Yes, indeed! The 2021 941 Enhanced Tax Reporting update is now available.
But before installing the update, let us know a brief of The 941 Form and why is it required to update the same.
Form 941 is used by Companies to-
- File Income Tax, Social Security Tax, or Medicare tax withheld from employee’s salary.
- Pay the employer’s share of social security or Medicare Tax.
Requirements of New Form 941
The new form has three parts, Part1 and Part 3 have all the changes while Part 2 is as it was earlier.
According to new Form 941, in Part 1, you will get to identify the wages paid in the particular quarter as you need to split-out your taxable Social Security wages. Quite like points that if you’ve got ever reported those wages, you wish to enter the taxable wages for FFCRA (Families First Coronavirus Response Act)-sick leaves wages 5(a)(i) and family leave wages on separate terms. Remember the FFCRA wages are exempted from Company’s Social Security Tax.
Regular wages/Overtime: $80,000
FFCRA- Sick wages: $5,000
FFCRA-Leave Wages: $5,000
Total Wages: $100,000
941 Lines reporting 5a Taxable Social Security wages: $90,000
5a(i) Qualified leave of absence wages: $5,000
5a(ii) Qualified family leave wages: $5,000
Lines 11b & 11c – These amounts are handy from Worksheet 1 and can file the number of credits you have got already applied against the EFTPS tax deposit for FFCRA and ERC wages.
Line 13b – This line helps to recognize the IRS the number your company will defer for employer social insurance tax.
Remember, this deferral means you will have to pay this but at a later date. The date for 50% of this deferral is December 31, 2021, and hence the remaining 50% is the due day, 2022.
Lines 13c & 13d – These amounts will come from Worksheet 1 and can report the quantity you’re requesting as a refund for the credits for FFCRA and ERC.
Line 13f – This line is to report the dollar amount of advances that your company received from filing form 7200 for the quarter.
For Part 3, the updates during this section come from lines 19-25. This a part of the 941 return identifies wages that we are reporting and allocable health care costs that are being applied for FFCRA and ERC. Plus, they’d to work out the way to report items from quarter one for the ERC (only should be used for quarter two).
About your health care costs for reporting purposes, the IRS has a FAQs section on the urge of determining the quantity of allocable qualified health plan expenses.
For Worksheet 1, there are three steps to work out the nonrefundable and refundable credits to use to Form 941. you can locate this worksheet within the Form 941 instructions.
- If you paid qualified leave of absence, family leave, and have qualified wages for the worker retention program, you may fill out all three parts of this worksheet.
- If you merely paid out the FFCRA wages, part 1 and part 2 shall be filled out.
- If you simply have qualifying wages for the ERC, part 1 and part 3 need to be filled out.
Now, when you are aware of the requirements of the New 941 form, let us begin the process electronically-
To install the Mandatory update:
- Select the 2020 941 Form.
- The form will be processed once you click okay.
- If a compulsory update is obtainable, you’ll receive a message with three options-Automatic, Manual, or Continue Expired.
- You will have to select Automatic.
- Accept the automated Update by clicking Next
- Once that’s complete exit the Form and restart the Enhanced Tax reporting to work out new forms.
If the required update has been installed and so earlier year forms are still showing closed out of Enhanced Tax Reporting and return in. If that is still not resolved, uninstall, and install Enhanced Tax Reporting.
Go ahead and update your Enhanced Tax Reporting!
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