Visible Changes in Form 941 due to CARES, FFCRA and EFMLA

By August 5, 2020September 15th, 2020FMLA, Payroll, Sick Leave, Withholding Taxes

Required filings of IRS Form 941 looked a little bit different for employers this quarter due to changes in Form 941 for COVID-19 related employment tax creds and other tax relief.

IRS Form 941 is the employer’s quarterly payroll tax report. Forms are due on the last day of the month following the end of the quarter meaning that forms submitted on July 31, 2020, were the first to reflect tax changes made as part the CARES Act, FFCRA, EFMLA and other recent legislation.

Of particular interest may be changes made to reflect allowable deductions for sick and family leave:

  • The new credit for qualified sick and family leave wages is reported on line 11b and, if applicable, line 13c.
  • The employee share of social security tax on qualified sick and family leave wages is reported on lines 5a(i) and 5a(ii). (Qualified sick and family leave wages aren’t subject to the employer share of social security tax.)
  • Qualified health plan expenses allocable to qualified sick and family leave wages are reported on lines 19 and 20.

Also, of interest may be changes made to reflect allowable deductions for the employee retention credit:

  • The new employee retention credit is reported on line 11c and, if applicable, line 13d.
  • Qualified wages (excluding qualified health plan expenses) for the employee retention credit are reported on line 21 (these amounts should also be included as wages on lines 5a and 5c, and, if applicable, line 5d).
  • Qualified health plan expenses allocable to the qualified wages for the employee retention credit are reported on line 22.
  • For the second quarter Form 941 only, qualified wages (excluding qualified health plan expenses) for the employee retention credit and qualified health plan expenses allocable to the qualified wages for the period from March 13, 2020, to March 31, 2020, are reported on lines 24 and 25, respectively.