On September 11, 2010, the IRS issued a revised Form 941-X, known as the Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund. The revisions are needed to enable an employer to claim a credit for the HIRE Act payroll tax exemption that was not claimed by the employer on qualified wages paid to qualified employees during a prior quarter or to make other adjustments to the payroll tax reported on such wages.
Form 941-X is revised by adding the following new lines:
- Line 11a. Number of qualified employees first paid exempt wages/tips this quarter (from line 6a of Form 941 or Form 941-SS).
- Line 11b. Number of qualified employees paid exempt wages/tips this quarter (from line 6b of Form 941 or Form 941-SS).
- Line 11c. Exempt wages/tips paid to qualified employees this quarter (from line 6c of Form 941 or Form 941-SS).
- Line 18c. Number of qualified employees paid exempt wages/tips March 19-31 (from line 12c of Form 941 or Form 941-SS).
- Line 18d. Exempt wages/tips paid to qualified employees March 19-31 (from line 12d of Form 941 or Form 941-SS).
An employer may need to file a Form 941-X, if it receives a signed affidavit from an employee (e.g., Form W-11) certifying that he or she is a qualified employee after the employer has begun paying wages to the employee. Under IRS guidance, an employer must have a signed affidavit from an employee by the time the employer files the Form 941 on which it reports the wages paid to the qualifying employee for the quarter. If the employer does not have the signed affidavit at that time, it cannot claim the HIRE Act payroll tax exemption, and must pay the normal payroll taxes.
Form 941 Due Dates
- First Quarter – April 30
- Second Quarter – July 31
- Third Quarter – October 31
- Fourth Quarter – January 31
If the employer receives the signed affidavit after the Form 941 is filed for the quarter, the employer can claim the payroll tax exemption as an overpayment of tax on a subsequently filed Form 941. The overpayment of tax is included on line 11 of the Form 941 for the quarter with which the Form 941-X is filed. The adjustment for the overpayment is reflected on line 11c of the revised Form 941-X.
A special rule applies to wages paid to qualified employees from March 19, 2010, through March 31, 2010. The payroll tax must be reported for these wages on the Form 941 for the first quarter. The employer claims a credit for the amount of the payroll tax exemption applicable to these wages on line 12(e) of the 2010 second quarter Form 941. If the employer did not claim a credit for the amount of payroll tax exemption applicable to these wages on the 2010 second quarter Form 941, the credit on these wages is reflected on line 18d of the revised Form 941-X, and included as an overpayment of tax on line 11 of Form 941 for the quarter with which the Form 941-X is filed.
Prior HIRE Act Articles
- HIRE Act Provides Tax Breaks for Hiring Unemployed Workers
- IRS Issues Draft Form to Certify Qualified Employees Under HIRE Act
- IRS to Issue Hire Act Final Form W-11 Week of April 5
- IRS Issues HIRE Act Final Form W-11 and New Q&As
- IRS Issues Revised Forms W-2 and W-3 for HIRE Act Changes
- IRS Issues Additional FAQs for HIRE Act
- IRS Notes Errors on Payroll Tax Returns Seeking HIRE Act Benefits.
- IRS Issues HIRE Act Guidance on Self-Employed Individuals and More