Complete Form 941-X for 2023

1. What is Form 941-X?

Form 941-X (Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund Form) is used to correct any errors made on Form 941. If you find an error on a previously filed Form 941, you must correct this error using Form 941-X.

Note: Be sure to file a separate Form 941-X for each tax period for which there was an error.

Criteria for Filing Form 941-X

The following information is required when filing Form 941-X:

• Underreported taxes - reporting less income or revenue than was actually received
• Overreported taxes - reporting more income or revenue than was actually received

If you are filing Form 941-x for underreported taxes, you must make a tax payment when you file the Form. When reporting overreported taxes, you can claim either a refund or an abatement for your next return.

2. When is Form 941-X Required?

You will need to file Form 941-X if you discover an error on a previously filed IRS Form 941. 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
• Qualified small business payroll tax credit for increasing research activities

You do not need to file a 941-X Form if your errors relate to the number of employees who received wages or Part 2 of Form 941.

Do I need to report 941 Schedule B errors on Form 941-X?

No. You can report errors on Form 941 related to the number of employees who received wages or the federal tax liabilities reported on Form 941. Don’t file Form 941-X for corrections on the Schedule B (Form 941), Report of Tax Liability for Semiweekly Schedule Depositors.

3. What are the changes to the Form 941-X for 2022

Completing a correction Form 941-X consists of 5 parts. You should use Form 941-X to correct any errors on a previously filed Form 941 or Form 941-SS. You will need to use a separate Form 941-X for each quarter that requires corrections.

Part 1 - Selecting Adjusted employment tax return or a Claim

• Check the box on line 1 if you are correcting the underreported tax amounts or overreported tax amounts and would like to use the adjustment process to correct the errors.
• Check the box on line 2 if you overreported tax amounts only and would like to use it for the claim process.

Part 2 - Completing the Certifications

• If the corrections are related to underreported tax amounts, line 3 must be checked.
• Line 4 and 5 certifications are related to the repay or reimbursement and require consent from your employees to file a claim on their behalf.

Part 3 - Enter the Corrections for the Quarter

• Part 3 of Form 941-X has lines from 6 to 40, where the corrections related to the wages, federal income tax withheld, social security, sick & family leave wages, COBRA credit, employee retention credit are reported.

Part 4 - Explain the Corrections

• If any corrections that are entered on lines 7–26c, or lines 28–31a, or lines 32–40, column 3, contain both underreported and overreported amounts then the box on line 41 must be checked.
• If you reclassified any workers to be independent contractors or nonemployees, then check the box on line 42.
• On line 43, a detailed explanation must be given on how you determined your corrections.

Part 5 - Signing Information

• The signing must be completed to avoid delay in the process.
• The following persons are authorized to sign the return: Sole proprietorship, Corporation, Partnership, Single-member LLC treated as a disregarded entity, Trust or estate.

Need to correct your previously filed 941 Forms?

4. Errors that can be Corrected By Filing Form 941-X

• Underreported amounts ONLY
• Overreported amounts ONLY
• Both underreported and overreported amounts

5. Deadline to File Form 941-X

There is no specific deadline for filing Form 941-X. You must file this form when you find any errors in your previously submitted Form 941. However, a time frame is applicable to report overreported and underreported taxes.

The IRS calls this time frame a “period of limitations.” For the purpose of the period of limitations, 941 Forms for a calendar year are considered filed on April 15 of the succeeding year, even if they were filed before that date.

For overreported taxes, you should file Form 941-X within 3 years of the date that the original Form 941 was filed or 2 years from the date you paid the tax reported on Form 941.

For underreported taxes, you should file Form 941-X within 3 years of the date that the original Form 941 was filed.

6. Are there any penalties for underreporting taxes?

Typically, correcting an underreported amount will not subject you to penalties or interest if you follow these guidelines:

• File on time
• Pay the amount shown on Line 20 at the time you file the 941-X Form
• Enter the date you discovered the error
• Explain your corrections in detail

You will have to pay interest if:

• The underreported taxes are related to an issue raised in an examination of a prior period
• You knowingly underreported taxes
• You received a notice and demand for payment
• You received a Notice of Determination of Worker Classification

Note: If you receive this notice after filing your 941-X Form, reply with an explanation.

7. Where to mail Form 941-X?

The mailing address to which you should send your Form 941-X depends on your location.

8. How to Complete Form 941-X with TaxBandits?

Just follow the simple steps to complete and file your form 941-X for free* to the IRS. Choose the right authorized e-file provider from the IRS and easily complete the form.

• Choose Quarter
• Enter the Form 941-X Details
• Review the Form 941-X Summary
• Download and Send it to the IRS

*For Form 941 originally filed with TaxBandits, otherwise it is $1.49.