There are going to be some changes to Form 941. The first change is the increase for the amount that has to be paid in social security taxes for employees. It is going to increase 2% since the previous payroll tax rate has now expired.
The second change is going to be the additional Medicare tax that is going to be held from the payrolls of the higher income employees. The IRS has now released the new version of Form 941 and both of the changes have been added to the form.
The IRS Form 941 (Employers Quarterly Federal Tax Form)
Form 941 is what employers use in order to submit the payroll taxes that are owed by employers and employees. It includes the information on payroll taxes that have been withheld from the employee paychecks and employer payments for payroll taxes from the employee withholding and for the employer portion of FICA taxes.
Additionally, it is also going to include a calculation of total amounts due for the quarter, for both the employer and the employees, and it shows what has been paid and what is still owed. If over-payments have been made or under – payments are owed it will be shown using a Form 941-V payment voucher.
Changes to Form 941
Two changes that have been made to the form because of the changes from the American Taxpayer Relief Act are listed below:
Increases Social Security Tax for Employers: The payroll tax cut program has reduced temporarily the social security tax for employees by 2%. It was originally 6.2% now it is 4.2%. However, for now and beyond the rate is going to be back at 6.2%.
This means that the social security tax that employers and employees are going to be responsible for paying is going to be 12.4% of their gross wages. This change can be found on Form 941 on lines 5a and 5b.
Additional Withholding for Additional Medicare Tax: Additional Medicare tax is due from the employees and self-employed individuals who have higher than normal incomes. Form 941 has been amended on line 5d. This additional amount is 0.9%. The amount is going to be valid for people who have an income over $200,000.
The additional Medicare tax is based on not only the income level of the employee but also their filing status. You can find the guidelines below:
- Married filing jointly – $250,000
- Married filing separately – $125,000
- Single – $200,000
- Head of household (with qualifying person) – $200,000
- Qualifying widow(er) with dependent child – $200,000
How to Submit Form 941
Form 941 has to be sent to the IRS at the end of the month at the end of each quarter. The first due date for the form is January 31, and the last quarter is December. Additional due dates for the form can be found below:
- April 30, for the quarter beginning January 1 and ending March 31
- July 31, for the quarter beginning April 1,
- and ending June 30
- October 31, for the quarter beginning July 1 and ending September 30
- January 31, for the quarter beginning October 1 and ending December 31
If the calculations on Form 941 show that you have underpaid you are going to have to make the payment using voucher 941-V. Other payroll taxes can be paid electronically via the Electronic Federal Tax Payment System.
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