form 941) when correcting an aggregate Form 941. Schedule R (Form 941) is completed only for those clients and customers who have corrections reported on Form 941-X. Schedule R (Form 941) is filed as an attachment to Form 941-X.

Approved section 3504 agents and CPEOs must complete and file Schedule R (Form 941) when filing an aggregate Form 941. 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 with the IRS. Aggregate Forms 941 are also filed by CPEOs approved by the IRS under section 7705. To become a CPEO, the organization must apply through the IRS Online Registration System at IRS.gov/CPEO. CPEOs file Form 8973, Certified Professional Employer Organization/Customer Reporting Agreement, to notify the IRS that they started or ended a service contract with a customer.

Other third-party payers that file aggregate Forms 941, such as non-certified PEOs, must complete and file Schedule R (Form 941) if they have clients that are claiming the qualified small business payroll tax credit for increasing research activities, the credit for qualified sick and family leave wages, or the employee retention credit, or clients deferring the employer share of social security tax. If you're an other third-party payer that didn't file Schedule R (Form 941) with Form 941, because you didn't meet these requirements, but are now filing Form 941-X to report these credits or the deferral of the employer share of social security tax for your clients, then you must now file Schedule R (Form 941) and attach it to Form 941-X.

General Instructions: Understanding Form 941-X

What Is the Purpose of Form 941-X?

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;

  • Deferred amount of the employer share of social security tax;

  • Qualified small business payroll tax credit for increasing research activities;

  • Amounts reported on Form 941 for the credit for qualified sick and family leave wages, including adjustments to Form 941, lines 5a(i), 5a(ii), 11b, 13c, 19, and 20; and

  • Amounts reported on Form 941 for the employee retention credit, including adjustments to Form 941, lines 11c, 13d, 21, and 22, (for the second quarter of 2020, also Form 941, lines 24 and 25).

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

.This is an Image: taxtip.gifReferences 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 IRS.gov/irb/2009-52_IRB#RR-2009-39..

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’re correcting; and

  • Generally, file Form 941-X separately. Don't file Form 941-X with Form 941. However, if you didn't previously file Form 941 because you mistakenly treated your employees as nonemployees, you may have to file Form 941-X with Form 941. See the instructions for line 36, later.

If you didn’t file a Form 941 for one or more quarters, don’t use Form 941-X. Instead, file Form 941 for each of those quarters. See also When Should You File Form 941-X, later. However, if you didn’t 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 36, later.

Report the correction of underreported and overreported amounts for the same tax period on a single Form 941-X, unless you’re requesting a refund or abatement. If you’re 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’ll 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’re correcting overreported amounts during the last 90 days of a period of limitations. You’ll use the claim process if you overreported employment taxes and are requesting a refund or abatement of the overreported amount. Follow the chart on page 5 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 37 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 and Forms W-2c 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.

.This is an Image: caution.gifDon’t use Form 941-X to correct Form CT-1, 943, 944, 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:

  • Go to IRS.gov/EmploymentTaxes and IRS.gov/CorrectingEmploymentTaxes;

  • See Pub. 15 for correcting Form 941, or Pub. 80, 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; or

  • Call the IRS Business and Specialty Tax Line at 800-829-4933 or 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).

See also How Can You Get 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 (Form 941, line 1) 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, don’t 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, later. For overreported amounts, you may choose to either make an interest-free adjustment or file a claim for refund or abatement. If you’re 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 (PDS) on or before the due date. If you don’t follow these guidelines, we will consider Form 941-X filed when it is actually received. See Pub. 15 or Pub. 80 for more information on legal holidays. For more information about PDSs, see Where Should You File Form 941-X, later.

Underreported tax.

If you’re 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 (FTP) or failure-to-deposit (FTD) penalties. See What About Penalties and Interest, later. For details on how to make a payment, see the instructions for line 27, 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" FTD penalty. See “Averaged” FTD penalty in section 11 of Pub. 15 or section 8 of Pub. 80 for more information about “averaged” FTD penalties. 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 12, combined with any correction entered on Form 941-X, line 23) 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 April 10, 2020, you discovered that you underreported $10,000 of social security and Medicare wages on your 2019 first quarter Form 941. File Form 941-X and pay the amount you owe by July 31, 2020, because you discovered the error in the second quarter of 2020, and July 31, 2020, is the due date for that quarter. If you file Form 941-X before July 31, 2020, pay the amount you owe by the time you file.

.This is an Image: taxtip.gifThe due date for filing the adjusted return is determined by the type of return (Form 941 or Form 944) being corrected, without regard to your current filing requirements. Therefore, if you're currently filing Form 941 and you're correcting a previously filed Form 944, you must file Form 944-X by January 31 of the year following the year you discover the error..

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 discover 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, 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.

.This is an Image: caution.gifYou 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 2018 fourth quarter Form 941 on January 28, 2019, and payments were timely made. The IRS treats the return as if it were filed on April 15, 2019. On January 20, 2022, 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 18, 2022, which is the end of the period of limitations for Form 941, and use the claim process.

.This is an Image: caution.gifIf you file Form 941-X to correct overreported amounts in the last 90 days of a period of limitations, you must use the claim process. You can’t use the adjustment process. If you’re 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’re in . . . THEN use this address . . .
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
Special filing address 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

PDSs can't deliver to P.O. boxes. You must use the U.S. Postal Service to mail an item to a P.O. box address. Go to IRS.gov/PDS for the current list of PDSs. If you file Form 941-X using a PDS, send it to the following address.

Ogden - Internal Revenue Submission Processing Center
1973 Rulon White Blvd.
Ogden, UT 84201
Use this address even if your business is located in a state that files in Cincinnati.

How Should You Complete Form 941-X?

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

Use a separate Form 941-X for each Form 941 that you’re correcting. For example, if you found errors on your Forms 941 for the third and fourth quarters of 2019, file one Form 941-X to correct the 2019 third quarter Form 941. File a second Form 941-X to correct the 2019 fourth quarter Form 941.

Employer Identification Number (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, 3, and 4, 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. Be sure to write your name, EIN, "Form 941-X," the calendar quarter you’re correcting (for example, "Quarter 2"), and the calendar year of the quarter you’re correcting on the top of any attachments.

Return You’re Correcting

In the box at the top of page 1, check the type of return (Form 941 or Form 941-SS) you’re correcting. Check the appropriate box for the one quarter you’re correcting. Enter the calendar year of the Form 941 you’re correcting. Enter the quarter and calendar year on pages 2, 3, and 4.

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’re 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 37.

Must You Make an Entry on Each Line?

You must provide all of the information requested at the top of page 1 of Form 941-X. 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 doesn’t 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’re 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, even if it is zero. Don’t round entries to whole dollars.

  • Complete all four pages and sign Form 941-X on page 4.

  • Staple multiple sheets in the upper-left corner.

What About Penalties and Interest?

Generally, your correction of an underreported amount won’t be subject to an FTP penalty, FTD penalty, or interest if you:

  • File on time (by the due date of Form 941 for the quarter in which you discover the error),

  • Pay the amount shown on line 27 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 under section 7436.

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. Don’t attach an explanation when you file your return.

Overview of the Process

To correct a previously filed Form 941, use Form 941-X to file either an adjusted employment tax return or a claim for refund or abatement. The adjustment process and the claim process are 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 27, later.

Example—You underreported employment taxes.

On January 15, 2021, you discover an error that results in additional tax on your 2020 third quarter Form 941. File Form 941-X by April 30, 2021, and pay the amount you owe by the time you file. See When Should You File Form 941-X, earlier. Don’t attach Form 941-X to your 2021 first 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 27 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 27.

.This is an Image: taxtip.gifTo 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’re encouraged to file Form 941-X correcting the overreported amount in the first 2 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 2 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..

.This is an Image: taxtip.gif .

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

On September 18, 2020, you discover you overreported your tax on your 2019 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 October 2, 2020, and take the credit on your fourth quarter 2020 Form 941.

.

.This is an Image: taxtip.gifIf you currently file Form 944 and you’re 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..

Specific Instructions:

Part 1: Select ONLY One Process

Because Form 941-X may be used to file either an adjusted employment tax return or a claim for refund or abatement, you must check one box on either line 1 or line 2. Don’t check both boxes.

1. Adjusted Employment Tax Return

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

If you’re 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 27 will be applied as a credit (tax deposit) to your Form 941 or Form 944 for the period in which you’re filing this form. See Example—You want your overreported tax applied as a credit to Form 941, earlier.

If you owe tax.

Pay the amount shown on line 27 by the time you file Form 941-X. Generally, you won’t be charged interest if you file on time, pay on time, enter the date you discovered the error, and explain the correction on line 37.

If you have a credit.

You overreported employment taxes (you have a negative amount on line 27) 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 27, 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.

.This is an Image: caution.gif Don’t check the box on line 1 if you’re 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. See Is There a Deadline for Filing Form 941-X, earlier. .

2. Claim

Check the box on line 2 to use the claim process if you’re correcting overreported amounts only and you’re claiming a refund or abatement for the negative amount (credit) shown on line 27. Don’t check this box if you’re 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 27, plus any interest that applies.

.This is an Image: caution.gifYou may not file a refund claim to correct federal income tax or Additional Medicare Tax actually withheld from employees..

Part 2: Complete the Certifications

You must complete all certifications that apply by checking the appropriate boxes. If all of your corrections relate to underreported amounts, complete line 3 only; skip lines 4 and 5 and go to Part 3. If your corrections relate to overreported amounts, you have a duty to ensure that your employees' rights to recover overpaid employee social security and Medicare taxes that you withheld are protected. The certifications on lines 4 and 5 address the requirement to:

  • Repay or reimburse your employees for the overcollection of employee social security and Medicare taxes, or

  • Obtain consents from your employees to file a claim on their behalf. See Rev. Proc. 2017-28 for guidance on the requirements for both a request for employee consent and for the employee consent.

3. Filing Forms W-2 or Forms W-2c

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 don’t change amounts shown on those forms. For example, if your only correction to Form 941 involves misstated tax adjustments, which don't impact the amounts reported on your employee's Forms W-2 (see the instructions for line 15, later), check the box on line 3 to certify that you already filed all required Forms W-2 and W-2c with the SSA. In this situation, you're certifying that you don't need to file Form W-2c because you already filed a correct Form W-2.

4. Certifying Overreporting Adjustments

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 couldn’t locate employees or secure the statements of the remaining employees, check all applicable boxes. Provide a summary on line 37 of the amount of the corrections both for the employees who provided written statements and for those who didn’t.

4a.

Check the box on line 4a if your overreported amount includes each affected employee share of overcollected taxes. You’re certifying that you repaid or reimbursed the employee share of current and prior year taxes and you received written statements from the employees stating that they didn’t and won’t receive a refund or credit for the prior year taxes. You’re certifying that you adjusted federal income tax or Additional Medicare Tax withheld from employees for the current calendar year only. Don’t send these statements to the IRS. Keep them for your records. Generally, all employment tax records must be kept for at least 4 years. Copies must be submitted to the IRS if requested.

4b.

Check the box on line 4b to certify that your overreported amount is only for the employer share of taxes on those employees who you were unable to find or those who didn’t give you a statement described on line 4a.

4c.

Check the box on line 4c to certify that your overreported amount is only for federal income tax, social security tax, Medicare tax, or Additional Medicare Tax that you didn’t withhold from your employees.

5. Certifying Claims

If you’re 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 couldn’t locate employees or secure the statements or consents of the remaining employees, check all applicable boxes. Provide a summary on line 37 of the amount of the corrections for both the employees who provided statements or consents and for those who didn’t.

.This is an Image: caution.gifYou can’t file a refund claim to correct the incorrect amount of federal income tax or Additional Medicare Tax actually withheld from employees in a prior year. If you request their consent to file a claim for social security tax or Medicare tax, you must tell your employees that you can’t claim a refund of any Additional Medicare Tax on their behalf. See Rev. Proc. 2017-28 for sample language to use in your request..

5a.

Check the box on line 5a if your overreported tax includes each affected employee share of social security and Medicare taxes. You’re certifying that you repaid or reimbursed to the employees their share of social security and Medicare taxes. For refunds of employee social security and Medicare taxes overcollected in prior years, you’re certifying that you received written statements from those employees stating that they didn’t and won’t receive a refund or credit for the prior year taxes. Don’t send these statements to the IRS. Keep them for your records. Generally, all employment tax records must be kept for at least 4 years. Copies must be submitted to the IRS if requested.

5b.

Check the box on line 5b if your overreported tax includes each affected employee share of social security and Medicare taxes and you haven’t yet repaid or reimbursed the employee share of taxes. You’re certifying that you received consent from each affected employee to file a claim on the employee share of those taxes and you received written statements from those employees stating that they didn’t and won’t receive a refund or credit for the prior year taxes.

An employee consent must:

  • Contain the name, address, and social security number (or truncated taxpayer identification number, when appropriate) of the employee;

  • Contain the name, address, and EIN of the employer;

  • Contain the tax period(s), type of tax, and the amount of tax for which the consent is provided;

  • Affirmatively state that the employee authorizes the employer to claim a refund for the overpayment of the employee share of tax;

  • For amounts collected in a prior year, include the employee’s written statement certifying that the employee hasn’t made any previous claims (or the claims were rejected) and won’t make any future claims for refund or credit of the amount of the overcollection;

  • Identify the basis of the claim; and

  • Be dated and contain the employee’s signature under penalties of perjury. The penalties of perjury statement should be located immediately above the required signature.

Don’t send these statements and consents to the IRS. Keep them for your records. Generally, all employment tax records must be kept for at least 4 years. Copies must be submitted to the IRS if requested.

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 don’t check a box on line 5. Tell us on line 37 that you haven’t repaid or reimbursed employees or obtained consents at the time you file the claim. However, you must repay or reimburse your employees and certify that you’ve done so before the IRS can allow the claim.

5c.

Check the box on line 5c to certify that your overreported tax is only for the employer share of social security and Medicare taxes. This applies when affected employees didn’t give you consent to file a claim for refund for the employee share of social security and Medicare taxes, they couldn’t be found, or they didn’t give you a statement described on line 5b.

5d.

Check the box on line 5d to certify that your overreported amount is only for federal income tax, social security tax, Medicare tax, or Additional Medicare Tax that you didn’t withhold from your employees.

Part 3: Enter the Corrections for This Quarter

What Amounts Should You Report in Part 3?

On lines 6–13, columns 1 and 2, for each line you're correcting, show amounts for all of your employees, not just for those employees whose amounts you’re correcting.

If a correction that you report in column 4 includes both underreported and overreported amounts (see the instructions for line 35, later), give us details for each error on line 37.

Because special circumstances apply for lines 14–22, 24–26, and 28–34, read the instructions for each line carefully before entering amounts in the columns.

If any line doesn't apply to you, leave it blank.

.This is an Image: caution.gif If you previously adjusted or amended Form 941 by using Form 941-X or because of an IRS examination change, show amounts in column 2 that include those previously reported corrections. .

6. Wages, Tips, and Other Compensation

If you’re 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 or as previously corrected. In column 3, enter the difference between columns 1 and 2. This line doesn’t 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.

line 6 (column 1)
- line 6 (column 2)
line 6 (column 3) If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Example—Wages, tips, and other compensation increased.

You reported $9,000 as total wages, tips, and other compensation on line 2 of your 2020 first quarter Form 941. In May of 2020, you discovered that you had overlooked $1,000 in tips for one of your employees. To correct the error, figure the difference on Form 941-X as shown.

Column 1 (corrected amount) 10,000.00
Column 2 (Form 941, line 2) - 9,000.00
Column 3 (difference) 1,000.00

Example—Wages, tips, and other compensation decreased.

You reported $9,000 as wages, tips, and other compensation on line 2 of your 2020 first quarter Form 941. In May of 2020, you discovered that you included $2,000 in wages for one of your employees twice. To correct the error, figure the difference on Form 941-X as shown.

Column 1 (corrected amount) 7,000.00
Column 2 (Form 941, line 2) - 9,000.00
Column 3 (difference) - 2,000.00

Example—Auto allowance; wages, tips, and other compensation increased.

You paid one of your employees a $500 monthly auto allowance from October through December 2019, and didn’t treat the payments as taxable wages. In February 2020, you realized that the payments were wages because they weren’t reimbursements of deductible business expenses that were substantiated and paid under an accountable plan. You correct the error by treating the auto allowance as wages subject to income, social security, and Medicare taxes. Report the additional $1,500 of wages on Form 941-X, lines 6, 8, 12, and, if applicable, line 13.

Be sure to explain the reasons for the corrections on line 37.

.This is an Image: taxtip.gifThe quarterly amount on line 6, column 1, should be used to figure the annual amount to report on your Forms W-2 or Forms W-2c. This amount should also generally be used for any business expense deduction on your income tax return (or amended return) for wages paid..

7. Federal Income Tax Withheld From Wages, Tips, and Other Compensation

If you’re 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 doesn’t apply to Form 941-SS.

line 7 (column 1)
- line 7 (column 2)
line 7 (column 3) If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.
Copy the amount in column 3 to column 4. Include any minus sign shown in column 3.

.This is an Image: caution.gifGenerally, you may correct federal income tax withholding errors only if you discovered the errors in the same calendar year you paid the wages. In addition, for an overcollection, you may correct federal income tax withholding only if you also repaid or reimbursed the employees in the same year. For prior years, you may only correct administrative errors to federal income tax withholding (that is, errors in which the amount reported on Form 941, line 3, isn't the amount you actually withheld from an employee’s wages) and errors for which section 3509 rates apply. Only transposition or math errors involving the inaccurate reporting of the amount withheld are "administrative errors." See section 13 of Pub. 15 for more information about corrections during the calendar year and about administrative errors. See section 2 of Pub. 15 for more information about section 3509. If section 3509 rates apply, see the instructions for lines 19–22, later..

.This is an Image: caution.gifYou can’t file a Form 941-X to correct federal income tax withholding for prior years for nonadministrative errors. In other words, you can’t correct federal income tax actually withheld from an employee in a prior year if you discover that you didn’t withhold the right amount. For example, you can’t correct federal income tax withheld in a prior year because you used the wrong income tax withholding table or you didn’t treat a payment correctly as taxable or nontaxable. Similarly, if you paid federal income tax in a prior year on behalf of your employee, rather than deducting it from the employee’s pay (which resulted in additional wages subject to tax), and in a subsequent year you determine that you incorrectly calculated the amount of tax, you can’t correct the federal income tax withholding..

Example—Prior year nonadministrative error (failure to withhold federal income tax when required).

You were required to withhold $400 of federal income tax from an employee's bonus that was paid in December of 2019 but you withheld nothing. You discovered the error on March 16, 2020. You can’t file Form 941-X to correct federal income tax withheld reported on your 2019 fourth quarter Form 941 because the error involves a previous year and the amount previously reported for the employee represents the actual amount withheld from the employee during 2019.

Example—Prior year administrative error (incorrectly reported amount of federal income tax actually withheld).

You had three employees. In the fourth quarter of 2019, you withheld $1,000 of federal income tax from Xavier Black, $2,000 from Sophie Rose, and $6,000 from Leo Wood. The total amount of federal income tax you withheld was $9,000. You mistakenly reported $6,000 on line 3 of your 2019 fourth quarter Form 941. You discovered the error on March 13, 2020. This is an example of an administrative error that may be corrected in a later calendar year because the amount actually withheld from the employees' wages isn’t the amount reported on Form 941. Use Form 941-X to correct the error. Enter $9,000 in column 1 and $6,000 in column 2. Subtract the amount in column 2 from the amount in column 1.

Column 1 (corrected amount) 9,000.00
Column 2 (Form 941, line 3) - 6,000.00
Column 3 (difference) 3,000.00
Report the $3,000 as a tax correction in column 4.

Be sure to explain the reasons for this correction on line 37.

Example—Nonadministrative error reporting federal income tax because of repayment of wages paid in prior year.

You prepaid Jack Brown $4,000 of wages for 2 months of work in September 2019. You withheld $400 of federal income tax at the time you paid Jack. These amounts were reported on your 2019 third quarter Form 941. Jack left employment in October 2019 (after only 1 month of service). In January 2020, Jack repaid $2,000 to you for the 1 month he didn't work. You can’t file Form 941-X to reduce the federal income tax withheld because you actually withheld the federal income tax from wages. You also can’t file Form 941-X to reduce wages because the wages were income to Jack for the prior year. These amounts were correctly reported on Form 941.

8. Taxable Social Security Wages

If you’re 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.

line 8 (column 1)
- line 8 (column 2)
line 8 (column 3) 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 0.124 and enter that result in column 4.

line 8 (column 3)
x 0.124
line 8 (column 4) If the amount in column 3 used a minus sign, also use a minus sign in column 4.

Note.

If you checked the box on Form 941-X, line 4b or line 5c, because you’re correcting only the employer share of tax on a decrease to social security wages, use 0.062 (6.2%) when multiplying the amount shown in column 3. If you’re correcting both shares of tax for some employees and only the employer share for other employees, enter the properly calculated amount in column 4. Be sure to show your calculations on line 37.

Example—Social security wages decreased.

Following Example—Wages, tips, and other compensation decreased in the instructions for line 6, the wages that you counted twice were also taxable social security wages. To correct the error, figure the difference on Form 941-X as shown.

Column 1 (corrected amount) 7,000.00
Column 2 (Form 941, line 5a, column 1) - 9,000.00
Column 3 (difference) - 2,000.00

Use the difference in column 3 to determine your tax correction.

Column 3 (difference) - 2,000.00
Tax rate (12.4%) x 0.124
Column 4 (tax correction) - 248.00

Be sure to explain the reasons for this correction on line 37.

9. Qualified Sick Leave Wages

.This is an Image: taxtip.gifAdjustments to the social security tax on qualified sick leave wages and qualified family leave wages are reported on Form 941‐X, lines 9 and 10, respectively. Adjustments to the nonrefundable portion of the credit for qualified sick and family leave wages are reported on Form 941‐X, line 17, and adjustments to the refundable portion of the credit are reported on Form 941‐X, line 25. Adjustments to qualified health plan expenses allocable to qualified sick leave wages and to qualified family leave wages are reported on Form 941‐X, lines 28 and 29, respectively. Qualified sick and family leave wages and the related credits for qualified sick and family leave wages are only reported on Form 941 with respect to wages paid for leave taken in quarters beginning after March 31, 2020, and before January 1, 2021, unless extended by future legislation (check IRS.gov/Form941X for updates). If you're correcting a quarter beginning before April 1, 2020, don’t enter any amounts on lines 9, 10, 17, 25, 28, and 29. If you paid qualified sick and family leave wages in 2021 for 2020 leave, you will claim the credit on your 2021 Form 941. If you claimed the credit for qualified sick and family leave wages on your original Form 941 for the quarter, and you make any corrections on Form 941‐X for the quarter to amounts used to figure this credit, you will need to refigure the amount of this credit using Worksheet 1, later. You will also use this worksheet to figure this credit if you’re claiming the credit for the first time on Form 941-X. For more information about the credit for qualified sick and family leave wages, go to IRS.gov/PLC..

Qualified sick leave wages aren't subject to the employer share of social security tax; therefore, the tax rate on these wages is 6.2% (0.062). For more information about qualified sick leave wages, go to IRS.gov/PLC. If you’re correcting the qualified sick leave wages you reported on Form 941, line 5a(i), 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.

line 9 (column 1)
- line 9 (column 2)
line 9 (column 3) 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 0.062 and enter that result in column 4.

line 9 (column 3)
x 0.062
line 9 (column 4) If the amount in column 3 used a minus sign, also use a minus sign in column 4.

Note.

If you erroneously reported qualified sick leave wages on Form 941, line 5a, instead of on line 5a(i), you will need to make a correction on Form 941-X, lines 8 and 9, and enter the properly calculated amount in column 4 for each line.

Example—Qualified sick leave wages increased.

You paid $2,000 of qualified sick leave wages to only one of your employees in the second quarter of 2020. In September 2020, you discover that you only reported $1,000 of qualified sick leave wages on Form 941 for the second quarter. To correct the error, figure the difference on Form 941‐X as shown.

Column 1 (corrected amount) 2,000.00
Column 2 (Form 941, line 5a(i), column 1) - 1,000.00
Column 3 (difference) 1,000.00

Use the difference in column 3 to determine your tax correction.

Column 3 (difference) 1,000.00
Tax rate (6.2%) x 0.062
Column 4 (tax correction) 62.00

Be sure to explain the reasons for this correction on line 37.

10. Qualified Family Leave Wages

Qualified family leave wages aren't subject to the employer share of social security tax; therefore, the tax rate on these wages is 6.2% (0.062). For more information about qualified family leave wages, go to IRS.gov/PLC. If you’re correcting the qualified family leave wages you reported on Form 941, line 5a(ii), 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.

line 10 (column 1)
- line 10 (column 2)
line 10 (column 3) 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 0.062 and enter that result in column 4.

line 10 (column 3)
x 0.062
line 10 (column 4) If the amount in column 3 used a minus sign, also use a minus sign in column 4.

Note.

If you erroneously reported qualified family leave wages on Form 941, line 5a, instead of on line 5a(ii), you will need to make a correction on Form 941-X, lines 8 and 10, and enter the properly calculated amount in column 4 for each line.

Example—Qualified family leave wages decreased.

You paid $1,000 of qualified family leave wages to only one of your employees in the second quarter of 2020. In September 2020, you discover that you erroneously reported $3,000 of qualified family leave wages on Form 941 for the second quarter. To correct the error, figure the difference on Form 941‐X as shown.

Column 1 (corrected amount) 1,000.00
Column 2 (Form 941, line 5a(ii), column 1) - 3,000.00
Column 3 (difference) - 2,000.00

Use the difference in column 3 to determine your tax correction.

Column 3 (difference) - 2,000.00
Tax rate (6.2%) x 0.062
Column 4 (tax correction) - 124.00

Be sure to explain the reasons for this correction on line 37.

11. Taxable Social Security Tips

If you’re 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.

line 11 (column 1)
- line 11 (column 2)
line 11 (column 3) 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 0.124 and report that result in column 4.

line 11 (column 3)
x 0.124
line 11 (column 4) If the amount in column 3 used a minus sign, also use a minus sign in column 4.

Note.

If you checked the box on Form 941-X, line 4b or line 5c, because you’re correcting only the employer share of tax on a decrease to social security tips, use 0.062 (6.2%) when multiplying the amount shown in column 3. If you’re correcting both shares of tax for some employees and only the employer share for other employees, report the properly calculated amount in column 4. Be sure to show your calculations on line 37.

Example—Social security tips increased.

Following Example—Wages, tips, and other compensation increased in the instructions for line 6, the tips that you overlooked were also taxable social security tips. To correct the error, figure the difference on Form 941-X as shown.

Column 1 (corrected amount) 10,000.00
Column 2 (Form 941, line 5b, column 1) - 9,000.00
Column 3 (difference) 1,000.00

Use the difference in column 3 to determine your tax correction.

Column 3 (difference) 1,000.00
Tax rate (12.4%) x 0.124
Column 4 (tax correction) 124.00

Be sure to explain the reasons for this correction on line 37.

12. Taxable Medicare Wages & Tips

If you’re 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.

line 12 (column 1)
- line 12 (column 2)
line 12 (column 3) 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 0.029 (2.9% tax rate) and enter that result in column 4.

line 12 (column 3)
x 0.029
line 12 (column 4) If the amount in column 3 used a minus sign, also use a minus sign in column 4.

Note.

If you checked the box on Form 941-X, line 4b or line 5c, because you’re correcting only the employer share of tax on a decrease to Medicare wages and tips, use 0.0145 (1.45%) when multiplying the amount in column 3. If you’re correcting both shares of tax for some employees and only the employer share for other employees, enter the properly calculated amount in column 4. Be sure to explain your calculations on line 37.

Example—Medicare wages and tips decreased.

Following Example—Wages, tips, and other compensation decreased in the instructions for line 6, the wages that you counted twice were also taxable Medicare wages and tips. To correct the error, figure the difference on Form 941-X as shown.

Column 1 (corrected amount) 7,000.00
Column 2 (Form 941, line 5c, column 1) - 9,000.00
Column 3 (difference) - 2,000.00

Use the difference in column 3 to determine your tax correction.

Column 3 (difference) - 2,000.00
Tax rate (2.9%) x 0.029
Column 4 (tax correction) - 58.00

Be sure to explain the reasons for this correction on line 37.

13. Taxable Wages & Tips Subject to Additional Medicare Tax Withholding

Generally, you may correct errors to Additional Medicare Tax withholding only if you discovered the errors in the same calendar year the wages and tips were paid to employees. However, you may correct errors to Additional Medicare Tax withholding for prior years if the amount reported on Form 941, line 5d, column 2, isn’t the amount you actually withheld, including any amount you paid on behalf of your employee rather than deducting it from the employee’s pay (which resulted in additional wages subject to tax). This type of error is an administrative error. The administrative error adjustment corrects the amount reported on Form 941 to agree with the amount actually withheld from employees.

You may also correct errors to Additional Medicare Tax withholding for prior years if section 3509 rates apply. If section 3509 rates apply, see the instructions for lines 19–22, later.

If a prior year error was a nonadministrative error, you may correct only the wages and tips subject to Additional Medicare Tax withholding that were originally reported on Form 941, line 5d, column 1, or previously corrected on Form 941-X. You can’t correct the tax reported on Form 941, line 5d, column 2.

Errors discovered in the same calendar year or prior year administrative errors.

If you’re 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.

line 13 (column 1)
- line 13 (column 2)
line 13 (column 3) 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 0.009 (0.9% tax rate) and enter that result in column 4.

line 13 (column 3)
x 0.009
line 13 (column 4) If the amount in column 3 used a minus sign, also use a minus sign in column 4.

Example—Prior year administrative error (incorrectly reported amount of Additional Medicare Tax actually withheld).

Xavier Black's wages exceeded the $200,000 withholding threshold for Additional Medicare Tax in November 2019. The total wages paid to Xavier for 2019 were $230,000. You withheld $270 ($30,000 x 0.009) from Xavier's wages. However, on your fourth quarter 2019 Form 941 you mistakenly reported $3,000 on line 5d, column 1, and Additional Medicare Tax withheld of $27 on line 5d, column 2. You discover the error on March 16, 2020. This is an example of an administrative error that may be corrected in a later calendar year because the amount actually withheld isn’t the amount reported on your fourth quarter 2019 Form 941. Use Form 941-X, line 13, to correct the error as shown below.

Column 1 (corrected amount) 30,000.00
Column 2 (Form 941, line 5d, column 1) - 3,000.00
Column 3 (difference) 27,000.00

Use the difference in column 3 to determine your tax correction.

Column 3 (difference) 27,000.00
Tax rate (0.9%) x 0.009
Column 4 (tax correction) 243.00

Be sure to explain the reasons for this correction on line 37.

Prior year nonadministrative errors.

You may correct only 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.

line 13 (column 1)
- line 13 (column 2)
line 13 (column 3) If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Don’t multiply the amount in column 3 by 0.009 (0.9% tax rate). Leave column 4 blank and explain the reasons for this correction on line 37.

Example—Prior year nonadministrative error (failure to withhold Additional Medicare Tax when required).

Sophie Rose’s wages exceeded the $200,000 withholding threshold for Additional Medicare Tax in December 2019. The total wages paid to Sophie for 2019 were $220,000. You were required to withhold $180 ($20,000 x 0.009) but you withheld nothing and didn’t report an amount on line 5d of your fourth quarter 2019 Form 941. You discover the error on March 16, 2020. File Form 941-X to correct wages and tips subject to Additional Medicare Tax withholding for your 2019 fourth quarter Form 941, but you may not correct the Additional Medicare Tax withheld (column 4) because the error involves a previous year and the amount previously reported for Sophie represents the actual amount withheld from Sophie during 2019.

Combination of prior year administrative and nonadministrative errors.

If you’re reporting both administrative errors and nonadministrative errors for the same quarter of a prior year, 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. However, multiply only the amount of wages and tips reported in column 3 that are related to administrative errors by 0.009 (0.9% tax rate). Don’t multiply any wages and tips reported in column 3 that are related to nonadministrative errors by 0.009 (0.9% tax rate). Use line 37 to explain in detail your corrections. The explanation must include the reasons for the corrections and a breakdown of the amount reported in column 3 into the amounts related to administrative errors and nonadministrative errors.

Example—Combination of prior year administrative and nonadministrative errors.

Xavier Black’s wages exceeded the $200,000 withholding threshold for Additional Medicare Tax in November 2019. The total wages paid to Xavier for 2019 were $230,000. You withheld $270 ($30,000 x 0.009) from Xavier's wages. However, on your fourth quarter 2019 Form 941 you mistakenly reported $3,000 on line 5d, column 1, and Additional Medicare Tax withheld of $27 on line 5d, column 2. The difference in wages subject to Additional Medicare Tax related to this administrative error is $27,000 ($30,000 - $3,000).

Sophie Rose‘s wages exceeded the $200,000 withholding threshold for Additional Medicare Tax in December 2019. The total wages paid to Sophie for 2019 were $220,000. You were required to withhold $180 ($20,000 x 0.009) but you withheld nothing and didn’t report Sophie's $20,000 in wages subject to Additional Medicare Tax withholding on line 5d of your fourth quarter 2019 Form 941.

You discover both errors on March 16, 2020. Use Form 941-X, line 13, to correct the errors as shown below.

Column 1 (corrected amount) 50,000.00
Column 2 (Form 941, line 5d, column 1) - 3,000.00
Column 3 (difference) 47,000.00

Determine the portion of wages and tips reported in column 3 that is related to the administrative error ($47,000 - $20,000 (nonadministrative error) = $27,000 (administrative error)). Multiply this portion of column 3 by 0.009 (0.9% tax rate) to determine your tax correction.

Difference related to administrative error 27,000.00
Tax rate (0.9%) x 0.009
Column 4 (tax correction) 243.00

Be sure to explain the reasons for these corrections on line 37. You must also report that $20,000 of the amount shown in column 3 was related to the correction of a prior year nonadministrative error and $27,000 of the amount shown in column 3 was related to the correction of an administrative error.

14. Section 3121(q) Notice and Demand—Tax on Unreported Tips

Enter on line 14 any corrections to amounts reported on Form 941, line 5f, for the tax due from a Section 3121(q) Notice and Demand. 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 isn’t 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.

15. Tax Adjustments

Use line 15 to correct any adjustments reported on Form 941, lines 7–9. Enter in column 1 the total corrected amount for Form 941, lines 7–9.

Enter in column 2 the total originally reported or previously corrected amounts from Form 941, lines 7–9. In column 3, enter the difference between columns 1 and 2.

line 15 (column 1)
-line 15 (column 2)
line 15 (column 3)

.This is an Image: taxtip.gifYou may need to report negative numbers in any column. Make sure that the difference you enter in column 3 accurately represents the change to adjustments originally reported or previously corrected on Form 941, lines 7–9..

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

On line 37, 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.

Example—Current quarter's third-party sick pay underreported.

You reported $6,900 (shown as "-6,900.00") as a third-party sick pay adjustment (reduction to tax) on line 8 of your 2019 second quarter Form 941. You didn’t report any amounts on lines 7 and 9. Your third-party sick pay adjustment should’ve been $9,600 (shown as "-9,600.00") because your third-party sick pay payer withheld that amount of social security and Medicare taxes from your employees. You discovered the error in April of 2020. To correct the error, figure the difference on Form 941-X as shown.

Column 1 (corrected amount) - 9,600.00
Column 2 (Form 941, line 8) - (6,900.00)
Column 3 (difference) - 2,700.00

Here is how you would enter the numbers on Form 941-X.

Column 1 Column 2 Column 3
(corrected amount) (Form 941, line 8) (difference)
-9,600.00 -6,900.00 - 2,700.00

Report "-2,700.00" as your correction in column 4.

In this example, you’re claiming a credit for $2,700 in overreported tax for your 2019 second quarter Form 941. Always enter the same amount in column 4 (including any minus sign) that you enter in column 3.

Be sure to explain the reasons for this correction on line 37.

16. Qualified Small Business Payroll Tax Credit for Increasing Research Activities

If you’re correcting the qualified small business payroll tax credit for increasing research activities that you reported on Form 941, line 11a (line 11 for quarters beginning before April 1, 2020), 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.

Copy the amount in column 3 to column 4. However, to properly show the amount 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.

You must attach a corrected Form 8974 and explain the reasons for this correction on line 37.

.This is an Image: caution.gifThe payroll tax credit election must be made on or before the due date of the originally filed income tax return (including extensions). Any election to take the payroll tax credit may be revoked only with the consent of the IRS. .

17. Nonrefundable Portion of Credit for Qualified Sick and Family Leave Wages

.This is an Image: taxtip.gifForm 941-X and these instructions use the terms "nonrefundable" and "refundable" when discussing credits. We use the term "nonrefundable" to mean the portion of the credit which is limited by law to the amount of the employer share of social security tax. We use the term "refundable" to mean the portion of the credit which is in excess of the employer share of social security tax..

If you’re correcting the nonrefundable portion of the credit for qualified sick and family leave wages that you reported on Form 941, line 11b, enter the total corrected amount from Worksheet 1, Step 2, line 2j, 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. For more information about the credit for qualified sick and family leave wages, go to IRS.gov/PLC.

Copy the amount in column 3 to column 4. However, to properly show the amount 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.

The credit for qualified sick and family leave wages is only available for wages paid with respect to leave taken for quarters beginning after March 31, 2020, and before January 1, 2021, unless extended by future legislation (check IRS.gov/Form941X for updates). If you paid qualified sick and family leave wages in 2021 for 2020 leave, you will claim the credit on your 2021 Form 941. If you're correcting a quarter beginning before April 1, 2020, don’t enter any amount on line 17.

Example—Nonrefundable portion of credit for qualified sick and family leave wages increased.

Following Example—Qualified sick leave wages increased in the instructions for line 9, you originally reported a $1,000 nonrefundable portion of credit for qualified sick and family leave wages on Form 941, line 11b, for the second quarter of 2020. You use Worksheet 1 to refigure the correct nonrefundable portion of the credit for qualified sick and family leave wages and you determine that the correct credit is now $2,000. To correct the error, figure the difference on Form 941‐X as shown.

Column 1 (corrected amount) 2,000.00
Column 2 (Form 941, line 11b) - 1,000.00
Column 3 (difference) 1,000.00

To properly show the credit increase as a reduction to your tax balance, enter the positive number in column 3 as a negative number in column 4. Here is how you would enter the numbers on Form 941‐X, line 17.

Column 1 Column 2 Column 3 Column 4
(corrected amount) (Form 941, line 11b) (difference) (tax correction)
2,000.00 1,000.00 1,000.00 - 1,000.00

Be sure to explain the reasons for this correction on line 37.

18. Nonrefundable Portion of Employee Retention Credit

If you’re correcting the nonrefundable portion of the employee retention credit that you reported on Form 941, line 11c, enter the total corrected amount from Worksheet 1, Step 3, line 3j, 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. For more information about the employee retention credit, go to IRS.gov/ERC.

Copy the amount in column 3 to column 4. However, to properly show the amount 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.

Be sure to explain the reasons for this correction on line 37.

.This is an Image: taxtip.gifAdjustments to the nonrefundable portion of the employee retention credit are reported on Form 941-X, line 18, and adjustments to the refundable portion of the credit are reported on Form 941-X, line 26. Adjustments to qualified wages for the employee retention credit are reported on Form 941-X, line 30. Adjustments to qualified health plan expenses allocable to the employee retention credit are reported on Form 941-X, line 31. Adjustments to qualified wages paid March 13, 2020, through March 31, 2020, for the employee retention credit are reported on Form 941-X, line 33, and adjustments to qualified health plan expenses allocable to these wages are reported on Form 941-X, line 34. The employee retention credit may only be claimed on Form 941 filed for quarters beginning after March 31, 2020, and before January 1, 2021, unless extended by future legislation (check IRS.gov/Form941X for updates). If you're correcting a quarter beginning before April 1, 2020, don’t enter any amounts on lines 18, 26, 30, 31, 33, and 34. The employee retention credit for wages paid March 13, 2020, through March 31, 2020, is claimed on Form 941 for the second quarter of 2020; therefore, any corrections to the employee retention credit for the period from March 13, 2020, through March 31, 2020, should be reported on Form 941‐X filed for the second quarter of 2020. Don’t file Form 941‐X for the first quarter of 2020 to report these amounts. If you claimed the employee retention credit on your original Form 941 for the quarter, and you make any corrections on Form 941‐X for the quarter to amounts used to figure this credit, you will need to refigure the amount of the credit using Worksheet 1, later. You will also use this worksheet to figure this credit if you’re claiming the credit for the first time on Form 941-X. For more information about the employee retention credit, go to IRS.gov/ERC..

19–22. Special Additions to Wages for Federal Income Tax, Social Security Taxes, Medicare Taxes, and Additional Medicare Tax

Section 3509 provides special rates for the employee share of federal 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 can’t 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.

Note.

Section 3509 rates aren’t available if you intentionally disregarded the requirements to withhold taxes from the employee, or if you withheld federal income tax but didn’t withhold social security and Medicare taxes. Section 3509 rates are also not available for certain statutory employees.

On lines 19–22, 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.

  • For social security taxes, use the employer rate of 6.2% plus 20% of the employee rate of 6.2%, for a total rate of 7.44% of wages.

  • For Medicare taxes, use the employer rate of 1.45% plus 20% of the employee rate of 1.45%, for a total rate of 1.74% of wages.

  • For Additional Medicare Tax, 0.18% (20% of the employee rate of 0.9%) of wages subject to Additional Medicare Tax.

  • For federal income tax withholding, the rate is 1.5% of wages.

If the employer didn’t issue the required information returns, use the section 3509 rates as follows.

  • For social security taxes, use the employer rate of 6.2% plus 40% of the employee rate of 6.2%, for a total rate of 8.68% of wages.

  • For Medicare taxes, use the employer rate of 1.45% plus 40% of the employee rate of 1.45%, for a total rate of 2.03% of wages.

  • For Additional Medicare Tax, 0.36% (40% of the employee rate of 0.9%) of wages subject to Additional Medicare Tax.

  • For federal income tax withholding, the rate is 3.0% of wages.

Unlike some 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 in column 2 previously reported wages (if any) to reclassified employees. To get the amount for column 4, use the applicable section 3509 rates. If you filed the required information returns for some employees but didn’t file them for other employees, be sure to use the applicable rates for each employee when calculating the amounts in column 4 and show your calculations on line 37. 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 36, later, for more information.

23. Subtotal

Combine the amounts from column 4 on lines 7–22 and enter the result on line 23.

Example.

You entered "1,400.00" in column 4 on line 7, "-500.00" in column 4 on line 8, and "-100.00" in column 4 on line 12. Combine these amounts and enter "800.00" in column 4 on line 23.

Line 7 1,400.00
Line 8 - 500.00
Line 12 - 100.00
Line 23 800.00

24. Deferred Amount of the Employer Share of Social Security Tax

If you’re correcting the deferred amount of the employer share of social security tax that you reported on Form 941, line 13b, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected by you or the IRS. In column 3, enter the difference between columns 1 and 2.

Copy the amount in column 3 to column 4. However, because an increase to the deferred amount of the employer share of social security tax defers the payment due, to properly show the amount as a deferral of payment, enter a positive number in column 3 as a negative number in column 4. A decrease to the deferred amount of the employer share of social security tax decreases the payment you can defer and must be shown as a balance due item; therefore, to properly show the amount as a balance due item, enter a negative number in column 3 as a positive number in column 4.

If you’re filing Form 941-X to increase the amount of social security wages paid on or after March 27, 2020, and before January 1, 2021, so that there is an additional amount of social security tax that hasn’t yet been paid, and hasn’t yet been deferred, then you may use Form 941-X to increase the amount of the deferred employer share of social security tax originally reported on Form 941, line 13b. If you’re filing Form 941-X to decrease the amount of social security wages paid on or after March 27, 2020, and before January 1, 2021, so that there is a decrease in the amount of social security tax that is eligible for deferral, then you must use Form 941-X to decrease the amount of the deferred employer share of social security tax originally reported on Form 941, line 13b if the decrease in wages causes the amount you originally deferred to exceed the amount that is now eligible for deferral. Otherwise, you may only correct the amount of the deferred employer share of social security tax if the amount originally reported on Form 941, line 13b, isn’t the amount you actually deferred (for example, you incorrectly reported the amount that you actually deferred). If you already paid the correct amount of the employer’s share of social security tax for a calendar quarter during the payroll tax deferral period, you may not subsequently defer the payment by filing Form 941-X. See IRS.gov/ETD for more information about the interaction of credits and the deferral of employment tax deposits and payments.

The deferred amount of the employer share of social security tax is only available for deposits and payments due on or after March 27, 2020, and before January 1, 2021, as well as deposits and payments due after January 1, 2021, that are required for wages paid during the quarter ending on December 31, 2020. Check IRS.gov/Form941X to see if future legislation extends these dates. Generally, 50% of the deferred amounts must be paid by December 31, 2021, and the other 50% must be paid by December 31, 2022. For more information about the deferral of employment tax deposits and payments, including when the deferral must be paid, go to IRS.gov/ETD.

Be sure to explain the reasons for this correction on line 37.

25. Refundable Portion of Credit for Qualified Sick and Family Leave Wages

If you’re correcting the refundable portion of the credit for qualified sick and family leave wages that you reported on Form 941, line 13c, enter the total corrected amount from Worksheet 1, Step 2, line 2k, 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. For more information about the credit for qualified sick and family leave wages, go to IRS.gov/PLC.

Copy the amount in column 3 to column 4. However, to properly show the amount 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.

Be sure to explain the reasons for this correction on line 37.

26. Refundable Portion of Employee Retention Credit

If you’re correcting the refundable portion of the employee retention credit that you reported on Form 941, line 13d, enter the total corrected amount from Worksheet 1, Step 3, line 3k, 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. For more information about the employee retention credit, go to IRS.gov/ERC.

Copy the amount in column 3 to column 4. However, to properly show the amount 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.

Be sure to explain the reasons for this correction on line 37.

Corrections to Form 941, Line 13f

Form 941-X doesn't include a line to correct amounts reported on Form 941, line 13f, for the total advances received from filing Form(s) 7200 for the quarter. If a discrepancy exists between the amount reported on Form 941 and the amount of advance payments issued, the IRS will generally correct the amount reported on Form 941, line 13f, to match the amount of advance payments issued. However, aggregate filers may need to correct the amount reported on Form 941, line 13f, to reflect the correct advance payments received by their clients or customers. If you’re an aggregate filer that needs to correct the amount reported on Form 941, line 13f, include any increase or decrease to the amount in the “Total” reported on Form 941-X, line 27; write “Correction to line 13f” on the dotted line to the left of the entry box on line 27; explain your correction on line 37; and attach Schedule R (Form 941) to Form 941-X to show corrections for your clients or customers.

27. Total

Combine the amounts from column 4 on lines 23–26 and enter the result on line 27.

Your credit.

If the amount entered on line 27 is less than zero, for example, "-115.00," you have a credit because you overreported your federal employment taxes.

  • If you checked the box on line 1, include this amount on the "Total deposits" line of Form 941 for the quarter during which you filed Form 941-X. If you currently file Form 944 because your filing requirement changed, include this amount on the "Total deposits" line of Form 944 for the year during which you filed Form 941-X. Don’t make any changes to your record of federal tax liability reported on Form 941, line 16, or Schedule B (Form 941) if your Form 941-X is filed timely. The amounts reported on the record should reflect your actual tax liability for the period.

  • If you checked the box on line 2, you’re filing a claim for refund or abatement of the amount shown.

If your credit is less than $1, we will send a refund or apply it only if you ask us in writing to do so.

Amount you owe.

If the amount on line 27 is a positive number, you must pay the amount you owe by the time you file Form 941-X. You may not use any credit that you show on another Form 941-X to pay the amount you owe, even if you filed for the amount you owe and the credit at the same time.

If you owe tax and are filing a timely Form 941-X, don’t file an amended Schedule B (Form 941) unless you were assessed an FTD penalty caused by an incorrect, incomplete, or missing Schedule B (Form 941). Don’t include the tax increase reported on Form 941-X on any amended Schedule B (Form 941) you file.

If you owe tax and are filing a late Form 941-X, that is, after the due date for Form 941 for the quarter in which you discovered the error, you must file an amended Schedule B (Form 941) with the Form 941-X. Otherwise, the IRS may assess an "averaged" FTD 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 12, combined with any correction reported on Form 941-X, line 23) for the quarter, less any previous abatements and interest-free tax assessments.

Payment methods.

You may pay the amount you owe on line 27 electronically using the Electronic Federal Tax Payment System (EFTPS), by credit or debit card, or by a check or money order.

  • The preferred method of payment is EFTPS. For more information, go to EFTPS.gov, or call EFTPS Customer Service at 800-555-4477 or 800-733-4829 (TDD) toll free. Additional information about EFTPS is also available in Pub. 966.

  • To pay by credit or debit card, go to IRS.gov/PayByCard. Your payment will be processed by a payment processor who will charge a processing fee.

  • If you pay by check or money order, make it payable to "United States Treasury." On your check or money order, be sure to write your EIN, "Form 941-X," the calendar quarter you corrected (for example, "Quarter 2"), and the calendar year of the quarter you corrected.

You don’t have to pay if the amount you owe is less than $1.

Previously assessed FTD penalty.

If line 27 reflects overreported tax and the IRS previously assessed an FTD penalty, you may be able to reduce the penalty. For more information, see the Instructions for Schedule B (Form 941).

Lines 28–34

For lines 28–34, you will only enter amounts in columns 1, 2, and 3. These lines don’t have an entry space for column 4 because these adjustments don’t directly result in an increase or decrease to your tax. The amounts entered on lines 28–34 are amounts that you use on Worksheet 1 to figure the credit for qualified sick and family leave wages and the employee retention credit. If you reported an incorrect amount on lines 19–25 on your original Form 941, then you will use lines 28–34 of Form 941‐X to report the correction. Use Worksheet 1 to refigure the credit for qualified sick and family leave wages and/or the employee retention credit based on the corrected amounts reported in column 1.

28. Qualified Health Plan Expenses Allocable to Qualified Sick Leave Wages

If you’re correcting the qualified health plan expenses allocable to qualified sick leave wages that you reported on Form 941, line 19, 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. Enter the corrected amount from column 1 on Worksheet 1, Step 2, line 2b.

29. Qualified Health Plan Expenses Allocable to Qualified Family Leave Wages

If you’re correcting the qualified health plan expenses allocable to qualified family leave wages that you reported on Form 941, line 20, 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. Enter the corrected amount from column 1 on Worksheet 1, Step 2, line 2f.

30. Qualified Wages for the Employee Retention Credit

If you’re correcting the qualified wages for the employee retention credit that you reported on Form 941, line 21, 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. Enter the corrected amount from column 1 on Worksheet 1, Step 3, line 3a.

31. Qualified Health Plan Expenses Allocable to Wages Reported on Form 941, Line 21

If you’re correcting the qualified health plan expenses allocable to wages reported on Form 941, line 21, that you reported on Form 941, line 22, 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. Enter the corrected amount from column 1 on Worksheet 1, Step 3, line 3b.

32. Credit From Form 5884‐C, Line 11, for This Quarter

If you’re correcting the credit from Form 5884‐C, line 11, for this quarter, that you reported on Form 941, line 23, 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. Enter the corrected amount from column 1 on Worksheet 1, Step 1, line 1j. Entering an amount here is strictly for purposes of figuring the credit for qualified sick and family wages and/or the employee retention credit on Worksheet 1. Reporting a correction on this line doesn't correct the credit claimed on Form 5884-C.

33. Qualified Wages Paid March 13 Through March 31, 2020, for the Employee Retention Credit (Use This Line Only To Correct the Second Quarter 2020 Filing of Form 941)

If you’re correcting the qualified wages paid March 13, 2020, through March 31, 2020, for the employee retention credit that you reported on Form 941, line 24, 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. Enter the corrected amount from column 1 on Worksheet 1, Step 3, line 3c.

34. Qualified Health Plan Expenses Allocable to Wages Reported on Form 941, Line 24 (Use This Line Only To Correct the Second Quarter 2020 Filing of Form 941)

If you’re correcting the qualified health plan expenses allocable to wages reported on Form 941, line 24, that you reported on Form 941, line 25, 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. Enter the corrected amount from column 1 on Worksheet 1, Step 3, line 3d.

Part 4: Explain Your Corrections for This Quarter

35. Correction of Both Underreported and Overreported Amounts

Check the box on line 35 if any corrections you entered on lines 7–26, or lines 28–34, column 3, reflect both underreported and overreported amounts.

Example.

If you had an increase to social security wages of $15,000 for Xavier Black and a decrease to social security wages of $5,000 for Sophie Rose, you would enter $10,000 on line 8, column 3. That $10,000 represents the net change from corrections.

On line 37, you must explain the reason for both the $15,000 increase and the $5,000 decrease.

36. Did You Reclassify Any Workers?

Check the box on line 36 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 37, give us a detailed reason why any worker was reclassified and, if you used section 3509 rates on lines 19–22, for any worker reclassified as an employee, explain why section 3509 rates apply and what rates you used.

Return not filed because you didn’t treat any workers as employees.

If you didn’t 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’re entitled to use section 3509 rates, complete the following steps.

  • Write "Misclassified Employees" in bold letters across the top margin of page 1.

  • Enter a zero on line 12.

  • 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 19–22, column 1.

  • Enter zeros on lines 19–22, column 2.

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

  • Provide a detailed statement on line 37.

  • Complete the signature area.

.This is an Image: caution.gifIf you can’t 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 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 37..

37. Explain Your Corrections

Treasury regulations require you to explain in detail the grounds and facts relied upon to support each correction. On line 37, describe in detail each correction you entered in column 4 on lines 7–22, and lines 24–26. Also use line 37 to describe corrections made on line 6 and lines 28–34. If you need more space, attach additional sheets, but be sure to write your name, EIN, "Form 941-X," the quarter you’re correcting (for example, "Quarter 2"), and the calendar year of the quarter you’re correcting 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" or "taxes were not withheld" 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.

  • Form 941-X line number(s) affected.

  • Date you discovered the error.

  • Difference (amount of the error).

  • Cause of the error.

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 12 was discovered on May 15, 2020, 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 19–22, explain why the correction was necessary and attach any notice you received from the IRS.

Part 5: Sign Here

You must complete all four pages of Form 941-X and sign it on page 4. If you don’t sign, processing of Form 941-X will be delayed.

Who must sign the Form 941-X?

The following persons are authorized to sign the return for each type of business entity.

  • Sole proprietorship—The individual who owns the business.

  • Corporation (including a limited liability company (LLC) treated as a corporation)—The president, vice president, or other principal officer duly authorized to sign.

  • Partnership (including an LLC treated as a partnership) or unincorporated organization—A responsible and duly authorized member, partner, or officer having knowledge of its affairs.

  • Single-member LLC treated as a disregarded entity for federal income tax purposes—The owner of the LLC or a principal officer duly authorized to sign.

  • Trust or estate—The fiduciary.

Form 941-X may also be signed by a duly authorized agent of the taxpayer if a valid power of attorney has been filed.

Alternative signature method.

Corporate officers or duly authorized agents may sign Form 941-X by rubber stamp, mechanical device, or computer software program. For details and required documentation, see Rev. Proc. 2005-39. You can find Rev. Proc. 2005-39, 2005-28 I.R.B. 82, at IRS.gov/irb/2005-28_IRB#RP-2005-39.

Paid Preparer Use Only

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 isn’t 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’re 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. For more information about applying for a PTIN online, visit the IRS website at IRS.gov/PTIN. You can’t use your PTIN in place of the EIN of the tax preparation firm.

Generally, you’re not required to complete this section if you’re filing the return as a reporting agent and have a valid Form 8655 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.

Worksheet 1. Adjusted Credit for Qualified Sick and Family Leave Wages and the Employee Retention Credit

You must use this worksheet if you claimed the credit for qualified sick and family leave wages and/or the employee retention credit on your original Form 941 for the quarter and you correct any amounts used to figure these credits on Form 941-X. You will also use this worksheet to figure these credits if you’re claiming them for the first time on Form 941-X.
Step 1. Determine the corrected employer share of social security tax this quarter after it is reduced by any credit claimed on Form 8974 and any credit from Form 5884-C
1a Enter the amount of social security wages from Form 941, line 5a, column 1, or, if corrected, enter the amount from Form 941-X, line 8, column 1 1a _____
1b Enter the amount of social security tips from Form 941, line 5b, column 1, or, if corrected, from Form 941-X, line 11, column 1 1b _____
1c Add lines 1a and 1b 1c _____
1d Multiply line 1c by 6.2% (0.062) 1d _____
1e If you're a third-party payer of sick pay that isn't an agent and you're claiming credits for amounts paid to your employees, enter the employer share of social security tax required to be paid by the employer that you included on Form 941, Part 1, line 8, or, if corrected, the amount of employer social security tax on sick pay that you included on Form 941-X, line 15, column 1 (enter as a negative number) 1e _____
1f Employer share of social security tax included on Form 941-X, line 20, column 4 1f _____
1g If you received a Section 3121(q) Notice and Demand during the quarter, enter the amount of the employer share of social security tax from the notice 1g _____
1h Employer share of social security tax. Combine lines 1d, 1e, 1f, and 1g 1h _____
1i Enter the amount from Form 941, Part 1, line 11a, or, if corrected, the amount from Form 941-X, line 16, column 1 (credit from Form 8974) 1i _____
1j Enter the amount from Form 941, Part 3, line 23, or, if corrected, the amount from Form 941-X, line 32, column 1 (credit from Form 5884-C) 1j _____
1k Total nonrefundable credits already used against the employer share of social security tax. Add lines 1i and 1j 1k _____
1l Employer share of social security tax remaining. Subtract line 1k from line 1h 1l _____
Step 2. Figure the sick and family leave credit
2a Qualified sick leave wages reported on Form 941, Part 1, line 5a(i), column 1, or, if corrected, the amount from Form 941-X, line 9, column 1 2a _____
2a(i) Qualified sick leave wages included on Form 941, Part 1, line 5c, or, if corrected, Form 941-X, line 12, column 1, but not included on Form 941, Part 1, line 5a(i), column 1, or Form 941-X, line 9, column 1, because the wages reported on that line were limited by the social security wage base 2a(i) _____
2a(ii) Total qualified sick leave wages. Add lines 2a and 2a(i) 2a(ii) _____
2b Qualified health plan expenses allocable to qualified sick leave wages (Form 941, Part 3, line 19, or, if corrected, Form 941-X, line 28, column 1) 2b _____
2c Employer share of Medicare tax on qualified sick leave wages. Multiply line 2a(ii) by 1.45% (0.0145) 2c _____
2d Credit for qualified sick leave wages. Add lines 2a(ii), 2b, and 2c 2d _____
2e Qualified family leave wages reported on Form 941, Part 1, line 5a(ii), column 1, or, if corrected, the amount from Form 941-X, line 10, column 1 2e _____
2e(i) Qualified family leave wages included on Form 941, Part 1, line 5c, or, if corrected, Form 941-X, line 12, column 1, but not included on Form 941, Part 1, line 5a(ii), column 1, or Form 941-X, line 10, column 1, because the wages reported on that line were limited by the social security wage base 2e(i) _____
2e(ii) Total qualified family leave wages. Add lines 2e and 2e(i) 2e(ii) _____
2f Qualified health plan expenses allocable to qualified family leave wages (Form 941, Part 3, line 20, or, if corrected, Form 941-X, line 29, column 1) 2f _____
2g Employer share of Medicare tax on qualified family leave wages. Multiply line 2e(ii) by 1.45% (0.0145) 2g _____
2h Credit for qualified family leave wages. Add lines 2e(ii), 2f, and 2g 2h _____
2i Credit for qualified sick and family leave wages. Add lines 2d and 2h 2i _____
2j Nonrefundable portion of credit for qualified sick and family leave wages. Enter the smaller of line 1l or line 2i. Enter this amount on Form 941-X, line 17, column 1 2j
2k Refundable portion of credit for qualified sick and family leave wages. Subtract line 2j from line 2i and enter this amount on Form 941-X, line 25, column 1 2k
Worksheet 1 continues on the next page.

Worksheet 1. Adjusted Credit for Qualified Sick and Family Leave Wages and the Employee Retention Credit—(continued)

Step 3. Figure the employee retention credit
3a Qualified wages (excluding qualified health plan expenses) for the employee retention credit (Form 941, Part 3, line 21, or, if corrected, Form 941-X, line 30, column 1) 3a _____
3b Qualified health plan expenses allocable to qualified wages for the employee retention credit (Form 941, Part 3, line 22, or, if corrected, Form 941-X, line 31, column 1) 3b _____
3c Qualified wages (excluding qualified health plan expenses) paid March 13, 2020, through March 31, 2020, for the employee retention credit (Form 941, Part 3, line 24, or, if corrected, Form 941-X, line 33, column 1). Enter an amount here only for the second quarter Form 941-X 3c _____ Caution:
Only complete lines 3c and 3d for your second quarter 2020 Form 941-X.
3d Qualified health plan expenses allocable to qualified wages paid March 13, 2020, through March 31, 2020, for the employee retention credit (Form 941, Part 3, line 25, or, if corrected, Form 941-X, line 34, column 1). Enter an amount here only for the second quarter Form 941-X 3d _____
3e Add lines 3a, 3b, 3c, and 3d 3e _____
3f Retention credit. Multiply line 3e by 50% (0.50) 3f _____
3g Enter the amount of the employer share of social security tax from Step 1, line 1l 3g _____
3h Enter the amount of the nonrefundable portion of the credit for qualified sick and family leave wages from Step 2, line 2j 3h _____
3i Subtract line 3h from line 3g 3i _____
3j Nonrefundable portion of employee retention credit. Enter the smaller of line 3f or line 3i. Enter this amount on Form 941-X, line 18, column 1 3j
3k Refundable portion of employee retention credit. Subtract line 3j from line 3f and enter this amount on Form 941-X, line 26, column 1 3k

How Can You Get Forms, Instructions, and Publications From the IRS?

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Instructions for Form 941-X - Notices

Paperwork Reduction Act Notice.

We ask for the information on Form 941-X to carry out the Internal Revenue laws of the United States. We need it to figure and collect the right amount of tax. Subtitle C, Employment Taxes, of the Internal Revenue Code imposes employment taxes, including federal income tax withholding, on wages. This form is used to determine the amount of taxes that you owe. Section 6011 requires you to provide the requested information if the tax is applicable to you.

You’re not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books and records relating to a form or instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law.

The time needed to complete and file Form 941-X will vary depending on individual circumstances. The estimated average time is:

Recordkeeping 28 hr., 27 min.
Learning about the law or the form 35 min.
Preparing and sending the form to the IRS 1 hr., 5 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making Form 941-X simpler, we would be happy to hear from you. You can send us comments from IRS.gov/FormComments. Or you can send your comments to: Internal Revenue Service, Tax Forms and Publications Division, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224. Don’t send Form 941-X to this address. Instead, see Where Should You File Form 941-X, earlier.