CARES ACT: Any delay in filing deadline for Q1 941 and 940?

[Pablo]

CARES ACT: Any delay or relief in filing or payments deadline for Q1 Forms 941 and 940?

[Just-Lisa-Now-]

Not that Ive seen.

[BobKamman]

There's that thing about a free loan on the 6.2% employer share of FICA tax -- I haven't had time to figure out if that applies to first-quarter returns.  I thought I saw somethng that said it's effective on the date of enactment.  

[Pablo]

Thanks to you both. I've seen conflicting info. Most say starts with Q2 moving forward. Another indicated the same for Q1 but I really question it for Q1.

[DKarjane-PayMELLC]

The IRS confirmed the payroll tax deadline of April 30, 2020 remains unchanged even as the IRS moved the income tax deadline from April 15, 2020 to July 15, 2020. However, the IRS automatically provides a 10-day grace period if all the deposit payments were made on time.

[BobKamman]

@DKarjane-PayMELLC   "(i.e., now timely if paid by Dec. 31, 2021/ Dec. 31, 2022 under the CARES Act)"

Absolutely wrong.  The 6.2% employer share of FICA tax is not due until those dates.  The rest of it is due as usual.  

[DKarjane-PayMELLC]

I agree with this clarification. I should have been clearer (and modified my original post to delete the confusing language).

[OzzyTax]

The IRS has now clarified that employers that take loans under the PPP are eligible to defer payments of the employer’s portion of the payroll tax through the date the lender issues a decision to forgive the loan.   The general rule was that if you got a PPP loan you could not defer those taxes.

[Pablo]

Thank you all and perhaps I overlooked some info...

My thinking is still that for Q1 941/940, company still needs to file and pay 100% of both Employer and Employee by usual due dates. No deferral for Q1 Employer portion deposits.

Please advise if this is incorrect. 

Incidentally the company did get PPP funds few days ago. Still owe some for Q1 which I'll advise them to pay ASAP.  As well as Q2 Employee portion.

Stay well

[OzzyTax · Accepted solution]

"The deferral applies to deposits and payments of the employer's share of Social Security tax that would otherwise be required to be made during the period beginning on March 27, 2020, and ending December 31, 2020. (Section 2302 of the CARES Act calls this period the "payroll tax deferral period.") 

The Form 941, Employer's QUARTERLY Federal Tax Return, will be revised for the second calendar quarter of 2020 (April - June, 2020). Information will be provided in the near future to instruct employers how to reflect the deferred deposits and payments otherwise due on or after March 27, 2020 for the first quarter of 2020 (January – March 2020).  In no case will Employers be required to make a special election to be able to defer deposits and payments of these employment taxes."
https://www.irs.gov/newsroom/deferral-of-employment-tax-deposits-and-payments-through-december-31-20... 

[Pablo]

THANKS!! Agreed. I'll encourage company to pay all 941 Q1 deposits now (some are late).

Except for the deposit due a few days after the 3/27 payroll.

And that no Q1 deposits will be eligible for use of PPP funds, especially considered for forgiveness.

[BobKamman]

@Pablo  "I'll encourage company to pay all 941 Q1 deposits now (some are late)."

Keeping in mind that many small employers are not required to make deposits -- they pay the balance due with their 941.  

[Pablo]

Thanks for the reminder on that. The substantial $1M+ payroll is definitely on the weekly deposit schedule.

Although if/when reopen PR might be small enough to qualify for what you mention.

[qbteachmt]

For this: "There's that thing about a free loan on the 6.2% employer share of FICA tax"

That's not quite how it reads.

The various provisions are:

Employer Share of FICA deferred 50% and 50% payment schedule.

Employee Share of FICA and Fed income tax withholding optionally can be retained by an employer who qualifies for the retention credit, Sick/Leave credit, etc, allowing the Employer to keep the funds as an Advance on that credit, or to also use Form 7200 to request the refund if their employee share is not high enough to cover that credit they are entitled to.

The 940 payment is not affected.

The forms are not affected.

[DKarjane-PayMELLC]

FYI: The IRS issued a draft of revised tax Form 941,  Employer's Quarterly Federal Tax Return, for reporting Covid-19 credits and other recent changes.  The revised form is to be used beginning with the second quarter 2020. Here's a link to the draft form:

https://www.irs.gov/pub/irs-dft/f941--dft.pdf

As of 4/30/2020, the associated instructions have not yet been released.

[qbteachmt]

@DKarjane-PayMELLC 

Here is the topic with a listing of links, and the listing I put here has the Revised 941, not your draft version:

https://proconnect.intuit.com/community/coronavirus/discussion/starting-the-list-do-your-own-researc...

[DKarjane-PayMELLC]

@qbteachmt 

Thanks for including this link which I hadn't seen before. It contains some great information!

However, I'm confused by your comment. The IRS just released a new version of form 941 in draft form to incorporate all the recent COVID-19 changes (and for use beginning 2020 2Q). It hasn't been finalized, nor have the associated instructions be released. Here's a link the IRS draft forms:

 https://apps.irs.gov/app/picklist/list/draftTaxForms.html

[qbteachmt]

"However, I'm confused by your comment."

Of course we are! This topic started April 2. Nothing is the same now. I started that other topic as a listing of Links, so that people can put newer links there, other people can follow the links, and everyone does their own research and doesn't expect peer community members here to reinvent the wheel by constantly copying here what is already "there" meaning, at the links for the Source Agencies responsible for the bajillion updates we are getting every day.