Scott B. Price, CPA

New version of amended Form 941 return to be released in August

July 7, 2010

The IRS advised participants on the July monthly payroll industry telephone conference call that a new version of Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund, that was originally expected to be issued by the end of June, will not be issued until early August. The form is being revised as a result of a provision in the Hiring Incentives to Restore Employment Act (HIRE Act, P.L. 111-147), known as the “payroll tax exemption,” that provides certain employers with an exemption from their share of the Social Security taxes (6.2% tax rate) on wages paid to qualified new hires from March 19, 2010 to Dec. 31, 2010. The payroll tax exemption is reported by most employers on Form 941, Employer's Quarterly Federal Tax Return, beginning with the second quarter 2010 return due on Aug. 2, 2010. Form 941 was recently revised to include the payroll tax exemption.

Many employers have started preparing their second quarter Form 941. Shelley Dockstader, National Account Manager in IRS Electronic Tax Administration, notes that any employer who files Form 941 for the second quarter, and then realizes that the return needs to be amended, can still file Form 941-X using the June 2009 version of that form, as long as the return is not being corrected because of the payroll tax exemption in the HIRE Act.

The IRS is also planning on updating its website list of frequently-asked questions (FAQs) on the HIRE Act.

(Courtesy of RIA Newsstand 7/7/2010)