Form 941

Question

I don't know if anyone knows this....I do payroll for a few clients. I don't use any software, because they all charge too much for what they offer. (Or, better put, I have developed my own software for paper-filing of the forms).But this quarter, with the COVID credit... The IRS says we're supposed to claim any payroll expenses paid after 3/12/20 on the 2nd quarter return.Two questions: 1. Does anyone know exactly how that works? I mean, practical "this is how you do it," not concepts, which I get.2. What about states? Are they also allowing us to put 3/12-3/31 payroll on 2nd quarter, or do we essentially have to run 2 different payroll periods, one for federal and one for state?Bonus question: does anyone know if QuickBooks' tax program does this correctly?

qbteachmt · Accepted Answer

Thank you, and it's clear you put a lot of time and effort into preparing that document.

I'm still not seeing anything that mentions a FICA deferral, specifically. Are you speaking of the ERC, which doesn't mention a FICA deferral specifically, but seems to imply it? Or is there something I'm missing? (I'm somewhat visually impaired, so I will completely accept that I'm just not seeing it. No matter how big I blow up the screen, sometimes I just miss things. It's really fun when people say, "It's right there, are you BLIND?" and I can answer, "Yes, I am, and thank you.")

"I'm still not seeing anything that mentions a FICA deferral"

More links, then (and I put them in that Listing topic, because I like one resource, in one place, for everyone to access. Feel free to post your own links there...):

https://www.irs.gov/newsroom/deferral-of-employment-tax-deposits-and-payments-through-december-31-2020

https://www.irs.gov/pub/irs-drop/n-20-22.pdf

https://www.irs.gov/coronavirus/employee-retention-credit

https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act

"What are the applicable dates by which deferred deposits of the employer's share of social security tax must be deposited to be treated as timely (and avoid a failure to deposit penalty)?

The deferred deposits of the employer's share of social security tax must be deposited by the following dates (referred to as the "applicable dates") to be treated as timely (and avoid a failure to deposit penalty):

On December 31, 2021, 50 percent of the deferred amount; and
On December 31, 2022, the remaining amount."

The deferral is not available to an employer using certain of the other provisions, however.

"May an Eligible Employer receive both the tax credits for the qualified leave wages under the FFCRA and the Employee Retention Credit under the CARES Act?

Yes, but not for the same wages. The amount of qualified wages for which an Eligible Employer may claim the Employee Retention Credit does not include the amount of qualified sick and family leave wages for which the employer received tax credits under the FFCRA.

May an Eligible Employer receive both the Employee Retention Credit and a Small Business Interruption Loan under the Paycheck Protection Program that is authorized under the CARES Act?

No. An Eligible Employer may not receive the Employee Retention Credit if the Eligible Employer receives a Small Business Interruption Loan under the Paycheck Protection Program that is authorized under the CARES Act (“Paycheck Protection Loan”). An Eligible Employer that receives a paycheck protection loan should not claim Employee Retention Credits."

"For each employee, wages (including certain health plan costs) up to $10,000 can be counted to determine the amount of the 50% credit. Because this credit can apply to wages already paid after March 12, 2020, many struggling employers can get access to this credit by reducing upcoming deposits or requesting an advance credit on Form 7200, Advance of Employer Credits Due To COVID-19."

"Impact of other credit and relief provisions

An eligible employer's ability to claim the Employee Retention Credit is impacted by other credit and relief provisions as follows:

If an employer receives a Small Business Interruption Loan under the Paycheck Protection Program, authorized under the CARES Act, then the employer is not eligible for the Employee Retention Credit.
Wages for this credit do not include wages for which the employer received a tax credit for paid sick and family leave under the Families First Coronavirus Response Act.
Wages counted for this credit can't be counted for the credit for paid family and medical leave under section 45S of the Internal Revenue Code.
Employees are not counted for this credit if the employer is allowed a Work Opportunity Tax Credit under section 51 of the Internal Revenue Code for the employee."

And:

"In anticipation of claiming the credit, employers can retain a corresponding amount of the employment taxes that otherwise would have been deposited, including federal income tax withholding, the employees' share of Social Security and Medicare taxes, and the employer's share of Social Security and Medicare taxes for all employees, up to the amount of the credit, without penalty, taking into account any reduction for deposits in anticipation of the paid sick and family leave credit provided in the Families First Coronavirus Response Act (PDF).

Eligible employers can also request an advance of the Employee Retention Credit by submitting Form 7200."

Hope that helps. All of this is meant to be Easy to read to find out what you specifically need to research further. I am not making any comprehensive information available here, since it likely won't stay timely to updates.

BobKamman · Answer

I think people here are talking about two different things.  There is the deferred payment of employer half of FICA tax, which I think applies to wages paid in late March.  And then there is the credit, claimed on Form 7200, for all of the wages paid to certain employees in certain circumstances.  Does Form 7200 have anything to do with deferred payment of FICA?  I'll take another look after this week.

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