Instructions for Form 941 X (Rev. April 2017)

Transcript

1 Userid: CPM Pt. size: 10 Leadpct: 100% Schema: Draft Ok to Print instrx Fileid: ... ns/I941X/201704/A/XML/Cycle06/source (Init. & Date) _______ AH XSL/XML 16:03 - 24-Apr-2017 Page 1 of 16 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. Department of the Treasury Internal Revenue Service Instructions for Form 941-X (April 2017) Adjusted Employer's QUARTERLY Federal Tax Return or Claim for Refund Section references are to the Internal Revenue Code Period of limitations to make certain corrections ex- unless otherwise noted. pired. Generally, you may correct overreported taxes on a previously filed Form 941 if you file Form 941-X within 3 Future Developments years of the date Form 941 was filed or 2 years from the For the latest information about developments related to date you paid the tax reported on Form 941, whichever is Form 941-X and its instructions, such as legislation later. For purposes of the period of limitations, Forms 941 IRS.gov/ enacted after they were published, go to for a calendar year are considered filed on April 15 of the Form941X . succeeding year if filed before that date. The period of limitations to correct social security tax What's New for 2011 and 2012 expired on April 15, 2015, and April 15, Employee consents to support a claim for refund. 2016, respectively, for most employers. These Rev. Proc. 2017-28, 2017–14 I.R.B. 1061, available at instructions no longer discuss the reduced rate of IRS.gov/irb/2017-14_IRB/ar09.html , provides guidance to employee social security tax that applied in 2011 and employers on the requirements for employee consents 2012. The 2011 and 2012 employee social security tax used by an employer to support a claim for refund of rate was 4.2% and the employer social security tax rate overcollected social security tax and Medicare tax. The was 6.2% (10.4% total). If the period of limitations for revenue procedure clarifies the basic requirements for 2011 and 2012 is still open, you can file the April 2017 both a request for employee consent and for the revision but make sure you use the correct rate when employee consent, and permits a consent to be reporting corrections on lines 8 and 9. requested, furnished, and retained in an electronic format Reminders as an alternative to a paper format. The revenue procedure also contains guidance concerning when an Retroactive increase in excludible transit benefits for employer may claim a refund of only the employer share 2014. The Tax Increase Prevention Act of 2014 of overcollected social security tax and Medicare tax. The increased the monthly transit benefit exclusion from $130 revenue procedure requires that any request for consent per participating employee to $250 per participating include an Additional Medicare Tax notice indicating that employee for the period of January 1, 2014, through any claim on the employee’s behalf won’t include a claim December 31, 2014. Employers were provided for overpaid Additional Medicare Tax. Rev. Proc. 2017-28 instructions on how to correct the social security and is effective for requests made on or after June 5, 2017. Medicare taxes on the excess transit benefits in Notice For requests made before June 5, 2017, employers may 2015-2, 2015-4 I.R.B. 334, available at IRS.gov/irb/ rely on the proposed revenue procedure set forth in 2015-4_IRB/ar06.html . Notice 2015-15, 2015-9 I.R.B. 687, available at IRS.gov/ Retroactive increase in excludible transit benefits for irb/2015-9_IRB/ar07.html . 2015. The Consolidated Appropriations Act, 2016, Qualified small business payroll tax credit for in- increased the monthly transit benefit exclusion from $130 For tax years beginning creasing research activities per participating employee to $250 per participating after December 31, 2015, a qualified small business may employee for the period of January 1, 2015, through elect to claim up to $250,000 of its credit for increasing December 31, 2015. Employers were provided research activities as a payroll tax credit against the instructions on how to correct the social security and employer’s share of social security tax. The portion of the Medicare taxes on the excess transit benefits in Notice credit used against the employer’s share of social security 2016-06, 2016-4 I.R.B. 287, available at IRS.gov/irb/ tax is allowed in the first calendar quarter beginning after 2016-04_IRB/ar07.html . the date that the qualified small business filed its income The Claiming the COBRA premium assistance credit. tax return. The election and determination of the credit COBRA premium assistance credit was available to an amount that will be used against the employer’s share of employer for premiums paid on behalf of employees who social security tax is made on Form 6765, Credit for were involuntarily terminated from employment between Increasing Research Activities. The amount from Form September 1, 2008, and May 31, 2010. The COBRA 6765, line 44, must then be reported on Form 8974, premium assistance credit isn’t available for individuals Qualified Small Business Payroll Tax Credit for Increasing who were involuntarily terminated after May 31, 2010. Research Activities. Form 8974 is used to determine the Therefore, only in rare circumstances, such as instances amount of the credit that can be used in the current where COBRA eligibility was delayed as a result of quarter. The amount from Form 8974, line 12, is reported employer provided health insurance coverage following on Form 941 or 941-SS, line 11. Any corrections to Form termination, will the credit be available. If you’re eligible to 941 or 941-SS, line 11, are reported on Form 941-X, claim the credit, use Form 941-X, lines 20a and 20b. Form line 14. If you make a correction on Form 941-X, line 14, 941-X should be filed after filing your Form 941 or 941-SS. you must attach a corrected Form 8974. Filing a Form 941-X before filing a Form 941 or 941-SS for Apr 24, 2017 Cat. No. 20331U

2 Page 2 of 16 Fileid: ... ns/I941X/201704/A/XML/Cycle06/source 16:03 - 24-Apr-2017 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. additional wages subject to tax). For more information the quarter may result in errors or delays in processing your Form 941-X. For more information, visit IRS.gov and about Additional Medicare Tax withholding, see the enter “COBRA” in the search box. Instructions for Form 941 and go to IRS.gov and enter “Additional Medicare Tax” in the search box. See the If you’re entitled to claim the COBRA premium instructions for line 11, later, for more information on the assistance credit, but aren’t otherwise required to TIP types of errors that can be corrected and how the file Form 941 or 941-SS, file a Form 941 or correction is reported on Form 941-X. 941-SS with -0- entered on line 14 before filing your Form Correcting the COBRA premium assistance credit. 941-X to claim the credit. For tax periods ending before January 1, 2014, employers Correcting federal income tax withheld. Generally, who made COBRA premium assistance payments for you may correct federal income tax withholding errors assistance eligible individuals were allowed a credit on only if you discovered the errors in the same calendar their Form 941 or 941-SS. Any errors discovered on a year you paid the wages. In addition, for an overcollection, previously filed Form 941 or 941-SS for this credit are you may correct federal income tax withholding only if you corrected on Form 941-X, lines 20a and 20b. Effective for also repaid or reimbursed the employees in the same tax periods beginning after December 31, 2013, Form year. 941-X, is used to both report the total COBRA premium assistance credit an employer is entitled to claim and For prior years, you may only correct administrative correct any previously reported credit. For more errors to federal income tax withholding (that is, errors in information, see the instructions for lines 20a and 20b, which the amount reported on Form 941, line 3, doesn’t later. agree with the amount you withheld from an employee’s wages) and errors for which section 3509 rates apply. See Agents and certified professional Aggregate Form 941. section 13 of Pub. 15, Employer’s Tax Guide, for more employer organizations (CPEOs) must complete information about corrections during the calendar year Schedule R (Form 941), Allocation Schedule for and about administrative errors. See section 2 of Pub. 15 Aggregate Form 941 Filers, when correcting an aggregate for more information about section 3509. If section 3509 Form 941. Schedule R (Form 941) is completed only for rates apply, see the instructions for line 15, later. those clients and customers who have corrections reported on Form 941-X. Schedule R (Form 941) is filed Only transposition or math errors involving the as an attachment to Form 941-X. Aggregate Forms 941 inaccurate reporting of the amount withheld are ! are filed by agents approved by the IRS under section CAUTION “administrative errors”. 3504. To request approval to act as an agent for an You can’t file a Form 941-X to correct federal income employer, the agent files Form 2678, Employer/Payer tax withholding for prior years for nonadministrative errors. Appointment of Agent, with the IRS. In other words, you can’t correct federal income tax Aggregate Forms 941 are also filed by CPEOs actually withheld from an employee in a prior year if you approved by the IRS under section 7705. CPEOs file discover that you didn’t withhold the right amount. For Form 8973, Certified Professional Employer Organization/ example, you can’t correct federal income tax withheld in Customer Reporting Agreement, to notify the IRS that a prior year because you used the wrong income tax they’ve started or ended a service contract with a client or withholding table in Pub. 15 or you didn’t treat a payment customer. correctly as taxable or nontaxable. Similarly, if you paid federal income tax in a prior year on behalf of your General Instructions: employee, rather than deducting it from the employee’s pay (which resulted in additional wages subject to tax), Understanding Form 941-X and in a subsequent year you determine that you incorrectly calculated the amount of tax, you can’t correct What Is the Purpose of Form 941-X? the federal income tax withholding. For tax periods beginning after December 31, The amount actually withheld is reflected on 2013, Forms 941 and 941-SS will no longer be ! payroll information or on Form W-2, Wage and TIP CAUTION used to claim the credit for COBRA premium Tax Statement, which can be used by the assistance payments. Instead, use Form 941-X. For more employee to claim a credit for withholding for individual information, see the instructions for lines 20a and 20b, income tax return purposes. later. Correcting Additional Medicare Tax withholding and Use Form 941-X to correct errors on a Form 941 that wages and tips subject to Additional Medicare Tax you previously filed. Use Form 941-X to correct: withholding. Beginning with the first quarter of 2013, Wages, tips, and other compensation; wages and tips subject to Additional Medicare Tax Income tax withheld from wages, tips, and other withholding are reported on Form 941, line 5d. Certain compensation; errors discovered on a previously filed Form 941 are Taxable social security wages; corrected on Form 941-X, line 11. However, you can’t file Taxable social security tips; a Form 941-X to correct Additional Medicare Tax actually Taxable Medicare wages and tips; withheld from an employee in a prior year, including any Taxable wages and tips subject to Additional Medicare amount you paid on behalf of your employee rather than Tax withholding; deducting it from the employee’s pay (which resulted in Instructions for Form 941-X (Rev. 4-2017) -2-

3 Page 3 of 16 16:03 - 24-Apr-2017 Fileid: ... ns/I941X/201704/A/XML/Cycle06/source The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. You have additional requirements to complete when Qualified small business payroll tax credit for increasing research activities; and filing Form 941-X, such as certifying that you filed (or will Credits for COBRA premium assistance payments. file) all applicable Forms W-2 and Forms W-2c, Corrected Wage and Tax Statements, with the Social Security Use Form 843, Claim for Refund and Request for Administration (SSA). For corrections of overreported Abatement, to request a refund or abatement of assessed federal income tax, social security tax, Medicare tax, or interest or penalties. Don’t request a refund or abatement Additional Medicare Tax, you must make any of assessed interest or penalties on Form 941 or Form certifications that apply to your situation. 941-X. Don’t use Form 941-X to correct Form CT-1, 943, References to Form 941 on Form 941-X and in 944, or 945. Instead, use the “X” form that ! these instructions also apply to Form 941-SS, TIP CAUTION corresponds to those forms (Form CT-1 X, 943-X, Employer's QUARTERLY Federal Tax 944-X, or 945-X). Return—American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands, Where Can You Get Help? unless otherwise noted. We use the terms “correct” and “corrections” on Form 941-X and in these instructions to For help filing Form 941-X or for questions about federal include interest-free adjustments under sections 6205 and employment taxes and tax corrections, you can: 6413 and claims for refund and abatement under sections Visit IRS.gov and enter “employment taxes” in the 6402, 6414, and 6404. See Rev. Rul. 2009-39 for search box; examples of how the interest-free adjustment and claim See Pub. 15 for correcting Form 941, or Pub. 80, for refund rules apply in 10 different situations. You can Federal Tax Guide for Employers in the U.S. Virgin find Rev. Rul. 2009-39, 2009-52, I.R.B. 951 at IRS.gov/irb/ Islands, Guam, American Samoa, and the Commonwealth 2009-52_IRB/ar14.html . of the Northern Mariana Islands, for correcting Form 941-SS; or When you discover an error on a previously filed Form Call the IRS Business and Specialty Tax Line at 941, you must: 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for Correct that error using Form 941-X, persons who are deaf, hard of hearing, or have a speech File a separate Form 941-X for each Form 941 that disability) Monday–Friday from 7:00 a.m. to 7:00 p.m. you’re correcting, and local time (Alaska and Hawaii follow Pacific time). File Form 941-X separately. Don’t file Form 941-X with Form 941. How Can You Order Forms, Instructions, and See also If you didn’t file a Form 941 for one or more quarters, Publications from the IRS , later. don’t use Form 941-X. Instead, file Form 941 for each of When Should You File Form 941-X? those quarters. See also When Should You File Form below. However, if you didn’t file Forms 941 941-X? File Form 941-X when you discover an error on a because you improperly treated workers as independent previously filed Form 941. contractors or nonemployees and are now reclassifying them as employees, see the instructions for line 23, later. However, if your only errors on Form 941 relate to the number of employees who received wages or to federal Report the correction of underreported and tax liabilities reported on Form 941, Part 2, or on overreported amounts for the same tax period on a single Schedule B (Form 941), Report of Tax Liability for Form 941-X, unless you’re requesting a refund or Semiweekly Schedule Depositors, don’t file Form 941-X. abatement. If you’re requesting a refund or abatement and For more information about correcting federal tax liabilities are correcting both underreported and overreported reported on Form 941, Part 2, or on Schedule B (Form amounts, file one Form 941-X correcting the 941), see the Instructions for Schedule B (Form 941). underreported amounts only and a second Form 941-X correcting the overreported amounts. The due date for filing Form 941-X depends Due dates. You’ll use the adjustment process if you underreported on when you discover an error and if you underreported or employment taxes and are making a payment, or if you overreported tax. If you underreported tax, see overreported employment taxes and will be applying the Underreported tax , later. For overreported amounts, you credit to Form 941 for the period during which you file may choose to either make an interest-free adjustment or Form 941-X. However, see the Caution under Is There a file a claim for refund or abatement. If you’re correcting Deadline for Filing Form 941-X , later, if you’re correcting overreported amounts, see Overreported tax—adjustment overreported amounts during the last 90 days of a period process or Overreported tax—claim process , later. of limitations. You’ll use the claim process if you If any due date falls on a Saturday, Sunday, or legal overreported employment taxes and are requesting a holiday, you may file Form 941-X on the next business refund or abatement of the overreported amount. Follow day. If we receive Form 941-X after the due date, we will the chart on the back of Form 941-X for help in choosing treat Form 941-X as filed on time if the envelope whether to use the adjustment process or the claim containing Form 941-X is properly addressed, contains process. Be sure to give us a detailed explanation on sufficient postage, and is postmarked by the U.S. Postal line 24 for each correction that you show on Form 941-X. Service on or before the due date, or sent by an IRS-designated private delivery service on or before the Continue to report current quarter fractions of cents, due date. If you don’t follow these guidelines, we will third-party sick pay, tips, and group-term life insurance on consider Form 941-X filed when it is actually received. Form 941, lines 7–9. Instructions for Form 941-X (Rev. 4-2017) -3-

4 Page 4 of 16 Fileid: ... ns/I941X/201704/A/XML/Cycle06/source 16:03 - 24-Apr-2017 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. or abatement on Form 941-X any time before the period of See Pub. 15 or Pub. 80 for more information on legal limitations on credit or refund expires on Form 941. If you holidays and IRS-designated private delivery services. also need to correct any underreported amounts, you If you’re correcting underreported Underreported tax. must file another Form 941-X reporting only corrections to tax, you must file Form 941-X by the due date of the return Is There a Deadline for the underreported amounts. See for the return period in which you discovered the error and Filing Form 941-X? next. . Doing so pay by the time you file the amount you owe You may not file a refund claim to correct federal will generally ensure that your correction is interest free income tax or Additional Medicare Tax actually ! and not subject to failure-to-pay or failure-to-deposit CAUTION withheld from employees. What About Penalties and Interest , (FTD) penalties. See later. For details on how to make a payment, see the Is There a Deadline for Filing Form instructions for line 21, later. If Form 941-X is filed late (after the due date of the 941-X? return for the return period in which you discovered the Generally, you may correct overreported taxes on a error), you must attach an amended Schedule B (Form previously filed Form 941 if you file Form 941-X within 3 941) to Form 941-X. Otherwise, the IRS may assess an years of the date Form 941 was filed or 2 years from the “averaged” FTD penalty. The total tax reported on the date you paid the tax reported on Form 941, whichever is “Total liability for the quarter” line of Schedule B (Form later. You may correct underreported taxes on a 941) must match the corrected tax (Form 941, line 12 previously filed Form 941 if you file Form 941-X within 3 (line 10 for quarters ending before January 1, 2017), years of the date the Form 941 was filed. We call each of combined with any correction entered on Form 941-X, these time frames a “period of limitations.” For purposes line 19) for the quarter, less any previous abatements and of the period of limitations, Forms 941 for a calendar year interest-free tax assessments. are considered filed on April 15 of the succeeding year if filed before that date. Form 941-X is If you discover an error in ... ... due You filed your 2013 fourth quarter Form 941 Example. on January 27, 2014, and payments were timely made. The IRS treats the return as if it were filed on April 15, April 30 January, February, March 1. 2014. On January 20, 2017, you discovered that you July 31 April, May, June 2. overreported social security and Medicare wages on that October 31 July, August, September 3. form by $350. To correct the error you must file Form 4. October, November, December January 31 941-X by April 18, 2017, which is the end of the period of limitations for Form 941, and use the claim process. The dates shown in the table above apply only to corrections of If you file Form 941-X to correct overreported underreported amounts. If any due date falls on a Saturday, amounts in the last 90 days of a period of Sunday, or legal holiday, you may file Form 941-X on the next ! CAUTION limitations, you must use the claim process. You business day. can’t use the adjustment process. If you’re also correcting underreported amounts, you must file another Form 941-X to correct the underreported amounts using the On April 10, 2017, you Example—You owe tax. adjustment process and pay any tax due. discovered that you underreported $10,000 of social security and Medicare wages on your 2016 first quarter Where Should You File Form 941-X? Form 941. File Form 941-X and pay the amount you owe by July 31, 2017, because you discovered the error in the Send your completed Form 941-X to the address shown second quarter of 2017, and July 31, 2017, is the due date next. for that quarter. If you file Form 941-X before July 31, 2017, pay the amount you owe by the time you file. If you Overreported tax—adjustment process. overreported tax on Form 941 and choose to apply the credit to Form 941 or Form 944, file an adjusted return on Form 941-X soon after you discover the error but more than 90 days before the period of limitations on the credit or refund for Form 941 expires. See Is There a Deadline for Filing Form 941-X? below. If you reduced your deposits during the quarter by the amount of the COBRA premium assistance ! CAUTION credit that will be reflected on your Form 941-X, don’t use the adjustment process to claim the COBRA premium assistance credit. Use the claim process. See the instructions for lines 20a and 20b, later. Overreported tax—claim process. If you overreported tax on Form 941, you may choose to file a claim for refund Instructions for Form 941-X (Rev. 4-2017) -4-

5 Page 5 of 16 16:03 - 24-Apr-2017 Fileid: ... ns/I941X/201704/A/XML/Cycle06/source The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. calendar year of the quarter you’re correcting on the top of THEN use this address ... IF you’re in ... any attachments. Connecticut, Delaware, District of Columbia, Florida, Georgia, Enter the Date You Discovered Errors Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, must enter the date you discovered errors. You You Department of the Treasury Michigan, New Hampshire, New discover an error when you have enough information to be Internal Revenue Service Jersey, New York, North Carolina, able to correct it. If you’re reporting several errors that you Cincinnati, OH 45999-0005 Ohio, Pennsylvania, Rhode discovered at different times, enter the earliest date you Island, South Carolina, discovered them here. Report any subsequent dates and Tennessee, Vermont, Virginia, related errors on line 24. West Virginia, Wisconsin Alabama, Alaska, Arizona, Must You Make an Entry on Each Line? Arkansas, California, Colorado, You must provide all of the information requested at the Hawaii, Idaho, Iowa, Kansas, top of page 1. You must check one box (but not both) in Department of the Treasury Louisiana, Minnesota, Part 1. In Part 2, you must check the box on line 3 and any Internal Revenue Service Mississippi, Missouri, Montana, applicable boxes on lines 4 and 5. In Part 3, if any line Nebraska, Nevada, New Mexico, Ogden, UT 84201-0005 North Dakota, Oklahoma, doesn’t apply, leave it blank. Complete Parts 4 and 5 as Oregon, South Dakota, Texas, instructed. Utah, Washington, Wyoming How Should You Report Negative Amounts? No legal residence or principal Internal Revenue Service P.O. Box 409101 place of business in any state Form 941-X uses negative numbers to show reductions in Ogden, UT 84409 tax (credits) and positive numbers to show additional tax (amounts you owe). for Special filing addresses exempt organizations; federal, Department of the Treasury When reporting a negative amount in columns 3 and 4, state, and local governmental Internal Revenue Service entities; and Indian tribal use a minus sign instead of parentheses. For example, Ogden, UT 84201-0005 governmental entities; regardless enter “-10.59” instead of “(10.59).” However, if you’re of location completing the return on your computer and your software only allows you to use parentheses to report negative amounts, you may use them. How Should You Complete Form How Should You Make Entries on Form 941-X? 941-X? You can help the IRS process Form 941-X timely and accurately if you follow these guidelines. Use a Separate Form 941-X for Each Quarter Type or print your entries. You’re Correcting Use Courier font (if possible) for all typed or computer-generated entries. Use a separate Form 941-X for each Form 941 that you’re Omit dollar signs. You may use commas and decimal correcting. For example, if you found errors on your Forms points, if desired. Enter dollar amounts to the left of any 941 for the third and fourth quarters of 2016, file one Form preprinted decimal point and cents to the right of it. 941-X to correct the 2016 third quarter Form 941. File a Always show an amount for cents. Don’t round entries second Form 941-X to correct the 2016 fourth quarter to whole dollars. Form 941. Complete all three pages and sign Form 941-X on EIN, Name, and Address page 3. Staple multiple sheets in the upper-left corner. Enter your EIN, name, and address in the spaces provided. Also enter your name and EIN on the top of What About Penalties and Interest? pages 2 and 3, and on any attachments. If your address Generally, your correction of an underreported amount has changed since you filed your Form 941, enter the won’t be subject to a failure-to-pay penalty, FTD penalty, corrected information and the IRS will update your or interest if you: address of record. Be sure to write your name, EIN,“ Form File on time (by the due date of the quarter in which you 941-X,” the calendar quarter you’re correcting (for discover the error), example, “Quarter 2”), and the calendar year of the the amount shown on line 21 by the time you file Pay quarter you’re correcting on the top of any attachments. Form 941-X, Return You’re Correcting Enter the date you discovered the error, and Explain in detail the grounds and facts relied on to In the box at the top of page 1, check the type of return support the correction. (Form 941 or Form 941-SS) you’re correcting. Check the appropriate box for the one quarter you’re correcting. No correction will be eligible for interest-free treatment Enter the calendar year of the Form 941 you’re correcting. if any of the following apply. Enter the quarter and calendar year on pages 2 and 3. Be The amounts underreported relate to an issue that was sure to write your name, EIN, “Form 941-X,” the quarter raised in an examination of a prior period. you’re correcting (for example, “Quarter 2”), and the You knowingly underreported your employment tax liability. Instructions for Form 941-X (Rev. 4-2017) -5-

6 Page 6 of 16 16:03 - 24-Apr-2017 Fileid: ... ns/I941X/201704/A/XML/Cycle06/source The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. You received a notice and demand for payment. 941-X before December in any year before the expiration You received a notice of determination under section of the period of limitations for the previously filed Form 7436. 941. In the year that the period of limitations for the previously filed Form 941 expires, file Form 941-X at least If you receive a notice about a penalty after you file this 90 days before the expiration date. return, reply to the notice with an explanation and we will determine if you meet the reasonable-cause criteria. Don’t attach an explanation when you file your return. Specific Instructions: Overview of the Process Part 1: Select ONLY One Process To correct a previously filed Form 941, use Form 941-X to Because Form 941-X may be used to file either an file either an adjusted employment tax return or a claim for adjusted employment tax return or a claim for refund or refund or abatement. The adjustment process and the must abatement, you check one box on either line 1 or claim process are outlined below. line 2. Don’t check both boxes. If you underreported If you underreported the tax. the tax on a previously filed Form 941, check the box on 1. Adjusted Employment Tax Return line 1 and by the any additional amount you owe pay Check the box on line 1 if you’re correcting underreported time you file Form 941-X. For details on how to make a amounts or overreported amounts and you would like to payment, see the instructions for line 21, later. use the adjustment process to correct the errors. Example—You underreported employment taxes. On June 19, 2017, you discover an error that results in If you’re correcting both underreported amounts and additional tax on your 2016 fourth quarter Form 941. File check this must overreported amounts on this form, you Form 941-X by July 31, 2017, and pay the amount you box. If you check this box, any negative amount shown on When Should You File Form owe by the time you file. See line 21 will be applied as a credit (tax deposit) to your 941-X , earlier. Don’t attach Form 941-X to your 2017 Form 941 or Form 944 for the period in which you’re filing second quarter Form 941. Example—You want your overreported tax this form. See above. applied as a credit to Form 941 If you overreported the tax. If you overreported the one choose tax on a previously filed Form 941, you may If you owe tax. Pay the amount shown on line 21 by the of the following options. time you file Form 941-X. Generally, you won’t be Use the adjustment process. Check the box on line 1 to charged interest if you file on time, pay on time, enter the apply any credit (negative amount) from line 21 to Form date you discovered the error, and explain the correction 941 for the quarter during which you file Form 941-X. on line 24. Check the box on line 2 to file a Use the claim process. You overreported employment If you have a credit. claim on Form 941-X requesting a refund or abatement of taxes (you have a negative amount on line 21) and want the amount shown on line 21. the IRS to apply the credit to Form 941 or Form 944 for the To ensure that the IRS has enough time to period during which you filed Form 941-X. The IRS will process a credit for an overreporting TIP apply your credit on the first day of the Form 941 or Form in the quarter during which you file adjustment 944 period during which you filed Form 941-X. However, Form 941-X, you’re encouraged to file Form 941-X the credit you show on Form 941-X, line 21, may not be correcting the overreported amount in the first two months fully available on your Form 941 or Form 944 if the IRS of a quarter. For example, if you discover an overreported corrects it during processing or you owe other taxes, amount in March, June, September, or December, you penalties, or interest. The IRS will notify you if your may want to file Form 941-X in the first two months of the claimed credit changes or if the amount available as a next quarter. However, there must be 90 days remaining credit on Form 941 or Form 944 was reduced because of on the period of limitations when you file Form 941-X. See unpaid taxes, penalties, or interest. the under Caution Is There a Deadline for Filing Form Don’t check the box on line 1 if you’re either: (a) 941-X , earlier. This should ensure that the IRS will have correcting overreported amounts and the period of enough time to process Form 941-X so the credit will be ! CAUTION limitations on credit or refund for Form 941 will posted before you file Form 941, thus avoiding an expire within 90 days of the date you file Form 941-X, or erroneous balance due notice from the IRS. See the (b) claiming a credit for COBRA premium assistance example below. payments and you reduced your deposits in anticipation of the credit. Instead, in either case, check the box on Example—You want your overreported tax applied line 2 to file a Form 941-X under the claim process. See Is as a credit to Form 941. On June 19, 2017, you There a Deadline for Filing Form 941-X , earlier. Also see discover you overreported your tax on your 2016 fourth the instructions for lines 20a and 20b, later. quarter Form 941 and want to choose the adjustment process. To allow the IRS enough time to process the 2. Claim credit, you file Form 941-X on July 3, 2017, and take the credit on your third quarter 2017 Form 941. Check the box on line 2 to use the claim process if you’re correcting and you’re overreported amounts only If you currently file Form 944 and you’re making a claiming a refund or abatement for the negative amount correction to a previously filed Form 941 that will TIP be claimed as a credit on Form 944, file Form Instructions for Form 941-X (Rev. 4-2017) -6-

7 Page 7 of 16 16:03 - 24-Apr-2017 Fileid: ... ns/I941X/201704/A/XML/Cycle06/source The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. written statements from some employees but you couldn’t (credit) shown on line 21. Don’t check this box if you’re locate employees or secure the statements of the correcting any underreported amounts on this form. remaining employees, check all applicable boxes. Provide You must check the box on line 2 if you have a credit a summary on line 24 of the amount of the corrections and the period of limitations on credit or refund for Form both for the employees who provided written statements 941 will expire within 90 days of the date you file Form and for those who didn’t. , Is There a Deadline for Filing Form 941-X 941-X. See Check the box on line 4a if your overreported amount 4a. earlier. includes each affected employee share of overcollected The IRS usually processes claims shortly after they are taxes. You’re certifying that you repaid or reimbursed the filed. The IRS will notify you if your claim is denied, employee share of current and prior year taxes and you accepted as filed, or selected to be examined. See Pub. received written statements from the employees stating 556, Examination of Returns, Appeal Rights, and Claims that they didn’t and won’t receive a refund or credit for the for Refund, for more information. prior year taxes. You’re certifying that you adjusted federal income tax or Additional Medicare Tax withheld from Unless the IRS corrects Form 941-X during processing employees for the current calendar year only. Don’t send or you owe other taxes, penalties, or interest, the IRS will these statements to the IRS. Keep them for your records. refund the amount shown on line 21, plus any interest that Generally, all employment tax records must be kept for at applies. least 4 years. Copies must be submitted to the IRS if You may not file a refund claim to correct federal requested. income tax or Additional Medicare Tax actually ! Check the box on line 4b to certify that your 4b. CAUTION withheld from employees. overreported amount is only for the employer share of taxes on those employees who you were unable to find or Part 2: Complete the Certifications those who didn’t give you a statement described on line 4a. You must complete all certifications that apply by checking the appropriate boxes. If all of your corrections Check the box on line 4c to certify that your 4c. relate to underreported amounts, complete line 3 only; overreported amount is only for federal income tax, social skip lines 4 and 5 and go to Part 3. If your corrections security tax, Medicare tax, or Additional Medicare Tax that relate to overreported amounts, you have a duty to ensure you didn’t withhold from your employees. that your employees' rights to recover overpaid employee social security and Medicare taxes that you withheld are 5. Certifying Claims protected. The certifications on lines 4 and 5 address the If you’re filing a claim for refund or abatement of requirement to: overreported federal income tax, social security tax, Repay or reimburse your employees for the Medicare tax, or Additional Medicare Tax and checked overcollection of employee social security and Medicare the box on line 2, check the appropriate box on line 5. You taxes, or may need to check more than one box. If you obtained Obtain consents from your employees to file a claim on written statements or consents from some employees but their behalf. See Rev. Proc. 2017-28 for guidance on the you couldn’t locate employees or secure the statements requirements for both a request for employee consent and or consents of the remaining employees, check all for the employee consent. applicable boxes. Provide a summary on line 24 of the amount of the corrections for both the employees who 3. Filing Forms W-2 or Forms W-2c provided statements or consents and for those who didn’t. Check the box on line 3 to certify that you filed or will file You can’t file a refund claim to correct federal Forms W-2 or Forms W-2c with the SSA, as required, income tax or Additional Medicare Tax actually ! showing your employees' correct wage and tax amounts. CAUTION withheld from employees in a prior year. If you See the General Instructions for Forms W-2 and W-3 for request their consent to file a claim for social security tax detailed information about filing requirements. References or Medicare tax, you must tell your employees that you to Form W-2 on Form 941-X and in these instructions also can’t claim a refund of any Additional Medicare Tax on apply to Forms W-2AS, W-2CM, W-2GU, and W-2VI their behalf. See Rev. Proc. 2017-28 for sample language unless otherwise noted. to use in your request. You must check the box on line 3 to certify that you filed Check the box on line 5a if your overreported tax 5a. Forms W-2 or Forms W-2c even if your corrections on includes each affected employee share of social security Form 941-X don’t change amounts shown on those forms. and Medicare taxes. You’re certifying that you repaid or For example, if your only correction to Form 941 involves reimbursed to the employees their share of social security misstated tax adjustments (see the instructions for line 13, and Medicare taxes. For refunds of employee social later), check the box on line 3 to certify that you already security and Medicare taxes overcollected in prior years, filed all required Forms W-2 and W-2c with the SSA. you’re certifying that you received written statements from 4. Certifying Overreporting Adjustments those employees stating that they didn’t and won’t receive a refund or credit for the prior year taxes. Don’t send these If you overreported federal income tax, social security tax, statements to the IRS. Keep them for your records. Medicare tax, or Additional Medicare Tax and checked Generally, all employment tax records must be kept for at the box on line 1, check the appropriate box on line 4. You may need to check more than one box. If you obtained Instructions for Form 941-X (Rev. 4-2017) -7-

8 Page 8 of 16 16:03 - 24-Apr-2017 Fileid: ... ns/I941X/201704/A/XML/Cycle06/source The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. least 4 years. Copies must be submitted to the IRS if Part 3: Enter the Corrections for This requested. Quarter 5b. Check the box on line 5b if your overreported tax includes each affected employee share of social security What Amounts Should You Report in Part 3? and Medicare taxes and you haven’t yet repaid or of all On lines 6–11, columns 1 and 2, show amounts for reimbursed the employee share of taxes. You’re certifying your employees, not just for those employees whose that you received consent from each affected employee to amounts you’re correcting. file a claim on the employee share of those taxes and you received written statements from those employees stating If a correction that you report in column 4 includes both that they didn’t and won’t receive a refund or credit for the underreported and overreported amounts (see the prior year taxes. instructions for line 22, later), give us details for each error on line 24. An employee consent must: Contain the name, address, and social security number Because special circumstances apply for lines 12–18, (or truncated taxpayer identification number, when 20a, and 20b, read the instructions for each line carefully appropriate) of the employee; before entering amounts in the columns. Contain the name, address, and EIN of the employer; If you previously adjusted or amended Form 941 Contain the tax period(s), type of tax, and the amount of by using Form 941-X or because of an IRS tax for which the consent is provided; ! CAUTION examination change, show amounts in column 2 Affirmatively state that the employee authorizes the that include those previously reported corrections. employer to claim a refund for the overpayment of the employee share of tax; For amounts collected in a prior year, include the 6. Wages, Tips, and Other Compensation employee’s written statement certifying that the employee If you’re correcting the wages, tips, and other hasn’t made any previous claims (or the claims were compensation you reported on Form 941, line 2, enter the rejected) and won’t make any future claims for refund or total corrected amount for all employees in column 1. In credit of the amount of the overcollection; column 2, enter the amount you originally reported. In Identify the basis of the claim; and column 3, enter the difference between columns 1 and 2. Be dated and contain the employee’s signature under This line doesn’t apply to Form 941-SS. penalties of perjury. The penalties of perjury statement If you or the IRS previously corrected the amount should be located immediately above the required reported on Form 941, line 2, enter in column 2 the signature. amount after any previous corrections. Don’t send these statements and consents to the IRS. Keep them for your records. Generally, all employment line 6 (column 1) tax records must be kept for at least 4 years. Copies must - line 6 (column 2) be submitted to the IRS if requested. line 6 (column 3) If the amount in column 2 is larger than the In certain situations, you may not have repaid or amount in column 1, use a minus sign in reimbursed your employees or obtained their consents column 3. prior to filing a claim, such as in cases where the period of limitations on credit or refund is about to expire. In those situations, file Form 941-X, but don’t check a box on Example —Wages, tips, and other compensation line 5. Tell us on line 24 that you haven’t repaid or You reported $9,000 as total wages, tips, and increased. reimbursed employees or obtained consents at the time other compensation on line 2 of your 2017 first quarter you file the claim. However, you must repay or reimburse Form 941. In May of 2017, you discovered that you had your employees and certify that you’ve done so before the overlooked $1,000 in tips for one of your part-time IRS can allow the claim. employees. To correct the error, figure the difference on Form 941-X as shown. Check the box on line 5c to certify that your 5c. overreported tax is only for the employer share of social security and Medicare taxes. This applies when affected 10,000.00 Column 1 (corrected amount) employees didn’t give you consent to file a claim for Column 2 (Form 941, line 2) - 9,000.00 refund for the employee share of social security and Column 3 (difference) 1,000.00 Medicare taxes, they couldn’t be found, or they didn’t give you a statement described on line 5b. Example —Wages, tips, and other compensation Check the box on line 5d to certify that your 5d. decreased. You reported $9,000 as wages, tips, and overreported amount is only for federal income tax, social other compensation on line 2 of your 2017 first quarter security tax, Medicare tax, or Additional Medicare Tax that Form 941. In May of 2017, you discovered that you you didn’t withhold from your employees. included $2,000 in wages for one of your employees twice. To correct the error, figure the difference on Form 941-X as shown. Instructions for Form 941-X (Rev. 4-2017) -8-

9 Page 9 of 16 16:03 - 24-Apr-2017 Fileid: ... ns/I941X/201704/A/XML/Cycle06/source The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. Column 1 (corrected amount) 7,000.00 You can’t file a Form 941-X to correct federal income tax - 9,000.00 Column 2 (Form 941, line 2) withholding for prior years for nonadministrative errors. In -2,000.00 Column 3 (difference) other words, you can’t correct federal income tax actually withheld from an employee in a prior year if you discover that you didn’t withhold the right amount. For example, Example—Auto allowance; wages, tips, and other you can’t correct federal income tax withheld in a prior You paid one of your compensation increased. year because you used the wrong income tax withholding employees a $500 monthly auto allowance from October table in Pub. 15 or you didn’t treat a payment correctly as through December 2016, and didn’t treat the payments as taxable or nontaxable. Similarly, if you paid federal taxable wages. In February 2017, you realized that the income tax in a prior year on behalf of your employee, payments were wages because they weren’t rather than deducting it from the employee’s pay (which reimbursements of deductible business expenses that resulted in additional wages subject to tax), and in a were substantiated and paid under an accountable plan. subsequent year you determine that you incorrectly You correct the error by treating the auto allowance as calculated the amount of tax, you can’t correct the federal wages subject to income, social security, and Medicare income tax withholding. taxes. Report the additional $1,500 of wages on lines 6, 8, Example—Failure to withhold federal income tax and 10. when required. You were required to withhold $400 of federal income tax from an employee's bonus that was The amount on line 6, column 1, should be used paid in December of 2016 but you withheld nothing. You on your Forms W-2 or Forms W-2c. This amount TIP discovered the error on March 16, 2017. You can’t file should also be used for any business expense Form 941-X to correct federal income tax withheld deduction on your income tax return (or amended return) reported on your 2016 fourth quarter Form 941 because for wages paid. the error involves a previous year and the amount previously reported for the employee represents the 7. Federal Income Tax Withheld from Wages, actual amount withheld from the employee during 2016. Tips, and Other Compensation Example—Administrative error reporting federal If you’re correcting the federal income tax withheld from You had three employees. In the fourth income tax. wages, tips, and other compensation you reported on quarter of 2016, you withheld $1,000 of federal income tax Form 941, line 3, enter the total corrected amount in from Xavier Black, $2,000 from Sophie Rose, and $6,000 column 1. In column 2, enter the amount you originally from Leo Wood. The total amount of federal income tax reported or as previously corrected. In column 3, enter the you withheld was $9,000. You mistakenly reported $6,000 difference between columns 1 and 2. This line doesn’t on line 3 of your 2016 fourth quarter Form 941. You apply to Form 941-SS. discovered the error on March 13, 2017. This is an example of an administrative error that may be corrected line 7 (column 1) in a later calendar year because the amount actually - line 7 (column 2) withheld from the employees' wages differs from the line 7 (column 3) If the amount in column 2 is larger than the amount reported on Form 941. Use Form 941-X to correct amount in column 1, use a minus sign in the error. Enter $9,000 in column 1 and $6,000 in column column 3. 2. Subtract the amount in column 2 from the amount in column 1. Copy the amount in column 3 to column 4. Include any 9,000.00 Column 1 (corrected amount) minus sign shown in column 3. - 6,000.00 Column 2 (Form 941, line 3) Generally, you may correct federal income tax 3,000.00 Column 3 (difference) withholding errors only if you discovered the ! CAUTION errors in the same calendar year you paid the wages. In addition, for an overcollection, you may correct Report the $3,000 as a tax correction in column 4. federal income tax withholding only if you also repaid or Be sure to explain the reasons for this correction on reimbursed the employees in the same year. For prior line 24. years, you may only correct administrative errors to federal income tax withholding (that is, errors in which the Example—Nonadministrative error reporting amount reported on Form 941, line 3, doesn’t agree with income tax due to repayment of wages paid in prior the amount you withheld from an employee’s wages) and year. You paid Jack Brown $4,000 of wages for 2 months errors for which section 3509 rates apply. Only of work in September 2016. You withheld $400 of federal transposition or math errors involving the inaccurate income tax at the time you paid Jack. These amounts reporting of the amount withheld are “administrative were reported on your 2016 third quarter Form 941. Jack errors”. See section 13 of Pub. 15 for more information left employment in October 2016 (after only 1 month of about corrections during the calendar year and about service). After the end of the year, Jack repaid $2,000 to administrative errors. See section 2 of Pub. 15 for more you. You can’t file Form 941-X to reduce the federal information about section 3509. If section 3509 rates income tax withheld because you actually withheld the apply, see the instructions for line 15, later. federal income tax from wages. You also can’t file Form 941-X to reduce wages because the wages were income Instructions for Form 941-X (Rev. 4-2017) -9-

10 Page 10 of 16 16:03 - 24-Apr-2017 Fileid: ... ns/I941X/201704/A/XML/Cycle06/source The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. amount you originally reported or as previously corrected. to Jack for the prior year. These amounts were correctly reported on Form 941. In column 3, enter the difference between columns 1 and 2. 8. Taxable Social Security Wages If you’re correcting the taxable social security wages you line 9 (column 1) reported on Form 941, line 5a, column 1, enter the total - line 9 (column 2) corrected amount in column 1. In column 2, enter the If the amount in column 2 is larger than the line 9 (column 3) amount you originally reported or as previously corrected. amount in column 1, use a minus sign in In column 3, enter the difference between columns 1 and column 3. 2. line 8 (column 1) Multiply the amount in column 3 by 0.124 and report - line 8 (column 2) that result in column 4. line 8 (column 3) If the amount in column 2 is larger than the amount in column 1, use a minus sign in line 9 (column 3) column 3. x 0.124 If the amount in column 3 used a minus sign, line 9 (column 4) also use a minus sign in column 4. Multiply the amount in column 3 by 0.124 and enter that result in column 4. Note. If you’re correcting only the employer share of tax line 8 (column 3) on a decrease to social security tips, use 0.062 (6.2%) x 0.124 when multiplying the amount shown in column 3. If you’re If the amount in column 3 used a minus sign, line 8 (column 4) correcting both shares of tax for some employees and also use a minus sign in column 4. only the employer share for other employees, report the properly calculated amount in column 4. Be sure to show your calculations on line 24. If you’re correcting only the employer share of tax Note. Example—Social security tips increased. on a decrease to social security wages, use 0.062 (6.2%) Example—Wages, tips, and other Following the when multiplying the amount shown in column 3. If you’re compensation increased in the instructions for line 6, the correcting both shares of tax for some employees and tips that you overlooked were also taxable social security only the employer share for other employees, enter the tips. To correct the error, figure the difference on Form properly calculated amount in column 4. Be sure to show 941-X as shown. your calculations on line 24. Column 1 (corrected amount) 10,000.00 Example—Social security wages decreased. - 9,000.00 Column 2 (Form 941, line 5b, column 1) Following Example—Wages, tips, and other in the instructions for line 6, the compensation decreased 1,000.00 Column 3 (difference) wages that you counted twice were also taxable social security wages. To correct the error, figure the difference on Form 941-X as shown. Use the difference in column 3 to determine your tax correction. Column 1 (corrected amount) 7,000.00 - 9,000.00 Column 2 (Form 941, line 5a, column 1) Column 3 (difference) 1,000.00 x 0.124 Tax rate (12.4%) Column 3 (difference) -2,000.00 Column 4 (tax correction) 124.00 Use the difference in column 3 to determine your tax correction. Be sure to explain the reasons for this correction on line 24. -2,000.00 Column 3 (difference) 10. Taxable Medicare Wages and Tips x 0.124 Tax rate (12.4%) -248.00 Column 4 (tax correction) If you’re correcting the taxable Medicare wages and tips you reported on Form 941, line 5c, column 1, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. Be sure to explain the reasons for this correction on In column 3, enter the difference between columns 1 and line 24. 2. 9. Taxable Social Security Tips If you’re correcting the taxable social security tips you reported on Form 941, line 5b, column 1, enter the total corrected amount in column 1. In column 2, enter the Instructions for Form 941-X (Rev. 4-2017) -10-

11 Page 11 of 16 16:03 - 24-Apr-2017 Fileid: ... ns/I941X/201704/A/XML/Cycle06/source The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. section 3509 rates apply. If section 3509 rates apply, see line 10 (column 1) the instructions for line 18. - line 10 (column 2) If the amount in column 2 is larger than the line 10 (column 3) If a prior year error was a nonadministrative error, you amount in column 1, use a minus sign in may correct only the subject to wages and tips column 3. Additional Medicare Tax withholding that were originally reported on Form 941, line 5d, column 1, or previously corrected on Form 941-X. You can’t correct the tax Multiply the amount in column 3 by 0.029 (2.9% tax reported on Form 941, line 5d, column 2. rate) and enter that result in column 4. Errors discovered in the same calendar year or prior year administrative errors. If you’re correcting the line 10 (column 3) taxable wages and tips subject to Additional Medicare Tax x 0.029 withholding that you reported on Form 941, line 5d, If the amount in column 3 used a minus sign, line 10 (column 4) column 1, enter the total corrected amount in column 1. In also use a minus sign in column 4. column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2. If you’re correcting only the employer share of tax Note. line 11 (column 1) on a decrease to Medicare wages and tips, use 0.0145 - line 11 (column 2) (1.45%) when multiplying the amount in column 3. If you’re correcting both shares of tax for some employees If the amount in column 2 is larger than the line 11 (column 3) and only the employer share for other employees, enter amount in column 1, use a minus sign in column 3. the properly calculated amount in column 4. Be sure to explain your calculations on line 24. Example—Medicare wages and tips decreased. Multiply the amount in column 3 by 0.009 (0.9% tax Example—Wages, tips, and other Following rate) and enter that result in column 4. compensation decreased in the instructions for line 6, the wages that you counted twice were also taxable Medicare line 11 (column 3) wages and tips. To correct the error, figure the difference x 0.009 on Form 941-X as shown. line 11 (column 4) If the amount in column 3 used a minus sign, also use a minus sign in column 4. Column 1 (corrected amount) 7,000.00 - 9,000.00 Column 2 (Form 941, line 5c, column 1) -2,000.00 Column 3 (difference) Example—Prior year administrative error (incorrectly reported amount of Additional Medicare Tax actually withheld). Xavier Black's wages exceeded Use the difference in column 3 to determine your tax the $200,000 withholding threshold for Additional correction. Medicare Tax in November 2016. The total wages paid to Xavier for 2016 were $230,000. You withheld $270 -2,000.00 Column 3 (difference) ($30,000 x 0.009) from the Xavier's wages. However, on Tax rate (2.9%) x 0.029 your fourth quarter 2016 Form 941 you mistakenly reported $3,000 on line 5d, column 1, and Additional -58.00 Column 4 (tax correction) Medicare Tax withheld of $27 on line 5d, column 2. You discover the error on March 16, 2017. This is an example of an administrative error that may be corrected in a later Be sure to explain the reasons for this correction on calendar year because the amount actually withheld line 24. differs from the amount reported on your fourth quarter 11. Taxable Wages and Tips Subject to 2016 Form 941. Use Form 941-X, line 11, to correct the error as shown below. Additional Medicare Tax Withholding Generally, you may correct errors to Additional Medicare 30,000.00 Column 1 (corrected amount) Tax withholding if you discovered the errors in the only Column 2 (Form 941, line 5d, column 1) - 3,000.00 same calendar year the wages and tips were paid to employees. However, you may correct errors to Additional Column 3 (difference) 27,000.00 Medicare Tax withholding for prior years if the amount reported on Form 941, line 5d, column 2, doesn’t agree with the amount you actually withheld, including any Use the difference in column 3 to determine your tax amount you paid on behalf of your employee rather than correction. deducting it from the employee’s pay (which resulted in additional wages subject to tax). This type of error is an administrative error. You may also correct errors to Additional Medicare Tax withholding for prior years if Instructions for Form 941-X (Rev. 4-2017) -11-

12 Page 12 of 16 Fileid: ... ns/I941X/201704/A/XML/Cycle06/source 16:03 - 24-Apr-2017 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. withheld $270 ($30,000 x 0.009) from Xavier's wages. Column 3 (difference) 27,000.00 However, on your fourth quarter 2016 Form 941 you Tax rate (0.9%) x 0.009 mistakenly reported $3,000 on line 5d, column 1, and 243.00 Column 4 (tax correction) Additional Medicare Tax withheld of $27 on line 5d, column 2. The difference in wages subject to Additional Medicare Tax related to this administrative error is Be sure to explain the reasons for this correction on $27,000 ($30,000 - $3,000). line 24. Sophie Rose‘s wages exceeded the $200,000 You may correct Prior year nonadministrative errors. withholding threshold for Additional Medicare Tax in the taxable wages and tips subject to Additional only December 2016. The total wages paid to Sophie for 2016 Medicare Tax withholding that you reported on Form 941, were $220,000. You were required to withhold $180 line 5d, column 1. Enter the total corrected amount in ($20,000 x 0.009) but you withheld nothing and didn’t column 1. In column 2, enter the amount you originally report Sophie's $20,000 in wages subject to Additional reported or as previously corrected. In column 3, enter the Medicare Tax withholding on line 5d of your fourth quarter difference between columns 1 and 2. 2016 Form 941. You discover both errors on March 16, 2017. Use Form line 11 (column 1) 941-X, line 11, to correct the errors as shown below. - line 11 (column 2) If the amount in column 2 is larger than the line 11 (column 3) 50,000.00 Column 1 (corrected amount) amount in column 1, use a minus sign in - 3,000.00 Column 2 (Form 941, line 5d, column 1) column 3. Column 3 (difference) 47,000.00 Don’t multiply the amount in column 3 by 0.009 (0.9% Determine the portion of wages and tips reported in tax rate). Leave column 4 blank and explain the reasons column 3 that is related to the administrative error for this correction on line 24. ($47,000 - $20,000 (nonadministrative error) = $27,000 Example—Prior year nonadministrative error (administrative error)). Multiply this portion of column 3 by (failure to withhold Additional Medicare Tax when 0.009 (0.9% tax rate) to determine your tax correction. required). Sophie Rose’s wages exceeded the $200,000 withholding threshold for Additional Medicare Tax in Difference related to administrative error 27,000.00 December 2016. The total wages paid to Sophie for 2016 x 0.009 Tax rate (0.9%) were $220,000. You were required to withhold $180 ($20,000 x 0.009) but you withheld nothing and didn’t Column 4 (tax correction) 243.00 report an amount on line 5d of your fourth quarter 2016 Form 941. You discover the error on March 16, 2017. File Form 941-X to correct wages and tips subject to Be sure to explain the reasons for these corrections on Additional Medicare Tax withholding for your 2016 fourth line 24. You must also report that $20,000 of the amount quarter Form 941, but you may not correct the Additional shown in column 3 was related to the correction of a prior Medicare Tax withheld (column 4) because the error year nonadministrative error and $27,000 of the amount involves a previous year and the amount previously shown in column 3 was related to the correction of an reported for Sophie represents the actual amount withheld administrative error. from Sophie during 2016. 12. Section 3121(q) Notice and Demand—Tax Combination of prior year administrative and nonad- on Unreported Tips If you’re reporting both ministrative errors. Enter any corrections, including amounts reported on administrative errors and nonadministrative errors for the Form 941, line 5f, to the tax due from a Section 3121(q) same quarter of a prior year, enter the total corrected Notice and Demand on line 12. The IRS issues a Section amount in column 1. In column 2, enter the amount you 3121(q) Notice and Demand to advise an employer of the originally reported or as previously corrected. In column 3, amount of tips received by employees who failed to report enter the difference between columns 1 and 2. However, or underreported tips to the employer. An employer isn’t multiply only the amount of wages and tips reported in liable for the employer share of the social security and column 3 that are related to administrative errors by 0.009 Medicare taxes on unreported tips until a Section 3121(q) (0.9% tax rate). Don’t multiply any wages and tips Notice and Demand for the taxes is made to the employer reported in column 3 that are related to nonadministrative by the IRS. errors by 0.009 (0.9% tax rate). Use line 24 to explain in detail your corrections. The explanation must include the 13. Tax Adjustments reasons for the corrections and a breakdown of the Use line 13 to correct any adjustments reported on Form amount reported in column 3 into the amounts related to 941, lines 7–9. Enter in column 1 the total corrected administrative errors and nonadministrative errors. amount for Form 941, lines 7–9. Example—Combination of prior year administrative and nonadministrative errors. Xavier Black’s wages Enter in column 2 the total originally reported or exceeded the $200,000 withholding threshold for previously corrected amounts from Form 941, lines 7–9. In Additional Medicare Tax in November 2016. The total column 3, enter the difference between columns 1 and 2. wages paid to Xavier for 2016 were $230,000. You Instructions for Form 941-X (Rev. 4-2017) -12-

13 Page 13 of 16 16:03 - 24-Apr-2017 Fileid: ... ns/I941X/201704/A/XML/Cycle06/source The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. in column 4 or a negative number in column 3 as a line 13 (column 1) positive number in column 4. -line 13 (column 2) line 13 (column 3) You must attach a corrected Form 8974 and explain the reasons for this correction on line 24. 15–18. Special Additions to Wages for Federal You may need to report negative numbers in any Income Tax, Social Security Taxes, Medicare column. Make sure that the difference you enter in TIP column 3 accurately represents the change to Taxes, and Additional Medicare Tax adjustments originally reported or previously corrected on Section 3509 provides special rates for the employee Form 941, lines 7–9. share of income tax, social security tax, Medicare tax, and Additional Medicare Tax withholding when workers are Copy the amount in column 3 to column 4. Include any reclassified as employees in certain circumstances. The minus sign shown in column 3. applicable rate depends on whether you filed required information returns. An employer can’t recover any tax On line 24, describe what you misreported on Form paid under this provision from the employees. The full 941. Tell us if your adjustment is for fractions of cents, employer share of social security tax and Medicare tax is third-party sick pay, tips, or group-term life insurance. due for all reclassifications. Example—Current quarter's third-party sick pay You reported $6,900 (shown as underreported. Section 3509 rates aren’t available if you Note. “-6,900.00”) as a third-party sick pay adjustment intentionally disregarded the requirements to withhold (reduction to tax) on line 8 of your 2016 second quarter taxes from the employee, or if you withheld income tax but Form 941. You didn’t report any amounts on lines 7 and 9. didn’t withhold social security and Medicare taxes. Your third-party sick pay adjustment should’ve been Section 3509 rates are also not available for certain $9,600 (shown as “-9,600.00”) because your third-party statutory employees. sick pay payer withheld that amount of social security and only corrections to wages On lines 15–18 enter Medicare taxes from your employees. You discovered the resulting from reclassifying certain workers as employees error in April of 2017. To correct the error, figure the when section 3509 rates are used to calculate the taxes. difference on Form 941-X as shown. If the employer issued the required information returns, -9,600.00 Column 1 (corrected amount) use the section 3509 rates as follows. - (6,900.00) Column 2 (Form 941, line 8) For social security taxes, use the employer rate of 6.2% -2,700.00 Column 3 (difference) plus 20% of the employee rate of 6.2%, for a total rate of 7.44% of wages. For Medicare taxes, use the employer rate of 1.45% Here is how you would enter the numbers on Form plus 20% of the employee rate of 1.45%, for a total rate of 941-X. 1.74% of wages. For Additional Medicare Tax; 0.18% (20% of the Column 3 Column 2 Column 1 employee rate of 0.9%) of wages subject to Additional Medicare Tax. (corrected (Form 941, line 8) (difference) amount) For income tax withholding, the rate is 1.5% of wages. -9,600.00 -6,900.00 -2,700.00 If the employer didn’t issue the required information returns, use the section 3509 rates as follows. For social security taxes, use the employer rate of 6.2% Report “-2,700.00” as your correction in column 4. plus 40% of the employee rate of 6.2%, for a total rate of In this example, you’re claiming a credit for $2,700 in 8.68% of wages. overreported tax for your 2016 second quarter Form 941. For Medicare taxes, use the employer rate of 1.45% Always enter the same amount in column 4 (including any plus 40% of the employee rate of 1.45%, for a total rate of minus sign) that you enter in column 3. 2.03% of wages. Be sure to explain the reasons for this correction on For Additional Medicare Tax; 0.36% (40% of the line 24. employee rate of 0.9%) of wages subject to Additional Medicare Tax. 14. Qualified Small Business Payroll Tax Credit For income tax withholding, the rate is 3.0% of wages. for Increasing Research Activities Unlike other lines on Form 941-X, enter in column 1 If you’re correcting the qualified small business payroll tax only the corrected wages for workers being reclassified, credit for increasing research activities that you reported not the amount paid to all employees. Enter in column 2 on Form 941, line 11, enter the total corrected amount in previously reported wages (if any) to reclassified column 1. In column 2, enter the amount you originally employees. To get the amount for column 4, use the reported or as previously corrected. In column 3, enter the applicable section 3509 rates. If you filed the required difference between columns 1 and 2. information returns for some employees but didn’t file them for other employees, be sure to use the applicable Copy the amount in column 3 to column 4. However, to rates for each employee when calculating the amounts in properly show the amount as a credit or balance due item, column 4 and show your calculations on line 24. The tax enter a positive number in column 3 as a negative number Instructions for Form 941-X (Rev. 4-2017) -13-

14 Page 14 of 16 Fileid: ... ns/I941X/201704/A/XML/Cycle06/source 16:03 - 24-Apr-2017 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. correction in column 4 will be a positive number if you 941-X filed after submission of the Form 941, an increased the amount of wages you previously reported. employer that reduces its required deposits in anticipation See the instructions for line 23, later, for more information. of the credit will receive a system-generated notice reflecting a balance due and associated penalties and 19. Subtotal interest, if applicable. The balance due, including any Combine the amounts from column 4 on lines 7–18. related penalties and interest, resulting from the reduction You entered “1,400.00” in column 4 on Example. in deposits in anticipation of the credit will be abated when line 7, “-500.00” in column 4 on line 8, and “-100.00” in the credit is applied. Such abatement will generally occur column 4 on line 10. Combine these amounts and enter without any further action from the employer. Alternatively, “800.00” in column 4 on line 19. to prevent triggering a system-generated balance due notice, the employer can make its deposits without a reduction in anticipation of the COBRA premium 1,400.00 Line 7 assistance credit and follow these instructions for claiming Line 8 -500.00 the COBRA premium assistance credit. -100.00 Line 10 Line 19 800.00 For more information on the COBRA premium subsidy, visit IRS.gov and enter “COBRA” in the search box. Claiming or Correcting the COBRA 20a. 20b. Number of Individuals Provided COBRA Premium Assistance Credit Premium Assistance on line 20a Enter the total number of assistance-eligible individuals The COBRA premium assistance credit was provided COBRA premium assistance in column 1. Count available to an employer for premiums paid on ! each assistance-eligible individual who paid a reduced CAUTION behalf of employees who were involuntarily COBRA premium in the quarter as one individual, whether terminated from employment between September 1, 2008 or not the reduced premium was for insurance that and May 31, 2010. The COBRA premium assistance covered more than one assistance-eligible individual. For credit isn’t available for individuals who were involuntarily example, if the reduced COBRA premium was for terminated after May 31, 2010. Therefore, only in rare coverage for a former employee, spouse, and two circumstances, such as instances where COBRA children, you would include one individual in the number eligibility was delayed as a result of employer provided entered on line 20b for the premium assistance entered health insurance coverage following termination, will the on line 20a. Further, each individual is reported only once credit be available. per quarter. For example, an assistance-eligible individual Enter 65% of the total COBRA premium assistance who made monthly premium payments during the quarter payments for all assistance-eligible individuals in column would only be reported as one individual on line 20b for 1. Report the premium assistance payments on this line that quarter. only after the assistance-eligible individual's 35% share of For tax periods ending before January 1, 2014, enter the premium has been paid. For COBRA coverage the number of assistance-eligible individuals provided provided under a self-insured plan, COBRA premium COBRA premium assistance previously reported on Form assistance is treated as having been made for each 941 or 941-SS, line 12b, in column 2. For tax periods assistance-eligible individual who paid 35% of the beginning after December 31, 2013, enter -0- in column 2, COBRA premium. Don’t include the assistance-eligible unless you’re correcting a previously filed Form 941-X. If individual's 35% of the premium in the amount entered on you or the IRS previously corrected the number of this line. individuals reported, the number entered in column 2 For tax periods ending before January 1, 2014, enter should take into account all previous corrections. any COBRA premium assistance payments previously claimed on Form 941 or 941-SS, line 12a, in column 2. 21. Total For tax periods beginning after December 31, 2013, Combine the amounts on lines 19 and 20a of column 4 enter -0- in column 2, unless you’re correcting a COBRA and enter the result on line 21. premium assistance payment previously reported on a If the amount entered on line 21 is less than Your credit. Form 941-X. If you or the IRS previously corrected the zero, for example, “-115.00,” you have a credit because amount reported, the amount entered in column 2 should you overreported your federal employment taxes. take into account all previous corrections. If you checked the box on line 1, include this amount on Enter the difference between column 1 and 2 in column Form 941, line 13 (“Total deposits” line), for the quarter 3. Copy the amount in column 3 to column 4. However, to during which you filed Form 941-X or Form 944 “Total properly show the amount as a credit or balance due item, deposits” line, for the year during which you filed Form enter a positive number in column 3 as a negative number 941-X. Don’t make any changes to your record of federal in column 4 or a negative number in column 3 as a tax liability reported on Form 941, line 16, or Schedule B positive number in column 4. (Form 941), if your Form 941-X is filed timely. The amounts reported on the record should reflect your actual The COBRA premium assistance credit is treated tax liability for the period. as a credit on the first day of the return period ! CAUTION (that is, January 1, April 1, July 1, or October 1). If you checked the box on line 2, you’re filing a claim for However, because the credit is now claimed on Form refund or abatement of the amount shown. Instructions for Form 941-X (Rev. 4-2017) -14-

15 Page 15 of 16 16:03 - 24-Apr-2017 Fileid: ... ns/I941X/201704/A/XML/Cycle06/source The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. On line 24, you must explain the reason for both the If your credit is less than $1, we will send a refund or $15,000 increase and the $5,000 decrease. apply it only if you ask us in writing to do so. If the amount on line 21 is a positive Amount you owe. 23. Did You Reclassify Any Workers? number, you must the amount you owe by the time pay Check the box on line 23 if you reclassified any workers to Form 941-X. You may not use any credit that you you file be independent contractors or nonemployees. Also check show on another Form 941-X to pay the amount you owe, this box if the IRS (or you) determined that workers you even if you filed for the amount you owe and the credit at treated as independent contractors or nonemployees the same time. should be classified as employees. On line 24, give us a If you owe tax and are filing a timely Form 941-X, don’t detailed reason why any worker was reclassified and, if file an amended Schedule B (Form 941) unless you were you used section 3509 rates on lines 15–18, for any assessed an FTD penalty caused by an incorrect, worker reclassified as an employee, explain why section incomplete, or missing Schedule B (Form 941). Don’t 3509 rates apply and what rates you used. include the tax increase reported on Form 941-X on any Return not filed because you didn’t treat any workers amended Schedule B (Form 941) you file. If you didn’t previously file Form 941 as employees. If you owe tax and are filing a late Form 941-X, that is, because you mistakenly treated all workers as after the due date for Form 941 for the quarter in which independent contractors or as nonemployees, file a Form you discovered the error, you must file an amended 941 for each delinquent quarter. Schedule B (Form 941) with the Form 941-X. Otherwise, On each Form 941 for which you’re entitled to use the IRS may assess an “averaged” FTD penalty. The total section 3509 rates, complete the following steps. tax reported on the “Total liability for the quarter” line of in “Misclassified Employees” Write bold letters Schedule B (Form 941) must match the corrected tax across the top margin of page 1. (Form 941, line 12 (line 10 for quarters ending before Enter a zero on line 12 (line 10 for quarters ending January 1, 2017), combined with any correction reported before January 1, 2017). on Form 941-X, line 19) for the quarter, less any previous Complete the signature area. abatements and interest-free tax assessments. Attach a completed Form 941-X (see instructions next). Payment methods. You may pay the amount you owe On each Form 941-X complete the following steps. on line 21 electronically using the Electronic Federal Tax Complete the top of Form 941-X, including the date you Payment System (EFTPS), by credit or debit card, or by a discovered the error. check or money order. Enter the wage amounts on lines 15–18, column 1. The preferred method of payment is EFTPS. For more Enter zeros on lines 15–18, column 2. EFTPS.gov , call EFTPS Customer information, visit Complete columns 3 and 4 as instructed in Part 3. Service at 1-800-555-4477 or 1-800-733-4829 (TDD), or Provide a detailed statement on line 24. see Pub. 966. Complete the signature area. To pay by credit or debit card, visit the IRS website at IRS.gov/payments . If you can’t use section 3509 rates (for example, If you pay by check or money order, make it payable to because the workers you treated as ! “United States Treasury.” On your check or money order, CAUTION nonemployees were certain statutory employees), be sure to write your EIN, “Form 941-X,” the calendar file a Form 941 for each delinquent quarter. Write quarter you corrected (for example, “Quarter 2”), and the “ letters across the top bold ” in Misclassified Employees calendar year of the quarter you corrected. margin of page 1 of each Form 941. Complete Form 941 You don’t have to pay if the amount you owe is less using the Instructions for Form 941. Attach a Form 941-X than $1. to each Form 941. Complete the top of Form 941-X, If line 21 reflects Previously assessed FTD penalty. including the date you discovered the error, and provide a overreported tax and the IRS previously assessed an FTD detailed explanation on line 24. penalty, you may be able to reduce the penalty. For more information, see the Instructions for Schedule B (Form 24. Explain Your Corrections 941). Treasury regulations require you to explain in detail the grounds and facts relied upon to support each correction. Part 4: Explain Your Corrections for On line 24, describe in detail each correction you entered This Quarter in column 4 on lines 7-18 and 20a. Also use line 24 to describe corrections made on lines 6 and 20b. If you need 22. Correction of Both Underreported and more space, attach additional sheets, but be sure to write Overreported Amounts your name, EIN, “Form 941-X,” the quarter you’re correcting (for example, “Quarter 2”), and the calendar Check the box on line 22 if any corrections you entered on year of the quarter you’re correcting on the top of each lines 7-20a, column 3, reflect both underreported and sheet. overreported amounts. Example. If you had an increase to social security You must describe the events that caused the wages of $15,000 for Xavier Black and a decrease to underreported or overreported amounts. Explanations social security wages of $5,000 for Sophie Rose, you such as “social security and Medicare wages were would enter $10,000 on line 8, column 3. That $10,000 overstated” or “administrative/payroll errors were represents the net change from corrections. discovered” or “taxes were not withheld” are insufficient Instructions for Form 941-X (Rev. 4-2017) -15-

16 Page 16 of 16 Fileid: ... ns/I941X/201704/A/XML/Cycle06/source 16:03 - 24-Apr-2017 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. Include your complete address. If you work for a firm, and may delay processing your Form 941-X because the IRS may need to ask for a more complete explanation. enter the firm's name and the EIN of the firm. You can apply for a PTIN online or by filing Form W-12. For more Provide the following information in your explanation for information about applying for a PTIN online, visit the IRS each correction. IRS.gov/PTIN . You can’t use your PTIN in website at Form 941-X line number(s) affected. place of the EIN of the tax preparation firm. Date you discovered the error. Generally, you’re not required to complete this section Difference (amount of the error). if you’re filing the return as a reporting agent and have a Cause of the error. valid Form 8655 on file with the IRS. However, a reporting You may report the information in paragraph form. The agent must complete this section if the reporting agent following paragraph is an example. offered legal advice, for example, advising the client on “The $1,000 difference shown in column 3 on lines 6, 8, determining whether its workers are employees or and 10 was discovered on May 15, 2017, during an independent contractors for federal tax purposes. internal payroll audit. We discovered that we included $1,000 of wages for one of our employees twice. This How Can You Order Forms, correction removes the reported wages that were never paid.” Instructions, and Publications from For corrections shown on lines 15–18, column 3, the IRS? explain why the correction was necessary and attach any . IRS.gov/OrderForms Visit the IRS website at notice you received from the IRS. Part 5. Sign Here You must complete all three pages of Form 941-X and We ask for the Paperwork Reduction Act Notice sign it on page 3. If you don’t sign, processing of Form information on Form 941-X to carry out the Internal 941-X will be delayed. Revenue laws of the United States. We need it to figure and collect the right amount of tax. Subtitle C, The following persons Who must sign the Form 941-X? Employment Taxes, of the Internal Revenue Code are authorized to sign the return for each type of business imposes employment taxes, including federal income tax entity. withholding, on wages. This form is used to determine the The individual who owns the Sole proprietorship— amount of taxes that you owe. Section 6011 requires you business. to provide the requested information if the tax is Corporation (including a limited liability company applicable to you. (LLC) treated as a corporation)— The president, vice president, or other principal officer duly authorized to sign. You’re not required to provide the information Partnership (including an LLC treated as a requested on a form that is subject to the Paperwork partnership) or unincorporated organization— A Reduction Act unless the form displays a valid OMB responsible and duly authorized member, partner, or control number. Books and records relating to a form or officer having knowledge of its affairs. instructions must be retained as long as their contents Single-member LLC treated as a disregarded entity may become material in the administration of any Internal for federal income tax purposes— The owner of the Revenue law. LLC or a principal officer duly authorized to sign. Trust or estate— The fiduciary. The time needed to complete and file Form 941-X will vary depending on individual circumstances. The Form 941-X may also be signed by a duly authorized estimated average time is: agent of the taxpayer if a valid power of attorney has been filed. 16 hr., 15 min. ... Recordkeeping Alternative signature method. Corporate officers or ... Learning about the law or the form 30 min. duly authorized agents may sign Form 941-X by rubber Preparing and sending the form to the IRS 47 min. ... stamp, mechanical device, or computer software program. For details and required documentation, see Rev. Proc. 2005-39. You can find Rev. Proc. 2005-39, If you have comments concerning the accuracy of 2005-28 I.R.B. 82, at . IRS.gov/irb/2005-28_IRB/ar16.html these time estimates or suggestions for making Form 941-X simpler, we would be happy to hear from you. You Paid Preparer Use Only can send us comments from IRS.gov/FormComments . Or A paid preparer must sign Form 941-X and provide the you can send your comments to: Tax Forms and information in the Paid Preparer Use Only section of Part Publications Division, 1111 Constitution Ave. NW, 5 if the preparer was paid to prepare Form 941-X and isn’t IR-6526, Washington, DC 20224. Don’t send Form 941-X an employee of the filing entity. Paid preparers must sign to this address. Instead, see Where Should You File Form paper returns with a manual signature. The preparer must 941-X , earlier. give you a copy of the return in addition to the copy to be filed with the IRS. If you’re a paid preparer, enter your Preparer Tax Identification Number (PTIN) in the space provided. Instructions for Form 941-X (Rev. 4-2017) -16-

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