Page 60 - IRS Tools for Small Businesses Guide

9:15 - 21-Jun-2022
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Fileid: … ns/i941x/202204/a/xml/cycle07/source
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2. Enter the corrected amount from column 1 on you used section 3509 rates on lines 19–22 for any worker
Worksheet 3, Step 2, line 2g. reclassified as an employee, explain why section 3509
Be sure to explain the reasons for this correction on rates apply and what rates you used.
line 43. Return not filed because you didn’t treat any workers
39. Qualified Health Plan Expenses Allocable to as employees. If you didn’t previously file Form 941
because you mistakenly treated all workers as
Qualified Family Leave Wages for Leave Taken independent contractors or as nonemployees, file a Form
After March 31, 2021, and Before October 1, 941 for each delinquent quarter.
2021 On each Form 941 for which you’re entitled to use
If you’re correcting the qualified health plan expenses section 3509 rates, complete the following steps.
allocable to qualified family leave wages for leave taken • Write “Misclassified Employees” in bold letters
after March 31, 2021, and before October 1, 2021, that across the top margin of page 1.
you reported on Form 941, line 27, enter the total • Enter a zero on line 12.
corrected amount for all employees in column 1. In • Complete the signature area.
column 2, enter the amount you originally reported or as • Attach a completed Form 941-X (see instructions next).
previously corrected. In column 3, enter the difference On each Form 941-X, complete the following steps.
between columns 1 and 2. Enter the corrected amount • Complete the top of Form 941-X, including the date you
from column 1 on Worksheet 3, Step 2, line 2h. discovered the error.
Be sure to explain the reasons for this correction on • Enter the wage amounts on lines 19–22, column 1.
• Enter zeros on lines 19–22, column 2.
line 43. • Complete columns 3 and 4 as instructed in Part 3.
40. Amounts Under Certain Collectively • Provide a detailed statement on line 43.
Bargained Agreements Allocable to Qualified • Complete the signature area.
Family Leave Wages for Leave Taken After If you can’t use section 3509 rates (for example,
March 31, 2021, and Before October 1, 2021 ! because the workers you treated as
nonemployees were certain statutory employees),
CAUTION
If you’re correcting the amounts under certain collectively file a Form 941 for each delinquent quarter. Write
bargained agreements allocable to qualified family leave “Misclassified Employees” in bold letters across the top
wages for leave taken after March 31, 2021, and before margin of page 1 of each Form 941. Complete Form 941
October 1, 2021, that you reported on Form 941, line 28, using the Instructions for Form 941. Attach a Form 941-X
enter the total corrected amount for all employees in to each Form 941. Complete the top of Form 941-X,
column 1. In column 2, enter the amount you originally including the date you discovered the error, and provide a
reported or as previously corrected. In column 3, enter the detailed explanation on line 43.
difference between columns 1 and 2. Enter the corrected
amount from column 1 on Worksheet 3, Step 2, line 2i. 43. Explain Your Corrections
Be sure to explain the reasons for this correction on Treasury regulations require you to explain in detail the
line 43. grounds and facts relied upon to support each correction.
Part 4: Explain Your Corrections for On line 43, describe in detail each correction you entered
This Quarter in column 4 on lines 7–22, and lines 24–26c. Also use
line 43 to describe corrections made on line 6 and lines
28–40. If you need more space, attach additional sheets,
41. Corrections of Both Underreported and but be sure to write your name, EIN, “Form 941-X,” the
Overreported Amounts quarter you’re correcting (for example, “Quarter 2”), and
Check the box on line 41 if any corrections you entered on the calendar year of the quarter you’re correcting on the
lines 7–26c, or lines 28–31a, or lines 32–40, column 3, top of each sheet.
reflect both underreported and overreported amounts. You must describe the events that caused the
Example. If you had an increase to social security underreported or overreported amounts. Explanations
wages of $15,000 for Xavier Black and a decrease to such as “social security and Medicare wages were
social security wages of $5,000 for Sophie Rose, you overstated” or “administrative/payroll errors were
would enter $10,000 on line 8, column 3. That $10,000 discovered” or “taxes were not withheld” are insufficient
represents the net change from corrections. and may delay processing your Form 941-X because the
On line 43, you must explain the reason for both the IRS may need to ask for a more complete explanation.
$15,000 increase and the $5,000 decrease. Provide the following information in your explanation for
42. Did You Reclassify Any Workers? each correction.
Check the box on line 42 if you reclassified any workers to • Form 941-X line number(s) affected.
be independent contractors or nonemployees. Also check • Date you discovered the error.
this box if the IRS (or you) determined that workers you • Difference (amount of the error).
treated as independent contractors or nonemployees • Cause of the error.
should be classified as employees. On line 43, give us a You may report the information in paragraph form. The
detailed reason why any worker was reclassified and, if following paragraph is an example.

Instructions for Form 941-X (Rev. 4-2022) -25-