The IRS has released a revised version of Form 941 for 2024. As an employer, it’s crucial to stay updated on the latest changes in this form, as it is essential for reporting tax withholdings. Below, we’ll discuss the key updates to Form 941 and what you need to know before filing it.
What is Form 941?
Form 941, also known as the Employer’s Quarterly Federal Tax Return, is used by businesses to report Federal, Social Security, and Medicare (FICA) taxes withheld from employee paychecks. This form contains crucial information such as wages, the number of employees, and the amounts of Federal, Social Security, and Medicare taxes withheld.
What’s New in Form 941 for 2024?
Here are some of the changes made by the IRS to the revised Form 941 for the 2024 tax year:
1) Modifications in Social Security and Medicare Tax
- The Social Security wage base limit has increased from $160,200 to $168,600, but the tax rate remains at 6.2%.
- The Medicare tax rate is unchanged, with no wage base limits.
- Household employees earning over $2,700 and election workers earning over $2,300 are subject to FICA taxes.
2) Elimination of COVID-19-Related Credits
Employers can no longer claim COVID-19-related tax credits for sick leave and family leave wages. This change reflects the expiration of those credits.
NOTE:
If you’ve mistakenly claimed a credit under this rule, you can withdraw the claim by completing Form 941-X (Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund). Ensure that you’ve already filed Form 941 before submitting Form 941-X.
3) Forms 941-SS and 941-PR are Terminated for 2024
- Form 941-SS-Employer’s QUARTERLY Federal Tax Return — American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands and Form 941-PR–Planilla para la Declaración Federal TRIMESTRAL del Patrono is no longer available.
- As an alternative, the IRS has introduced a new form called Form 941-SP Where the information and instructions are provided in Spanish. Any employers in the U.S. who prefer their form to be in Spanish should choose Form 941-SP.
4)Publication. 51, 80, and 179 has removed from 2024
- Pub. 51, Agricultural Employer’s Tax Guide; Pub. 80, Federal Tax Guide for Employers in the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands; and Pub. 179, Guía Contributiva Federal para Patronos Puertorriqueños, is no longer needed from 2024.
- Additionally, the information regarding the agricultural employers and employers in the U.S. territories will be declared in the Publication15 Employer’s Tax Guide.
- New Publication 15 (SP), a Spanish-language version of Pub. 15, has been introduced by the IRS.
5)Payroll tax credit for specific tax-exempt organizations affected by qualified disasters.
Employers affected by qualified natural disasters (excluding COVID-19) can claim a payroll tax credit using Form 5884-D.
Who is Required to File Form 941?
Generally, employers and business owners who pay their employees taxable wages should file Form 941 for every quarter. Any business which owes more than $1000 for social security and medicare taxes should file this form. It is mandatory for every employer to file Form 941.
Exceptions to this filing requirement are mentioned here
- Seasonal employers don’t have to file a Form 941 for quarters because they have no tax liability.
- Employers of household employees don’t want to file Form 941.
- Employers of farm employees don’t want to file the Form 941.
Quarterly Deadlines for Form 941
The deadline for the Form 941 can be different for each quarter. Employers are required to know the deadlines of every quarter in Form 941. The deadlines are listed below.
| Quarters & Reporting period | 941-Deadline |
| Quarter 1 – Jan, Feb, Mar | Apr 30, 2024 |
| Quarter 2 – Apr, May, June | Jul 31, 2024 |
| Quarter 3 – July, Aug, Sep | Oct 31, 2024 |
| Quarter 4 – Oct, Nov, Dec | Jan 31, 2024 |
NOTE:
If any of the deadlines above fall on a federal holiday or weekend, the following business day will be considered as the deadline.
Penalties for Not Filing Form 941
If the employers fail to meet the deadline, they will have some penalty to be paid. The penalties are listed below
| PENALTIES | DESCRIPTION |
| Initial penalties | The initial penalty ranges from 5% when you fail to file form 941. |
| Additional penalties | If your business continuously fails to file, an additional 5% penalty will be declared for every month for up to 5 months |
| Interest in a continued penalty | If the business is not filed within 5 months interest amount will be imposed on the total earned penalty. |
| Late payment penalty | If the business fails to make payments to the IRS, the penalty ranges from 2% – 15%. |
Conclusion
Keeping up with the latest changes in Form 941 is vital for businesses to ensure accurate tax reporting and compliance. The revisions for the 2024 tax year bring notable updates.By understanding these changes, businesses can avoid penalties, ensure timely filing, and maintain compliance with IRS requirements. It’s crucial for employers to carefully review the updated form and make necessary adjustments to their payroll and tax processes. If you have any uncertainties, consulting a tax professional can help navigate these changes effectively.
Staying informed and proactive in addressing these changes will help businesses stay on track for the 2024 tax year and beyond. If you are unsure about how to file your Form 941, you can either paper file or e-file. The IRS recommends taxpayers to e-file 941 for more secure and accurate filing. Get started with your 941 filing today to stay compliant with the IRS and avoid penalties.
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