The IRS on Tuesday launched a draft revised 2021 version of Sort 941, Employer’s Quarterly Federal Tax Return, reflecting even further new and up to date payroll tax credits.
The recent formal model was produced considerably less than three months before on March 9, and the impending additional adjustments mirror Congress’s multiple provisions of temporary payroll tax aid to aid businesses’ operations through the lingering outcomes of the COVID-19 pandemic.
The type accompanies employers’ quarterly remittances of employees’ federal revenue tax, Social Stability tax, and Medicare tax withheld from employees’ wages, alongside with employers’ legal responsibility for their share of Social Stability and Medicare taxes due on those wages. The Sort 941 for the present-day calendar quarter (ending June 30) is because of July 31.
The hottest draft revisions primarily incorporate provisions of the American Rescue Program Act (ARPA), P.L. 117-2, enacted March 11. For instance, ARPA delivered a momentary 100% subsidy for premiums for COBRA continuation protection, to be paid by employers or other taxpayers to whom qualified persons would if not spend the rates. That aid is in flip reimbursable by a refundable credit rating versus the employer’s part of Medicare tax. The draft Type 941 accordingly includes new traces for businesses to enter nonrefundable and refundable portions of the COBRA quality aid credit rating (strains 11e and 13f, respectively), as properly as the amount of people provided COBRA top quality help (line 11f).
Some current traces are revised with cutoff dates to demarcate pre- and put up-ARPA alterations in credits for competent unwell and loved ones depart wages, and competent wellness program bills allocable to these wages, originally enacted by the Families Initial Coronavirus Response Act (FFCRA), P.L. 116-127, and prolonged, with modifications, by ARPA via Sept. 30, 2021.
A new checkbox is obtainable (line 18b) for an employer qualified for the worker retention credit score exclusively mainly because it is a “recovery startup business.” Section 9651 of ARPA extra this provision as Sec. 3134(b)(1)(B), for specific smaller sized companies that commenced functions after Feb. 15, 2020, that partly or completely shut down owing to a sizeable decrease in gross receipts or since of a governmental order.
To remark on the draft revisions, check out irs.gov/formscomments.
— Paul Bonner ([email protected]) is a JofA senior editor.