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New Changes in Form 941 for the 2023 Tax Year

Updated on March 17, 2023 - 10:30 AM by Admin, Tax bandits

The IRS has released updates to Form 941 for the first quarter of 2023. There are a few changes to the form that employers should be aware of before filing for the first quarter of 2023. The most notable changes can be found on Form 8974, which is used to claim a payroll credit for increasing research activities, and the addition of Form 941 Worksheet 2.

This article contains detailed information about the Form 941 changes for the first quarter of 2023.

1. What are the New changes to Form 941 for 2023?

There are a few minor changes to Q1 Form 941 for 2023. The instructions for Line 1 have changed slightly to include the pay period (March 12) for the first quarter.

  • The IRS has introduced a second worksheet for Form 941.
  • There is also a small update to the instruction box for Line 5. The instructions now refer to the quarter of “2023” instead of “2022”.
  • The social security wage base limit for the 2023 tax year is now $160,200. It is also important to note that Forms 941-PR and 941-SS will be discontinued after the 2023 tax year.
  • The most notable changes this quarter can be found on Form 8974, Qualified Small Business Payroll Tax Credit for Increasing Research Activities. This form is used by small businesses to claim a tax credit of up to $250,000.
    • For tax years beginning after December 31, 2022, the Inflation Reduction Act of 2022 increases this amount up to $500,000. Beginning in 2023, the credit will first reduce the employer’s share of social security up to $250,000 per quarter, and any remaining credit will be applied to the Medicare tax.
    • To reflect this, Line 12 of Form 8974 has been updated. In previous quarters it has been "Credit”, it is now ‘Credit against the employer share of social security tax’.
  • Additionally, Lines 13 -17 have been introduced to the form for the first quarter of 2023 and beyond.
Form 8974

2. Have the New Form 941 Worksheet fields been revised for Q1, 2023?

There is only one update to Form 941 Worksheet 1 for 2023. The first step on this worksheet is now, “Determine the employer share of social security tax this quarter after it is reduced by any credit claimed on Form 8974 and any credit to be claimed on Form 5884-C and/or Form 5884-D”.

  • Line 1i - Enter the amount from Form 941, Part 1, line 11a (credit from Form 8974)
Form 941 Worksheet

The IRS has reintroduced Worksheet 2 for the first quarter of 2023. There are two new lines:

  • Line 1g - Enter the amount from Form 8974, line 16 for this quarter
  • Line 1h - Employer share of Medicare tax remaining. Subtract line 1g from line 1f.
Form 941 Worksheet

3. When is the Form 941 due for the 2023 tax year?

Form 941 has a quarterly deadline. The reporting periods and correlating deadlines are listed in the table below:

Reporting Period Due Dates
Jan, Feb, and Mar May 01, 2023
Apr, May, and Jun July 31, 2023
Jul, Aug, and Sep October 31, 2023
Oct, Nov, and Dec January 31, 2024
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