IRS Form 941 is Revised to Defer Payroll Tax for 3rd and 4th quarters, 2020

Why E-file 941 with TaxBandits?

Stress-free filing solution and get instant IRS approval.

Top 10 reasons why you should e-file form 941 with TaxBandits

The IRS Released A Draft Form 941 for the 3rd and 4th Quarters

Updated on September 09, 2020 - 10:30 AM by Admin, TaxBandits

Once again, the IRS is planning to revise Form 941. As confirmation, they released a draft on August 28 that contains changes to be implemented for the 3rd and 4th quarters of 2020. Keep in mind that this is not a finalized version of Form 941, and should not be used for filing purposes with the IRS. However, this draft does give us insight into what the final version may look like. It is important that employers wait for the finalized version to be released by the IRS. Once released, employers can begin to file their Form 941, the deadline for filing for the 3rd quarter is November 2, 2020.

In this article, we cover the following topics:

1. Payroll Tax Deferment

In March 2020, the government introduced the Social Security Tax Deferral Program in response to the COVID-19 pandemic. This program allows employers to defer their portion of Social Security taxes during the 2nd quarter of 2020. On August 8, the president passed a new order allowing employers to defer the employee share of withholding and deposits of Social Security taxes as well. This deferment is applicable to qualified wages paid between September 1, 2020 and December 31, 2020.

2. Revisions to Form 941, 2020 - Quarters 3 & 4

In June 2020, the IRS revised Form 941 with 23 new fields to benefit the filers during the pandemic. Those changes are effective from the 2nd quarter of 2020. This August, the IRS has released another draft version of Form 941 with new changes for the 3rd and 4th quarters of 2020. When analyzing the draft, we can see that the changes affect four lines: 1, 13b, 24, and 25.

Below are the changes in the Form 941 draft for the third quarter compared to Form 941 for the second quarter of 2020.

  • Line 1 for the 2nd quarter

    Existing form can be used for the pay period - Quarter 2, Quarter 3, or Quarter 4.

IRS Form 941 Line 1

IRS Form 941 Line 1

  • Line 1 for 3rd and 4th quarter

    In the draft, we can see that line 1 has been adjusted to report the number of employees who received wages for the pay period, Quarter 3 and 4. Simply, this means that this version can only be used for the 3rd and 4th quarters of 2020.

Form 941 Line by Line Instructions

IRS Form 941 Line 1 for quarters 3 and 4

  • Line 13b for the 2nd quarter

    Only the deferred amount of the employer share of social security tax can be reported.

 IRS Form 941 Line 13b

IRS Form 941 Line 13b

  • Line 13b for 3rd and 4th Quarters

    The new line 13b allows employers to enter the deferred amount of employer and employee shares of social security tax.

IRS Form 941 Line 13b for quarters 3 and 4

IRS Form 941 Line 13b for quarters 3 and 4

  • Line 24 for the 2nd quarter

    It is used to report the qualified wages paid between March 12 and March 31, 2020, for the employee retention credit.

IRS Form 941 Line 24

IRS Form 941 Line 24

  • Line 24 for 3rd and 4th Quarters

    Line 24 is now allocated to enter the deferred amount of the employee share of social security tax.

IRS Form 941 Line 24 for quarters 3 and 4

IRS Form 941 Line 24 for quarters 3 and 4

  • Line 25 for the 2nd quarter

    It is used to enter the qualified health plan expenses.

IRS Form 941 Line 25

IRS Form 941 Line 25

  • Line 25 for 3rd and 4th Quarters

    Line 25 is reserved for future use.

IRS Form 941 Line 25 for quarters 3 and 4

IRS Form 941 Line 25 for quarters 3 and 4

Line 25 is still a mystery. The IRS has simply earmarked it for future use.

What are the Changes in IRS Form 941 for 3rd Quarter 2020?

Further Information

The changes that we discussed above are applicable to Form 941-PR and Form 941-SS. The IRS has also released a draft of Form 941-SS that reflects the same set of changes. These changes are expected to be made on Form 941-PR, but the IRS has not released a draft.

We can also expect changes to Form 941 Schedule-R in the near future. As soon as the IRS releases the finalized version of Form 941, it will be available for you in TaxBandits.

If you have any questions regarding Form 941, please visit our FAQs.

Get started with the TaxBandits for stress-free e-filing. The internal error check will help you transmit forms to the IRS without errors. The return status will be sent to your email instantly once the IRS accepts your return.

Why Should I
E-file 941?

  • Get Instant IRS Approval
  • No Paperwork
  • No Print and Postal
  • E-Payment Methods

Access our resource center for more
information about tax relief due to
COVID-19. Visit Now