COVID-19-Related Quarterly Filing – Form 941 and Form 7200

COVID-19-Related Quarterly Filing ? Form 941 and Form 7200

During the COVID-19 pandemic, The Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act both provide refundable tax credits for qualifying wages for:

? Employee Retention Tax Credit (CARES Act) ? Refund of wages paid for qualified sick leave (FFCRA) ? Refund of wages paid for qualified expanded family leave (FFCRA) As a result, the second quarter 2020 Form 941 has been extensively revised. Two other factors that may affect this return are:

? Filing Form(s) 7200 ? Employer Deferral of Social Security Tax For more detail on these topics, go to the Customer Support during COVID-19 FAQs on .

The second quarter 2020 Form 941 is due on July 31, 2020, and Paychex is prepared to file the new return.

What's New with Form 941?

There is now a Worksheet included with the return titled Credit for Sick and Family Leave Wages and the Employee Retention Credit.

Based on the information you reported to Paychex, we'll complete the worksheet and use this information to complete the revised 941. The IRS is not requiring the worksheet to be filed with the return, we'll retain it in our records for your account in the event we need to refer to this information in the future.

941 Return

We'll complete the updated Form 941 based on the information you've reported to Paychex, including:

? Qualified wages for qualified sick leave and family leave wages

? Qualified health plan expenses on qualified sick land family leave wages

? Qualified wages for the employee retention credit

? Qualified health plan expenses on wages reported for the employee retention credit

? Employer social security tax you've deferred

? Advances received from filing Forms(s) 7200

Important ? We'll report this information based on what you've reported to Paychex, including any advances you've received from filing Form(s) 7200. Refer to the Form 7200 section for additional about what we need from you.

The 941 has been expanded to three pages to accommodate additional reporting for COVID-19 related wages and employer tax credits

Schedule B

Schedule B for semiweekly schedule depositors has also been revised. Schedule B amounts will be reduced by the employer social security tax credits based on the information you reported to Paychex.

Form 941 for 2020: Employer's QUARTERLY Federal Tax Return

(Rev. April 2020)

Department of the Treasury -- Internal Revenue Service

950120

OMB No. 1545-0029

Employer identification number (EIN)

--

Report for this Quarter of 2020

(Check one.)

Name (not your trade name)

1: January, February, March

DRAFT Trade name (if any)

Address Number

Street

AS Suite or room number

2: April, May, June

OF 3: July, August, September 4: October, November, December

Go to Form941 for instructions and the latest information.

April 29, 2020 City

Foreign country name

State Foreign province/county

ZIP code Foreign postal code

Read the separate instructions before you complete Form 941. Type or print within the boxes.

DO NOT FILE Part 1: Answer these questions for this quarter. 1 Number of employees who received wages, tips, or other compensation for the pay period including: June 12 (Quarter 2), Sept. 12 (Quarter 3), or Dec. 12 (Quarter 4) . . . 1

2 Wages, tips, and other compensation . . . . . . . . . . . . . . . . . 2

.

3 Federal income tax withheld from wages, tips, and other compensation . . . . . . 3

.

4 If no wages, tips, and other compensation are subject to social security or Medicare tax

Check and go to line 6.

5a Taxable social security wages . . 5a (i) Qualified sick leave wages . . 5a (ii) Qualified family leave wages . 5b Taxable social security tips . . . 5c Taxable Medicare wages & tips. . 5d Taxable wages & tips subject to

Additional Medicare Tax withholding

Column 1

. . . . .

.

? 0.124 = ? 0.062 = ? 0.062 = ? 0.124 = ? 0.029 =

? 0.009 =

Column 2

. Line 5 has been expanded to include reporting . qualified sick leave and family leave wages your . business paid for COVID-19 from April 1 to June 30,

2020, for social security tax. These wages aren't

. subject to the employer share of social security tax.

. Note: These wages are still subject to the employer

share of Medicare tax.

.

5e Total social security and Medicare taxes. Add Column 2 from lines 5a, 5a(i), 5a(ii), 5b, 5c, and 5d 5e

.

5f Section 3121(q) Notice and Demand--Tax due on unreported tips (see instructions) . . 5f

.

6 Total taxes before adjustments. Add lines 3, 5e, and 5f . . . . . . . . . . . . 6

.

7 Current quarter's adjustment for fractions of cents . . . . . . . . . . . . . 7

.

8 Current quarter's adjustment for sick pay . . . . . . . . . . . . . . . . 8

.

9 Current quarter's adjustments for tips and group-term life insurance . . . . . . . 9

.

10 Total taxes after adjustments. Combine lines 6 through 9 . . . . . . . . . . . 10

.

. Line 11 has been expanded to include

11a Qualified small business payroll tax credit for increasing research activities. Attach Form 8974the11naonrefundable portion of employer

. social security tax for qualified sick and

11b Nonrefundable portion of credit for qualified sick and family leave wages from Worksheet 1fam11ilby leave wages and the employee

. retention credit for COVID-19.

11c Nonrefundable portion of employee retention credit from Worksheet 1 . . . . . . 11c

You MUST complete all three pages of Form 941 and SIGN it. For Privacy Act and Paperwork Reduction Act Notice, see the back of the Payment Voucher.

Cat. No. 17001Z

Next

Form 941 (Rev. 4-2020)

Name (not your trade name)

950220

Employer identification number (EIN)

Part 1: Answer these questions for this quarter. (continued)

11d Total nonrefundable credits. Add lines 11a, 11b, and 11c . . . . . . . . . . . 11d

.

12 13a

DRAFT AS OF Total taxes after adjustments and nonrefundable credits. Subtract line 11d from line 10 . 12

Total deposits for this quarter, including overpayment applied from a prior quarter and overpayments applied from Form 941-X, 941-X (PR), 944-X, or 944-X (SP) filed in the current quarter 13a

. .

13b Deferred amount of the employer share of social security tax . . . . . . . . . 13b

. Line 13 has been

expanded to include

April 29, 2020 13c Refundable portion of credit for qualified sick and family leave wages from Worksheet 1 13c

13d Refundable portion of employee retention credit from Worksheet 1 . . . . . . . . 13d

. the following for

COVID-19 related

. employer social

security (SS) tax:.

13e 13f 13g

. Total deposits, deferrals, and refundable credits. Add lines 13a, 13b, 13c, and 13d . . . 13e . Total advances received from filing Form(s) 7200 for the quarter . . . . . . . . . 13f

DO NOT FILE . Total deposits, deferrals, and refundable credits less advances. Subtract line 13f from line 13e . 13g

? Any employer SS tax that you've deferred

? The refundable

14 Balance due. If line 12 is more than line 13g, enter the difference and see instructions . . . 14

. portion of

employer SS tax

15 Overpayment. If line 13g is more than line 12, enter the difference

.

Part 2: Tell us about your deposit schedule and tax liability for this quarter.

Check one:

for qualified sick

Apply to next return.

Send a refund.

and family leave

wages

If you're unsure about whether you're a monthly schedule depositor or a semiweekly schedule depositor, see se? ctTiohne1r1efoufnPduabb. 1le5.

16 Check one:

Line 12 on this return is less than $2,500 or line 12 on the return for the prior quarter waspolerstsiotnhaonf $th2,e500,

and you didn't incur a $100,000 next-day deposit obligation during the current quarter. If line 12 for the prior

quarter was less than $2,500 but line 12 on this return is $100,000 or more, you must provideemaprleocyoerde of your

federal tax liability. If you're a semiweekly schedule depositor,

monthly schedule depositor, complete the attach Schedule B (Form 941). Go to Part 3.

deposit

schedulerebteelonwti;oinf ycorue'dreita

You were a monthly schedule depositor for the entire quarter. Enter your tax liability for ?eaAchdvmaonncthesand total

liability for the quarter, then go to Part 3.

received from

Tax liability: Month 1

.

Month 2

.

filing Forms (s) 7200

Month 3

.

Total liability for quarter

.

Total must equal line 12.

You were a semiweekly schedule depositor for any part of this quarter. Complete Schedule B (Form 941), Report of Tax Liability for Semiweekly Schedule Depositors, and attach it to Form 941. Go to Part 3.

You MUST complete all three pages of Form 941 and SIGN it.

Page 2

Next

Form 941 (Rev. 4-2020)

Name (not your trade name)

950920

Employer identification number (EIN)

Part 3: Tell us about your business. If a question does NOT apply to your business, leave it blank. 17 If your business has closed or you stopped paying wages . . . . . . . . . . . . . . .

Check here, and

enter the final date you paid wages

/ /

; also attach a statement to your return. See instructions.

18 19

DRAFT AS OF . If you're a seasonal employer and you don't have to file a return for every quarter of the year . . .

Qualified health plan expenses allocable to qualified sick leave wages . . . . . . 19

Check here.

20 Qualified health plan expenses allocable to qualified family leave wages . . . . . . 20

. Additional lines have been

21 22

April 29, 2020 Qualified wages for the employee retention credit . . . . . . . . . . . . . 21

Qualified health plan expenses allocable to wages reported on line 21 . . . . . . . 22

added to report:

.

? Qualified health plan

. expenses on qualified

sick leave wages

23 24

. Credit from Form 5884-C, line 11, for this quarter . . . . . . . . . . . . . 23

Qualified wages paid March 13 through March 31, 2020, for the employee retention

DO NOT FILE . credit (use this line only for the second quarter filing of Form 941) . . . . . . . . 24

(Line 19)

? Qualified health plan expenses on qualified

25 Qualified health plan expenses allocable to wages reported on line 24 (use this line only for the second quarter filing of Form 941) . . . . . . . . . . . . . . . . 25

family leave wages

(Lines 20)

.

? Qualified wages Part 4: May we speak with your third-party designee?

Do you want to allow an employee, a paid tax preparer, or another person to discuss this return with the IRS?fSoeretthhee iensmtrupcltoioynese

for details.

retention credit

Yes. Designee's name and phone number

(Lines 21)

Select a 5-digit personal identification number (PIN) to use when talking to the IRS.

? Qualified health plan expenses on wages

No.

reported for the

Part 5: Sign here. You MUST complete all three pages of Form 941 and SIGN it.

employee retention

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to thecrbeesdtiotf my knowledge

and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

(Lines 22)

Sign your name here

Print your name here

Print your title here

? Qualified health plan expenses for Employee Retention

Date

/ /

Best daytime phone

Credit wages paid from March 13 to

Paid Preparer Use Only

March 31, 2020 Check if you're self-emp(loLyinedes 24. ) . .

Preparer's name

Preparer's signature Firm's name (or yours if self-employed) Address

City

Page 3

State

PTIN Date EIN Phone ZIP code

? Qualified wages paid for the employee

/ rete/ntion credit from March 13 to March 31, 2020. This is only valid for the second quarter 2020 941 to report these credits that were incurred for COVID-19 in firFsotrmq9u4a1rt(eRerv2. 40-220020) (Lines 25)

Resources

The following are the links to the draft versions of the 941 worksheet and return

? 941 Return

? Instructions for Form 941, including the Worksheet for Credit for Sick and Family Leave Wages and the Employee Retention Credit

Form 7200

If you have elected to receive a tax credit Paychex will apply the amount of the credits to your federal tax liability each time you process payroll, which in most cases is the quickest way to access the credit. If the amount of the credit exceeds the federal liability, and you choose not to carry the credit forward to the liability for the next check date, you can complete one or more Forms 7200 (Advance Payment of Employer Credits Due to COVID-19) to apply for an accelerated credit from the IRS.

New Employer Social Security Tax Deferral Information

On June 3, 2020, the PPP Flexibility Act was passed. As part of this Act, if you received a Paycheck Protection Program (PPP) Loan, you can defer deposit and payment of your share of social security tax for until December 31, 2020, whether or not your loan was forgiven. Previously, you could only defer deposit and payment of this tax until your PPP loan was forgiven.

As a reminder, the amount of deposit and payment of your share of social security that was deferred will be due as follows: 50% due by December 31, 2021, and the remaining 50% due by December 31, 2022 or as otherwise set forth in the FFCRA/CARES Act tax credits and deferrals addendum to the service agreement between you and Paychex.

Work Opportunity Tax Credit

? Work Opportunity Tax Credit (WOTC) (section 51 of the Internal Revenue Code): No wages used for WOTC are eligible for COVID-19 tax credits.

Important Form 7200 Filing Information

If you file Form 7200, you must inform Paychex as set forth below. If you do not inform Paychex that you filed these forms, you likely will incur penalties assessed by the IRS and your federal second quarterly returns will be incorrect because Paychex will be applying your COVID-19 tax credits when you process payroll. You will be solely responsible for any penalties and interest assessed. Before you decide to file a Form 7200 evaluate whether it is a benefit to you as Paychex is applying your COVID-19 tax credits when you process payroll.

What You Need to Do

Provide Paychex with the following

? A copy of all Forms 7200 as soon as possible, but no later than Tuesday, June 30, 2020

? Contact name, phone number, and email address ? Date you filed the Form 7200 ? Quarter Form 7200 was filed for

What Paychex Will Do

? Report your Form 7200 information on the second quarter federal returns based on what you reported

? 2020 Paychex, Inc. All Rights Reserved. | 6/5/20

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