Friday, March 4, 2011

IRS Releases Draft Version of 2011 Form 941

The IRS has posted a draft version of the 2011 Form 941, Employer's Quarterly Federal Tax Return, on its website.

The draft form takes into account the legislation in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 that reduced the employee Social Security rate from 6.2% to 4.2% for one year, effective with wages earned beginning Jan. 1, 2011 (see lines 5a and 5b of Form 941). It also includes the following changes from the 2010 version: (1) elimination of the lines for the payroll tax exemption in the HIRE Act (lines 6a-6c), since the exemption may not be claimed on wages paid after Dec. 31, 2010; (2) deletion of the advance earned income credit line (line 9), since the advance earned income credit may not be claimed after Dec. 31, 2010; and (3) the addition of a new line for the FICA tax due on unreported tips. Some items from the 2010 form have been put on different lines (e.g., quarterly adjustments for sick pay moved from line 7b to line 8).

Comments on the form may be submitted to the IRS on its website. The first quarter return must be filed by May 2.

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