How to Correct IRS Form 941 Errors
Did you make a mistake on IRS Form 941? Find out how to correct Form 941 errors.
IRS Form 941 is the Employer's Quarterly Federal Tax Return. It must be filed each quarter by employers to report on income taxes and FICA taxes—Social Security and Medicare—that have been withheld from employees' pay. It also reports FICA taxes payable by the employer.
Form 941 is not a payment form. It documents information you need to give the IRS About your payroll tax liabilities and payments. The form includes:
- The total amounts withheld from employee pay for both FICA taxes and federal income taxes for the previous quarter,
- The amounts payable by the employer for its share of FICA taxes, and
- Amounts already deposited for these payroll taxes from the previous quarter
Form 941 must be submitted to the Internal Revenue Service within 30 days after the end of each quarter.
Use Form 941-X to Correct Form 941 Errors
The form you must use to correct Form 941 errors is Form 941-X. If you compare Form 941 with Form 941-X, you'll see that much of Form 941-X is a copy of the original form. That's because the IRS designed it that way. This form is a series of "X" forms the IRS has created to report adjustments to most employment tax forms, including Form 941.
What You Can Correct with Form 941-X
You can use Form 941-X to correct
- Wages, tips, and other compensation; Income tax withheld from wages, tips, and other compensation; T
- Taxable social security wages;
- Taxable social security tips;
- Taxable Medicare wages and tips, and
- Taxable wages and tips subject to Additional Medicare tax withholding
- Qualified small business payroll tax credit for increasing research activities, and
- Credits for COBRA premium assistance payments.
The IRS defines two different types of errors, and when you can correct them depends on the type.
- Administrative errors are errors. of transposition (mixing up numbers) or math errors involving inaccurate reporting of an amount withheld. If you want to correct just an administrative error, you can do it any time, unless it results in underreported tax or overreported tax. (See below)
- You can only correct federal withholding errors if you discover them in the same calendar year you paid the wages. You can correct federal income tax withholding only if you also repaid or reimbursed
When is Form 941-X Due?
The due date for filing Form 941-X depends on when you discover an error and if you underreported or overreported tax.
if you overreported tax, you can make an interest-free adjustment on a future quarterly 941 form or you can file a claim for refund or abatement. Use Form 843, Claim for Refund and Request for Abatement. The process is different, depending on when you file you file Form 941-X.
If you underreported tax, you must file Form 941-X and pay the amount due by the due date of the specific Form 941 after you discover the error. For example, if Form 941 was due on April 30 (for first quarter) and you find the error on June 30 (in the second quarter) of that year, you must file Form 941-X and pay the amount due by July 31, the due date for a second-quarter Form 941.
The process you use for underreported and overreported amounts is complicated. Use this Table "Which process should you use?" on Form 941-X for more details.
How Should I File Form 941-X?
You can mail in your Form 941-X. The mailing address depends on where your business is located. Use this list on "Where to File your Taxes" (for Form 94-X) to get the correct location.
Form 941X Overview
Form 941X has five parts.
Part 1 asks if this form is for an adjusted return or for a claim. You can't check both.
Part 2 asks some questions about why you're filing this form and to find out more about whether you are claiming a refund or adjustment.
Part 3 copies the original 941 form and asks you to correct the sections that were done incorrectly. You must include the total corrected amount, the previously reported amount, and the difference. Be sure to check your math as you complete this section.
Part 4 asks for a detailed explanation of why you are making these corrections.
Part 5 requires your signature and the signature of a paid preparer if you used one.
Completing Form 941X
You can only use the form for one quarter. If you're reporting errors for more than one quarter, you must use a separate form for each.
If your error affected employee withholding, you must obtain a written consent from each affected employee. You'll have to certify this statement:
"I have a written statement from each employee stating that he or she has not claimed (or the claim was rejected) and will not claim a refund or credit for the over-collection."
If you cannot get written consent from each employee, you can only make changes in the employer portion.
You must include a detailed explanation of how you determined your corrections.
See the Instructions for Form 941-X for more details on how to complete this form.
This article is intended to give you a general overview of this form, but it's not intended to be tax or legal advice. Form 941-X is complicated, and every tax situation is different. Get help with this form from your tax professional or a payroll service. You can also call the IRS Business and Specialty Tax Line at 1-800-829-4933, Monday-Friday from 7 a.m. to 7 p.m. local time.
IRS. "Correcting Employment Taxes." Accessed Oct. 11, 2019.
IRS. Instructions for Form 941-X. "What is the Purpose of Form 941-X? Page 2. Access Oct. 11, 2019.
IRS. Form 941-X. "Which Process Should You Use?" Page 4. Accessed Oct. 11, 2019.
IRS. Instructions for Form 941-X. "Part 2: Complete the Certifications." Page 7. Accessed Oct. 11, 2019.