How To Fill Out Form 941-X For The Employee Retention Credit
Our guide explains how business owners can claim the employee retention credit retroactively with one simple form.
On 1/10/24, IRS Commissioner Daniel Werfel announced that the IRS is continuing to improve and automate ERC review procedures and will begin processing new ERC claims in the spring following the moratorium implemented in September. Existing claims are still being processed and eligible businesses can still submit an ERC claim through reputable ERC companies to be processed when the moratorium ends. Visit our full breakdown of the ERC pause for the latest information.
If you didn’t take advantage of the employee retention tax credit during the COVID-19 pandemic, eligible small businesses can now retroactively claim the credit by filing an amended tax return via IRS Form 941-X. With this simple form, you could receive a refund from the IRS to put more money back in your pocket or into your business.
Keep reading to learn how to claim the ERC retroactively using IRS Form 941-X.
Table of Contents
What Is Form 941-X?
Form 941-X is an Internal Revenue Service tax form used to adjust an employer’s quarterly federal tax return. This form is also used to claim refunds for overreported tax amounts.
If you are an employer that is eligible to receive the employee retention tax credit and didn’t previously claim this credit, you can use Form 941-X to claim the credit and receive a refund retroactively.
What Do You Need To File Form 941-X?
Being prepared to complete and file Form 941-X is crucial to getting an accurate refund in a timely manner. Filling out the form isn’t difficult if you have the right information and documentation. Before filing Form 941-X, here’s what you need to have in hand:
- Personal information, including your EIN
- Copies of completed Form 941 for each quarter you’re claiming an ERC refund
- Payroll records
- Form 941-X for each quarter you’re claiming an ERC refund
Don’t have time to fill out the Form 941-X yourself? Contact one of these top ERC service companies that can help you calculate, file, and claim your ERC tax credit.
How To Fill Out & File Form 941-X For The Employee Retention Credit
If you previously didn’t claim the ERTC, you must fill out and file form 941-X to receive your refund. Here’s exactly how to fill out Form 941-X for your employee retention credit in nine easy steps.
Step 1: Gather Your Important Documents
Remember that important documentation and information we discussed earlier? Now is the time to get it together. Make sure you have:
- All payroll records
- Details about your business
- Copies of filed Form 941 for every quarter you’re claiming the ERC
- Form 941-X for each quarter you’re claiming the ERC
Step 2: Fill Out Personal Information
To begin filling out Form 941-X, add your personal information to the top left corner of the form. In this section, you’ll need to include the following:
- Employer Identification Number (EIN)
- Legal name
- Trade name (if applicable)
Step 3: Enter The Information For The Corrected Return
Once you’ve entered your personal information, move to the top right corner of the first page to enter information about the tax return you’re correcting. In this section, you’ll need to include the following:
- The type of return being corrected (Form 941 or 941-SS)
- The quarter that is being corrected
- The calendar year of the quarter being corrected
- The date that you discovered the error was made
Don’t forget that you are required to file a separate Form 941-X for each quarter for which you are claiming the ERTC.
Step 4: Choose Your Process For Amending Your Return
In Part 1 of Form 941-X, you will need to select the process for amending your return.
- Option #1: is used for underreported amounts, overreported amounts, or both. The underreported amount calculated and applied using this method is applied as a credit to your 941.
- Option #2: is used for overreported amounts on Form 941. This option allows you to file a claim to receive a refund for the overreported amounts. If you want to file your ERC and receive a refund retroactively, this is the option you should select.
Step 5: Complete The Certifications For Tax Form 941-X
In Part 2 of Form 941-X, you will need to complete the certifications. When claiming your ERTC, check box three. This indicates that you will file tax form W-2 or Form W-2c as required by the IRS.
If you selected option two from Part 1 of Form 941-X, move to question five. From this section, you’ll check box 5d, which indicates that you are filing a claim for income tax, Social Security tax, Medicare tax, or additional Medicare tax not withheld from employee wages.
Step 6: Calculate Your ERC Refund
This step can be complicated, so it’s helpful to have your tax documentation in hand and work carefully through this section to calculate your ERC refund accurately.
To begin, move to page two of Form 941-X. On line 18a, you will enter the nonrefundable portion of the employee retention credit in column one. Complete the calculations across line 18a to fill out all four columns.
Next, move to page three of Form 941-X. On line 23, combine the amounts from column four of lines seven through 22.
Move to line 26a and enter the refundable portion of your employee tax credit. Make sure to fill out all four columns for line 26a.
Combine the amounts from column four of lines 23 through 26c. Enter this number on line 27.
Finally, enter your qualified wages for the employee retention credit on line 30.
Step 7: Provide An Explanation For Your Corrections
Page four of 941-X will be left blank in most cases, so move on to page five. Under line 43, you are required to explain how you determined a credit was due.
In this section, you can keep it simple by just stating that you are amending your return to claim your ERC credit. You can also add a note that a refund can be sent to the address on file with the IRS.
Step 8: Sign & Date Form 941-X
You’re almost finished and will need to sign and date Form 941-X. Sign your legal name, enter the current date, and print your name, title, and daytime phone number.
If a paid preparer was used, they will need to fill out the next section with their name, firm name (if applicable), EIN, and other information. However, if you completed Form 941-X yourself, you can skip over this section. However, don’t forget to sign and date the form, regardless of who filled it out.
Step 9: File Your 941-X To Receive Your Employee Retention Credit
Unfortunately, you can’t file Form 941-X online. You will need to print, complete, and mail the form to the IRS. Where you send your form depends on the state you live. Additionally, there are other addresses to use if you use a private delivery service, and there are special filing addresses for certain organizations. To make sure you properly file your form, check out the IRS website for information on where to send your Form 941-X and follow our guide step-by-step guide on how to apply for the employee retention credit for more next steps.
It is important to note that there may be a long wait until you get your refund check, so be sure to submit your forms as soon as possible. Though timelines vary, expect to wait anywhere from four to 12 months to receive your ERC refund. If you have questions about the status of your ERC refund, you can contact the IRS by phone at 1-877-777-4778.
Read our full post on checking your ERC refund status for the latest tips on getting your refund.
Deadlines To File Form 941-X For The ERC
If you missed out on receiving the ERC, don’t worry — you still have time to cash in on this tax credit. To qualify, you will have to file Form 941-X with the IRS. Fortunately, the IRS has given small businesses plenty of time to prepare and file their tax forms.
The deadlines for filing Form 941-X for your ERC refund are as follows:
- ERTC Claims For Tax Filing Year 2020: April 15, 2024
- ERTC Claims For Tax Filing Year 2021: April 15, 2025
Although these timelines give you plenty of time to get your forms completed and filed, there is a long waiting process to receive your refund. Therefore, you should try to get Form 941-X completed and filed as soon as possible to avoid additional waiting time for your refund — or have one of these ERC specialists file for this credit for you. Good luck!