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Instructions for Form 941-X

Department of the Treasury

Internal Revenue Service

(January 2011)

Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund

•

Section references are to the Internal Revenue Code unless

Taxable social security wages;

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Taxable social security tips;

otherwise noted.

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Taxable Medicare wages and tips;

What’s New

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Advance earned income credit (EIC) payments made to

employees (for quarters ending before January 1, 2011);

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Credits for COBRA premium assistance payments;

Social security tax rate for 2011. The employee social

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Credit for qualified employer’s share of social security tax on

security tax rate is 4.2% and the employer social security tax

wages/tips paid to qualified employees March 19 – 31, 2010

rate is 6.2% (10.4% total). Be sure to use the correct rate when

(second quarter 2010 only); and

correcting amounts reported on lines 8 and 9.

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Exemption for qualified employer’s share of social security

Section 3121(q) Notice and Demand — Tax due on

tax on wages/tips paid to qualified employees (for quarters

unreported tips. A new line has been added to Form 941 for

ending after March 31, 2010, and before January 1, 2011).

reporting social security and Medicare taxes on unreported tips.

An employer now reports the amount of the taxes shown on the

Use Form 843, Claim for Refund and Request for

Section 3121(q) Notice and Demand on line 5e of the

Abatement, to request a refund or abatement of assessed

employer’s Form 941 for the calendar quarter in which notice

interest or penalties. Do not request abatement of assessed

and demand is made. Any errors discovered on previously filed

interest or penalties on Form 941 or Form 941-X.

Forms 941 for these taxes are corrected on line 11 of Form

941-X. In addition, any errors relating to Section 3121(q) Notice

References to Form 941 on Form 941-X and in these

and Demand amounts reported on line 7c of Form 941 (for

instructions also apply to Form 941-SS, Employer’s

TIP

quarters ending before January 1, 2011) should be corrected on

QUARTERLY Federal Tax Return, unless otherwise

line 11 of Form 941-X.

noted. We use the terms “correct” and “corrections” on Form

941-X and in these instructions to include interest-free

Qualified employer’s social security tax exemption expired.

adjustments under sections 6205 and 6413 and claims for

The qualified employer’s exemption for their share (6.2%) of

refund and abatement under sections 6402, 6414, and 6404.

social security tax on wages/tips paid to qualified employees

See Rev. Rul. 2009-39 for examples of how the interest-free

expired on December 31, 2010. Any errors discovered on

adjustment and claim for refund rules apply in 10 different

previously filed Forms 941 (for quarters ending after March 31,

situations. You can find Rev. Rul. 2009-39, 2009-52, I.R.B. 951

2010, and before January 1, 2011) for this exemption are

corrected on lines 12a – 12c of Form 941-X.

Advance payment of earned income credit (EIC). The

When you discover an error on a previously filed Form 941,

option of receiving advance payroll payments of EIC is no

you must:

•

longer available after December 31, 2010. Corrections to

Correct that error using Form 941-X,

•

advance payroll payments of EIC made before December 31,

File a separate Form 941-X for each Form 941 that you are

2010, can be made on line 18.

correcting, and

•

File Form 941-X separately. Do not file Form 941-X with

Reminders

Form 941.

Adjusting COBRA premium assistance payments.

If you did not file a Form 941 for one or more quarters, do

Employers who make COBRA premium assistance payments

not use Form 941-X. Instead, file Form 941 for each of those

for assistance eligible individuals are allowed a credit for the

quarters. See also When Should You File Form 941-X? on

payments on Form 941. Any errors discovered on previously

page 2. However, if you did not file Forms 941 because you

filed Forms 941 for this credit are corrected on Form 941-X.

improperly treated workers as independent contractors or

See COBRA Premium Assistance Payments on page 9.

nonemployees and are now reclassifying them as employees,

Adjusting an aggregate Form 941. Agents must complete

see the instructions for line 23 on page 10.

Schedule R (Form 941), Allocation Schedule for Aggregate

Report the correction of underreported and overreported

Form 941 Filers, when adjusting an aggregate Form 941.

amounts for the same tax period on a single Form 941-X,

Schedule R (Form 941) is completed only for those clients who

unless you are requesting a refund or abatement. If you are

have adjustments reported on Form 941-X. Schedule R (Form

requesting a refund or abatement and are correcting both

941) is filed as an attachment to Form 941-X. Aggregate Forms

underreported and overreported amounts, file one Form 941-X

941 are filed by agents approved by the IRS under section

correcting the underreported amounts only and a second Form

3504. To request approval to act as an agent for an employer,

941-X correcting the overreported amounts.

the agent files Form 2678, Employer/Payer Appointment of

Agent, with the IRS.

You will use the adjustment process if you underreported

employment taxes and are making a payment, or if you

overreported employment taxes and will be applying the credit

General Instructions:

to Form 941 for the period during which you file Form 941-X.

Understanding Form 941-X

However, see the Caution under Is There a Deadline for Filing

Form 941-X? on page 2 if you are correcting overreported

amounts during the last 90 days of a period of limitations. You

What Is the Purpose of Form 941-X?

will use the claim process if you overreported employment

taxes and are requesting a refund or abatement of the

Use Form 941-X to correct errors on a Form 941 that you

overreported amount. Follow the chart on the back of Form

previously filed. Use Form 941-X to correct:

941-X for help in choosing whether to use the adjustment

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Wages, tips, and other compensation;

process or the claim process. Be sure to give us a detailed

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Income tax withheld from wages, tips, and other

explanation on line 24 for each correction that you show on

compensation;

Form 941-X.

Cat. No. 20331U

Instructions For Form 941-X - Adjusted Employer'S Quarterly Federal Tax Return Or Claim For Refund - 2011 Page 2

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