How it’s done: Recover the ERC using Form 941-X
If you’ve already filed IRS Form 941 — otherwise known as the Employer’s Quarterly Federal Tax Return — for 2020 and 2021, you may think you’ve missed the boat for claiming the Employee Retention Credit (ERC) for your business. That would be a shame, because the ERC could potentially put hundreds of thousands of dollars back into your business. The good news is that it’s not too late for eligible businesses to apply for the ERC.
So how can you unlock this valuable resource? Form 941-X. This handy little form amends your originally filed Form 941. Here’s how eligible businesses can still amend Form 941 for the Employee Retention Credit.
What is a 941-X Form?
Although there is no employee retention credit for 2022, Form 941-X can be used to correct employment taxes that you’ve already filed — including for the 2020 and 2021 years that may be eligible for the ERC.
In other words, Form 941-X is an amendment to the Employer’s Quarterly Federal Tax Return form that can be filed to correct any mistakes or make legal changes to your Form 941.
How to fill out Form 941-X to get the Employee Retention Credit
First, Form 941 is quarterly, which means that you would have filed this tax form for each quarter of the year, and you’ll need to fill out a separate 941-X per qualifying quarter to amend for the Employee Retention Tax Credit of 2020 and 2021 (since the ERC has ended). That means you may be filling out seven amendment forms in total.
Steps to fill out Form 941-X:
- Fill out the “company information” on each page.
- Fill out the section, “Return You’re Correcting.”
- Include the date that you discovered you were ERC eligible (your “error”).
- Checkmark “Claim” in the “Adjusted Employment Tax Return” Part 1 section.
- Checkmark “d.” under “Complete the Certifications” Part 2 section.
- Use worksheets to fill out the Non-Refundable Portion (Line 18) and Refundable Portion (Line 26).
- Do the math to make sure of your totals on Line 30 and Line 31.
- Explain that your business is eligible for the payroll tax refund on Line 37.
For a general explanation of how to fill out the amendment form, you can check the IRS video.
Unfortunately, this video doesn’t cover specifically filling out 941-X for the Employee Retention Tax Credit, so you’ll have to be careful that you’ve accurately ticked the right boxes and provided all necessary information.
It’s no secret that these forms can be a bit daunting and difficult to get right. Hiring a highly trained tax professional that is part of our independent network can help assure that all paperwork is filled out correctly, so, if eligible for the ERC, you get your company’s ERC refund approved the first time around.
What you should know before filing Form 941-X
The deadline for filing Form 941-X
You can still claim the Employee Retention Tax Credit using Form 941-X up to three years from the date you originally filed Form 941, or two years from when you paid the tax reported on Form 941 — whichever is later. This means that for some businesses, the deadline to secure the ERC could be 2024.
How to file Form 941-X
Although the original Form 941 can be e-filed, you cannot file the amended form online. You’ll need to print paper copies and mail them to request the refund. That would be a good time to check if you need to take any other steps for the ERC. If there are any mistakes or missing information during the ERC filing process, you could face IRS processing delays.
Where to mail Form 941-X
The address needed to mail your form depends on where your business is located. There are two different Department of the Treasury addresses assigned by state, plus an Internal Revenue Service Address if you have no principal place of business.
Let Innovation Refunds make your small business’ life easier
Gathering the proper paperwork and correctly filing Form 941-X can be a hassle. And, if you improperly file for the ERC, you potentially face having to repay the credit amount, additional penalties, and accrued interest.
Working with an ERC originator that lives and breathes ERC legislation offers eligible businesses an easy way to facilitate your business payroll tax refund. Innovation Refunds has a network of independent tax attorneys, CPAs, and tax professionals that aim to help businesses unlock maximum refunds via the Employee Retention Tax Credit. It takes around 8 minutes to determine whether IR can help your business qualify for ERC assistance.
