New Revisions to Form 941

Please note: This blog is current to the date of its publication, Wednesday, May 6. For additional updates or assistance navigating these uncertain times, please contact us or visit our SST COVID-19 resource page.


A draft of new revisions to Form 941, an Internal Revenue Service (IRS) tool used for employers to report income taxes, social security taxes or Medicare taxes withheld from employee’s paychecks, was recently brought to SST’s attention. These changes, which are still pending approval, are designed to support certain employers that operate a business in 2020 and retain employees, despite experiencing economic hardships related to COVID-19, with an employee retention credit. Below, we expand on the draft changes to lines 13b, 19 and 20 that could impact you or your business.

A draft of line 19 now reads, “Qualified health plan expenses allocable to qualified sick leave wages” and line 20 now reads, “Qualified health plan expenses allocable to qualified family leave wages.” Both of these text changes are to recognize the fact that wages reported on lines 5a(i) and 5a(ii) will not include all such wages due to the social security wage threshold.

The text for line 13b has not yet changed, and more than likely will not. Further instructions, expected to be published soon, will include a draft 34-line worksheet to calculate the nonrefundable and refundable portions of all three new credits. Additionally, there is predicted to be a second draft of instructions posted in about 5-6 weeks from now.

SST is committed to equipping our clients with the most up-to-date information concerning COVID-19. We’re closely monitoring developments to Form 941 and encourage you to contact us with any questions or explore our COVID-19 resource page for additional information.

Thanks to Payroll Partners for providing content for this post.