How to Amend 941 for ERTC?

As a small business owner, you may be eligible for the Employee Retention Tax Credit (ERTC) to help offset the impact to your business from the COVID-19 pandemic. However, navigating the process of claiming this credit can be confusing, especially when amending Form 941. 



Steps to Amending Form 941 for ERTC

Determine Eligibility

To amend Form 941 for 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 amending Form 941.

Gather Required Information

To amend Form 941 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

Fill Out Form 941-X

Eligible employers can amend Form 941 for ERTC by filling out Form 941-X[2][4][6]. They should fill out their contact details, note the type of return and filing period, check the claim box, complete the certification, and enter the amount of the credit they claim.

Provide a Detailed Explanation

Employers may be required to provide a detailed explanation of how they determined their correction when filing Form 941-X[1][3][4]. This may include information about the qualified wages paid, the decline in gross receipts, or the suspension of operations. Employers should consult with tax professionals to ensure that they provide a detailed explanation that meets the IRS requirements.

Submit the Amended Form 941-X

Once the Form 941-X is completed, employers should submit it to the IRS. The IRS will review the amended form and process any refunds owed to the employer.

It's important to note that filing Form 941-X does not relieve employers of their obligation to pay any additional taxes owed as a result of the correction. Employers may also be subject to penalties and interest charges if they fail to timely file or pay any additional taxes owed[6].

In conclusion, eligible employers can amend Form 941 for ERTC by determining eligibility, gathering required information, filling out Form 941-X, providing a detailed explanation, and submitting the amended form to the IRS. By understanding the eligibility requirements and staying informed about IRS guidelines, eligible employers can use this financial incentive to retain their employees during challenging economic times.