How to Fill Out 941-X for ERTC?

Form 941-X is used to correct errors on previously filed Form 941 and claim the Employee Retention Tax Credit (ERTC)[1][3][4].

Here are some important steps to follow when filling out Form 941-X for ERTC:

Determine Eligibility

To claim the ERTC, eligible employers must have experienced a significant decline in gross receipts or a full or partial suspension of operations due to government orders related to COVID-19[2][3][4][5][6]. Employers should ensure that they meet the eligibility criteria before applying for the credit.

Gather Required Information 

To fill out Form 941-X for ERTC, employers will need to gather the following information:

• Original Form 941 for the quarter(s) in which the qualified wages were paid
• Payroll records for the quarter(s) in which the qualified wages were paid
• Form 941-X
• Form 5884-C

Complete Form 941-X

To complete Form 941-X for ERTC, employers should follow these steps:

• Fill in the required information on the page header, such as company name, EIN number, quarter and year.
• Determine which payroll quarters in 2020 and 2021 your business qualifies for.
• For all quarters you qualify for, get your original 941, a blank 941-X, and payroll journals for each quarter.
• Fill out your company info. Select the Return You’re Correcting (941), and the quarter and year you’re correcting.
• Complete Part 1 of Form 941-X, which includes information about the original Form 941 and the corrections being made.
• Complete Part 2 of Form 941-X, which includes information about the ERTC being claimed.
• Complete Part 3 of Form 941-X, which includes information about the adjustments to the original Form 941.
• Complete Part 4 of Form 941-X, which includes information about the overpayment or underpayment of taxes.
• Complete Part 5 of Form 941-X, which includes information about the refund or balance due.

Submit Form 941-X

Once Form 941-X is completed, employers should submit it to the IRS along with any required documentation.

It's important to note that the ERTC has undergone updates and changes since its introduction. Employers should stay updated with the latest IRS guidance and consult with tax professionals to ensure compliance with eligibility requirements and maximize the benefits of the credit[1][4][5][6].

In conclusion, eligible employers can fill out Form 941-X to correct errors on previously filed Form 941 and claim the Employee Retention Tax Credit (ERTC). By understanding the eligibility requirements and staying informed about IRS guidelines, eligible employers can take advantage of this financial incentive to retain their employees during challenging economic times.