COVID-19-Related Quarterly Filing – Form 941 and Form 7200 - Paychex
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 and 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 information 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
Trade name (if any)
2: April, May, June 3: July, August, September
Address Number
Street
Suite or room number
4: October, November, December
Go to Form941 for instructions and the latest information.
City
State
ZIP code
Foreign country name
Foreign province/county
Foreign postal code
Read the separate instructions before you complete Form 941. Type or print within the boxes. 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 Total taxes after adjustments and nonrefundable credits. Subtract line 11d from line 10 . 12
.
13a 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
13c Refundable portion of credit for qualified sick and family leave wages from Worksheet 1 13c
. the following for
COVID-19 related
13d Refundable portion of employee retention credit from Worksheet 1 . . . . . . . . 13d
. employer social
security (SS) tax:.
13e Total deposits, deferrals, and refundable credits. Add lines 13a, 13b, 13c, and 13d . . . 13e
. ? Any employer
13f Total advances received from filing Form(s) 7200 for the quarter . . . . . . . . . 13f 13g Total deposits, deferrals, and refundable credits less advances. Subtract line 13f from line 13e . 13g
. 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 If you're a seasonal employer and you don't have to file a return for every quarter of the year . . . 19 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 21 Qualified wages for the employee retention credit . . . . . . . . . . . . . 21 22 Qualified health plan expenses allocable to wages reported on line 21 . . . . . . . 22 23 Credit from Form 5884-C, line 11, for this quarter . . . . . . . . . . . . . 23
. Additional lines have been
added to report:
.
? Qualified health plan
. expenses on qualified
sick leave wages
(Line 19)
.
24 Qualified wages paid March 13 through March 31, 2020, for the employee retention credit (use this line only for the second quarter filing of Form 941) . . . . . . . . 24
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
. ? Qualified health plan expenses on qualified
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 updated 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 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 second quarter federal 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
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