The IRS Form 941 E-filing Deadline for Q3 is
November 1, 2021

Form 941 Changes 2021:
Quarter 2 Vs Quarter 1

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Understanding the IRS Form 941 Changes 2021: Quarter 2 vs Quarter 1

Updated on June 18, 2021 - 10:30 AM by Admin, TaxBandits

The Form 941 for Quarter 2 2021 has been adjusted to reflect changes to existing COVID-19 tax credits under the American Rescue Plan. In addition to claiming credits for sick and family leave wages and the employee retention credit, employers can also claim the COBRA premium assistance credit.

For a quick filing it is important to know the Form 941 Quarter 1 vs Quarter 2 changes for 2021.

The topic covered in this article are as follows:

1. What are the part 1 changes in Form 941 Quarter 2 vs
Quarter 1 of 2021?

Numerous lines of the Form 941 have been affected, either updated, edited, or added. In the following lines you are able to see a line by line comparison of what employers were required to report in the first quarter of 2021 and what employers will now be reporting for the second quarter.

Line 5a, 5a(i) and 5a(ii)

As you can see, these lines look almost exactly the same between the first and second quarter of 2021. However, the asterisk seen on Form 941 for the second quarter creates an important distinction. For the second quarter, the values on lines 5a(i) and 5a(ii) should reflect only the qualified wages paid after March 31, 2021 for leave taken before April 1, 2021. The value entered on Line 5a should reflect the qualified wages for leave taken after March 31, 2021.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
  • Line 5a: Taxable social security wages*
  • Line 5a(i): Qualified sick leave wages*
  • Line 5a(ii) Qualified family leave wages*
  • Line 5a: Taxable social security wages
  • Line 5a(i): Qualified sick leave wages
  • Line 5a(ii) Qualified family leave wages

Line 11b

A similar distinction is made in line 11b. Instead of entering the nonrefundable portion of credit of qualified sick and family leave wages from the entire second quarter, employers should enter the non refundable portion of sick and family leave wages for leave taken before April 1, 2021.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Nonrefundable portion of credit for qualified sick and family leave wages for leave taken
before April 1, 2021.
Nonrefundable portion of credit for qualified sick and family leave wages from Worksheet 1.

Line 11d

Before employers can enter the total nonrefundable credits like they did for the first quarter of 2021, they must enter the non refundable portion of credits for sick and family leave wages on leave taken after April 1, 2021.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Nonrefundable portion of credit for qualified sick and family leave wages for leave taken
after March 31, 2021.
Total nonrefundable credits. Add lines
11a, 11b, and 11c.

Line 11e

Line 11e is a new addition to the Form 941. This line is used to report the amount that the employer paid out in COBRA premium assistance. This amount can be calculated for the second quarter of 2021 using Worksheet 5.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Nonrefundable portion of COBRA premium assistance credit (see instructions
for applicable quarters.
This line is not on Form 941 for the first quarter of 2021, it is new.

Line 11f

Line 11f is another new addition to the Form 941 for the second quarter of 2021. On this line, employers should report the number of individuals that they provided COBRA premium assistance to.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Number of individuals provided COBRA
premium assistance.
This line is not on Form 941 for the first quarter of 2021, it is new.

Line 11g

Because of the need to report nonrefundable sick and family credits before and after April 1, 2021 separately, and the new COBRA premium assistance credit, this total is now reported on line 11g for the second quarter of 2021.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Total nonrefundable credits. Add lines 11a, 11b, 11c, 11d, and 11e. This line is not on Form 941 for the first quarter of 2021, it is new.

Line 13c

Much like with nonrefundable credits, refundable portions credits for sick and family leave wages will be calculated separately for leave taken before April 1, 2021. This amount can be figured by completing Step 2, line 2k of Worksheet 2.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Refundable portion of credit for qualified sick and family leave wages for leave taken before April 1. Refundable portion of credit for qualified sick and family leave wages from Worksheet 1.

Line 13e

Before employers can enter the total nonrefundable credits like they did for the first quarter of 2021, they must enter the refundable portion of credits for sick and family leave wages on leave taken
after April 1, 2021.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Refundable Portion of Credit for Qualified Sick and Family Leave Wages for Leave Taken After
March 31, 2021.
Total deposits and refundable credits. Add lines 13a, 13c, and 13d.

Line 13f

Before reporting any advances received from filing Form 7200, employers must first report the refundable portion of the new COBRA premium assistance credit. This can also be calculated using the Worksheet 5. Employers can still report advances from the 7200 on the 941, but now it is further down on the form.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Refundable portion of COBRA premium assistance credit (see instructions for applicable quarters). Total advances received from filing Form(s) 7200 for the quarter.

Line 13g

For the second quarter of 2021, there are more amounts on lines 13 to add before subtracting advances. This will be calculated on a later line of the Form 941.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Total deposits and refundable credits. Add lines 13a, 13c, 13d, 13e, and 13f. Total deposits and refundable credits less advances. Subtract line 13f from line 13e.

Line 13h

This line has been moved further down the 941 Form, employers are still able to request advance for the second quarter of 2021.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Total advances received from filing Form(s) 7200 for the quarter. There is no line 13h on Form 941 for the first quarter of 2021, it has been added.

Line 13i

This value is not calculated on line 13f like in previous quarters, it is now line 13i, you will also calculate this value differently for the second quarter of 2021.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Total deposits and refundable credits less advances. Subtract line 13h from line 13g. There is no line 13i on Form 941 for the first quarter of 2021, it has been added.

Line 14

This line has only been adjusted for the second quarter of 2021, instead of subtracting 13g from line 12, employers should subtract 13i.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Balance due. If line 12 is more than line 13i, enter the difference and see instructions. Balance due. If line 12 is more than line 13g, enter the difference and see instructions.

Line 15

This line has also been adjusted for the second quarter of 2021. Again, employers should use line 13i instead of 13g. If the amount on line 13i is greater than line 12, indicate whether you would prefer that overpayment to be applied to the next return or if you would prefer a refund.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Overpayment. If line 13i is more than line 12, enter the difference. Overpayment. If line 13g is more than line 12, enter the difference.

2. 2021 Form 941 Quarter 2 vs Quarter 1 changes in Part 3

In part 3 of the Form 941 for the second quarter, there are many lines that have been added and some lines that have previously been marked, “reserved for future use” now have a purpose. This section has been expanded to 28 lines from 23.

Line 18b

Line 18b is new to the Form 941 for the second quarter of 2021. The box should be checked if the business is a recovery startup.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
If you’re eligible for the employee retention credit solely because your business is a
recovery startup business.
This line is not on Form 941 for the first quarter of 2021, it is new.

Line 19

On Line 19, employers should report qualified sick leave wages for leave taken before
April 1, 2021.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Qualified health plan expenses allocable to qualified sick leave wages for leave taken before April 1, 2021. Qualified health plan expenses allocable to qualified sick leave wages.

Line 20

On Line 20, employers should report qualified family leave wages for leave taken before April 1, 2021.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Qualified health plan expenses allocable to qualified family leave wages for leave taken before April 1, 2021. Qualified health plan expenses allocable to qualified family leave wages.

Line 23

This line has been added to Form 941 for the second quarter, employers will now need to enter qualified sick leave wages taken after March 31, 2021.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Qualified sick leave wages for leave taken after March 31, 2021. Credit from Form 5884-C, line 11, for this quarter.

Line 24

Line 24 has been “reserved for future use” in previous quarters, it is now being used to report the expenses that can be allocated to the amount on line 23.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Qualified health plan expenses allocable to qualified sick leave wages reported on line 23. Reserved for future use.

Line 25

Line 25 has been “reserved for future use” in previous quarters, it is now being used to report collective bargaining agreements.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Amounts under certain collectively bargained agreements allocable to qualified sick leave wages reported on line 23. Reserved for future use.

Line 26

This is a new line, employers will need to report qualified family leave wages taken after March 31, 2021 on line 26.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Qualified family leave wages for leave taken after March 31, 2021. This line is not on Form 941 for the first quarter of 2021, it is new.

Line 27

Line 26 has been added to report any expenses that can be allocated to qualified family leave wages.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Qualified health plan expenses allocable to qualified family leave wages reported on line 26. This line is not on Form 941 for the first quarter of 2021, it is new.

Line 28

Line 28 has been added to the Form 941 for the second quarter to report collective bargaining agreements related to the amount on line 26.

Form 941 Quarter 2 2021 Form 941 Quarter 1 2021
Amounts under certain collectively bargained agreements allocable to qualified family leave wages reported on line 26. This line is not on Form 941 for the first quarter of 2021, it is new.

3. Other parts in the Form 941 Quarter 2 2021

In addition to the many lines of Form 941 that have been added and edited, the IRS has also added several additional revised worksheets for 2021 to help employers calculate the nonrefundable and refundable portions of their tax credits. These can be found in the IRS instructions.

Learn more about the Form 941 Worksheet for Q2 2021.

4. How to file Form 941 for Q2 2021?

If you’re still paper filing your Forms 941, this is a great quarter to consider changing your filing method! When you e-file Form 941, it is overall a faster, easier, and more accurate process. The IRS will receive your form sooner, process it faster, and provide updates much sooner than if you were to paper file. The deadline for filing Form 941 for second quarter 2021 is August 2, 2021.

E-filing Form 941 with TaxBandits is simple and secure. Just follow these simple steps:

  • Sign in to create a free TaxBandits account!

  • Choose Form 941 for quarter 2 of 2021

  • Enter your basic business info

  • Enter the form details

  • Review your form and pay your filing fee

  • Transmit your Form 941 to the IRS

The IRS releases the final version of Q2 941 Form and you can start filing with TaxBandits. We also provide 94x online signature PIN, Worksheet calculations for an easy filing.

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