Due to the President’s memorandum signed on Aug. 8, which included an employee Social Security tax deferral, Form 941 must be updated for the third quarter of 2020. Most employers are required to fill out this federal tax document quarterly. On Sept. 30, the IRS released the new form with instructions for completion.
The Internal Revenue Service has issued guidance on how to implement the optional employee-side Social Security tax deferral. The deferral is voluntary for all employers; however, there are risks to consider before making the decision to opt in. Employers who opt in are ultimately responsible for repaying the deferred amounts if the employee fails to repay.
The new instructions include an updated explanation of “qualified sick leave wages” and “qualified family leave wages” as “wages for Social Security and Medicare tax purposes required to be paid under the Emergency Paid Sick Leave Act (EPSLA) as enacted under the Families First Coronavirus Response Act (FFCRA).”
What you need to know
Paycom is handling the transition to the new form on our clients’ behalf. Please continue to follow the Paycom blog for updates on further developments.
For more information about the Form 941 updates, visit the IRS website.
