Instructions for Form 941-SS (Rev. January 2019)

1 Instructions for Form 941-SS . Department of the Treasury Internal Revenue Service (Rev. April 2020). Employer's QUARTERLY Federal Tax Return American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the Virgin Islands Section references are to the Internal Revenue Code unless the quarter is reported on line 13f. See the Instructions for otherwise noted. line 13f for more information. The credit for qualified sick and family leave wages Future Developments (reported on lines 11b and 13c) and the employee retention For the latest information about developments related to credit (reported on lines 11c and 13d) are figured on Form 941-SS and its Instructions , such as legislation enacted Worksheet 1.

2 After they were published, go to Don't use the April 2020 revision of Form 941-SS to At the time these Instructions went to print, Congress was ! report employment taxes for the first quarter of 2020. CAUTION Use the January 2020 revision of Form 941-SS to considering changes to some of the recent legislation discussed in these Instructions . If new legislation impacts report employment taxes for the first quarter of 2020. these Instructions , updates will be posted to Form941SS. Reminders What's New Social security and Medicare tax for 2020.

3 The social security tax rate is each for the employee and Changes to Form 941-SS for coronavirus (COVID-19) re- employer, unchanged from 2019. The social security wage lated employment tax credits and other tax relief. The base limit is $137,700. following significant changes have been made to Form The Medicare tax rate is each for the employee 941-SS to allow for the reporting of new employment tax and employer, unchanged from 2019. There is no wage base credits and other tax relief related to COVID-19. limit for Medicare tax.

4 The new credit for qualified sick and family leave wages is reported on line 11b and, if applicable, line 13c. The Social security and Medicare taxes apply to the wages of employee share of social security tax on qualified sick and household workers you pay $2,200 or more in cash wages in family leave wages is reported on lines 5a(i) and 5a(ii). 2020. Social security and Medicare taxes apply to election Qualified sick and family leave wages aren't subject to the workers who are paid $1,900 or more in cash or an employer share of social security tax.

5 Qualified sick and equivalent form of compensation in 2020. family leave wages not included on lines 5a(i) and 5a(ii) Qualified small business payroll tax credit for increas- because the wages reported on that line are limited by the ing research activities. For tax years beginning after 2015, social security wage base, are included on line 5c. Qualified a qualified small business may elect to claim up to $250,000. health plan expenses allocable to sick and family leave of its credit for increasing research activities as a payroll tax wages are reported on lines 19 and 20.

6 See the Instructions credit against the employer share of social security tax. The for line 11b for information about the new credit for qualified payroll tax credit must be elected on an original income tax sick and family leave wages. return that is timely filed (including extensions). The portion The new employee retention credit is reported on line 11c of the credit used against the employer share of social and, if applicable, line 13d. Qualified wages (excluding security tax is allowed in the first calendar quarter beginning qualified health plan expenses) for the employee retention after the date that the qualified small business filed its credit are reported on line 21 (these amounts should also be income tax return.)

7 The election and determination of the included as wages on lines 5a and 5c, and, if applicable, credit amount that will be used against the employer share of line 5d). Qualified health plan expenses allocable to the social security tax are made on Form 6765, Credit for qualified wages for the employee retention credit are Increasing Research Activities. The amount from Form 6765, reported on line 22. For the second quarter Form 941-SS line 44, must then be reported on Form 8974, Qualified Small only, qualified wages (excluding qualified health plan Business Payroll Tax Credit for Increasing Research expenses) for the employee retention credit and qualified Activities.

8 Form 8974 is used to determine the amount of the health plan expenses allocable to the qualified wages for the credit that can be used in the current quarter. The amount period from March 13, 2020, to March 31, 2020, are reported from Form 8974, line 12, is reported on Form 941-SS , on lines 24 and 25, respectively. See the Instructions for line line 11a. If you're claiming the research payroll tax credit on 11c for information about the new employee retention credit. your Form 941-SS , you must attach Form 8974 to that Form Employers, including government employers, can defer 941-SS .

9 For more information about the payroll tax credit, the deposit and payment of the employer share of social see Notice 2017-23, 2017-16 1100, available at security tax otherwise due during the calendar quarter. The #NOT-2017-23, and amount of deferral is reported on line 13b. See the ResearchPayrollTC. Also see Adjusting tax liability for Instructions for line 13b for more information. nonrefundable credits claimed on lines 11a, 11b, and 11c, Employers that requested an advance of the sick and later. family leave credit and/or the employee retention credit would have filed a Form 7200, Advance Payment of Certification program for professional employer organi- Employer Credits Due to COVID-19, for the quarter.

10 The zations (PEOs). The Stephen Beck, Jr., ABLE Act of 2014. amount of all advances received from Forms 7200 filed for required the IRS to establish a voluntary certification program for PEOs. PEOs handle various payroll administration and Jun 26, 2020 Cat. No. 35530F. tax reporting responsibilities for their business clients and are CPEO. CPEOs file Form 8973, Certified Professional typically paid a fee based on payroll costs. To become and Employer Organization/Customer Reporting Agreement, to remain certified under the certification program, certified notify the IRS that they started or ended a service contract professional employer organizations (CPEOs) must meet with a customer.