IRS Releases 2021 Form 941, Instructions for Form and Schedules B and R

On March 9, the IRS released the 2021 Form 941, Employer’s Quarterly Federal Tax Return, and its instructions. The IRS also revised the instructions for Form 941, Schedule B and the instructions for Form 941, Schedule R. When the IRS released the instructions, Congress was considering changes to COVID-19 tax relief. When the new legislation changes these instructions, the IRS will post updates here.

Updates to Form 941

The Form 941 instructions have been updated to include extensions of the COVID-19-related tax credits under the Consolidated Appropriations Act, 2021:

• The Families First Coronavirus Response Act (FFCRA) tax credit for emergency paid sick leave wages and expanded family and medical leave wages was extended to qualified leave wages paid for leave taken before April 1, 2021.
• The employee retention credit, established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, was extended to qualified wages paid through June 30, 2021.
•  The instructions also provide guidance on claiming advance tax credits using Form 7200, paying the employer and employee social security tax deferred in 2020, and a new payroll tax credit for tax-exempt organizations affected by qualified disasters.

Paying Deferred Amount of Social Security Tax

The IRS said it will update its Electronic Federal Tax Payment System (EFTPS) to allow employers to pay the deferred amounts of the employer and employee share of social security tax by March 19. Filers will be able to select the new option to make these payments.

To learn more about federal and state laws, regulations, and information to keep your company's payroll operations in compliance, check out Payroll Source Plus!

Jyme Mariani, Esq., is Managing Editor of Payroll Currently and Payroll Information Resources for the APA.