IRS Issues New Form 941 for 2024: Updates You Should Know.

IRS Form 941 is the new quarterly payroll filing update. Read more in this guide

New Form 941 for 2024

The new year started with the latest Form 941 for 2024 Tax Year from the IRS. According to the new updates, Form 941 has few major changes.

The new Form 941 has significant changes for the upcoming tax season. Here are the few changes to Form 941 that employers should be aware of before filing:

• The Social Security and Medicare tax rate for 2024 has been updated.
• The most remarkable change is removing COVID-19 tax-related credit for qualified sick and family leave wages. This is no longer needed for Form 941.
• Several changes have been available for specific lines of Form 941.

This blog contains detailed information about the new changes, giving you insight into why they are essential and how they will affect your 941 filing for the first quarter of 2024 and beyond!

Let’s start with the Basics of Form 941.

What Is IRS Form 941: Employer’s Quarterly Federal Tax Return?

IRS Form 941, commonly known as the Employer’s Quarterly Federal Tax Return, is used by businesses to report the income taxes, payroll taxes, Social Security, and Medicare taxes deducted from employees’ wages. Many companies have to file 941 every quarter, and the form calculates how much payroll tax the business has to pay for the whole quarter.

What are the filing deadlines for Form 941 for 2024?

Form 941 is a quarterly form with a deadline typically on the last day of the month, following the completion of the previous quarter. The Form 941 deadlines for 2024 are as follows:

• First quarter deadline — April 30, 2024 (January, February, and March)
• Second quarter deadline — July 31, 2024 (April, May, and June)
• Third quarter deadline — October 31, 2024 (July, August, and September)
• Fourth quarter deadline — January 31, 2025 (October, November, and December)

When the deadline falls on a weekend or federal holiday, the next business day automatically becomes the deadline.

What are the new updates in Form 941 for 2024?

The revised Form 941 from the IRS has the following significant changes to be expected for the upcoming tax season:

1. The Social Security and Medicare taxes for 2024 have been updated:

• The Social Security tax rate for each employer and employee is 6.2%. The Social Security wage base limit has been increased from $160,200 to $168,600.
• The Medicare tax rate for each employer and employee is 4.5%, which remains unchanged. There are no wage base limits for Medicare taxes.
• Social Security and Medicare taxes apply to the wages of household workers paid $2,700 or more in cash in 2024.
• Election workers who receive $2,300 or more in cash or equivalent compensation are subject to Social Security and Medicare taxes in 2024.

2. Employers can no longer claim COVID-19-related credits on Form 941:

If you paid for sick and family leave wages between March 31, 2020, and October 1, 2021, and you’re an employer, you could claim a tax credit. However, the specific lines on Form 941 for claiming this credit have been removed for tax periods starting after December 31, 2023, since it’s uncommon to pay such wages in 2024 for that period.

You can still claim the credit if you’re eligible and paid these wages in 2024 for the mentioned time frame. Use Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund, after filing Form 941. Remember not to file Form 941-X before Form 941 for the quarter, which might lead to processing errors or delays.

3. Forms 941-SS and 941-PR are no longer available for 2024:

Form 941-SS-Employer’s QUARTERLY Federal Tax Return — American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands and Form 941-PR-Planilla para la Declaración Federal TRIMESTRAL del Patrono is no longer required for 2024. Instead, employers in U.S. territories can file 941 or the new Form 941 (sp), Declaración del Impuesto Federal Trimestral del empleador, which has Spanish instructions.

4. Publications- 51, 80, and 179 are no longer needed after 2023.

Publication 51- Agricultural Employer’s Tax Guide, Publication 80-Federal Tax Guide for Employers in the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, and Publication 179-Guía Contributiva Federal para Patronos Puertorriqueños was discontinued after December 31, 2023. Instead, information about agricultural employers and employers in the U.S. territories is included in Publication 15, Employer’s Tax Guide. For the tax year 2024, there is a new Publication 15 (sp), a Spanish-language version of Publication 15.

5. Payroll tax credit for specific tax-exempt organizations affected by qualified disasters.

Certain tax-exempt organizations affected by qualified disasters (not COVID-19) can get a payroll tax credit, thanks to Section 303(d) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020. To claim this credit, use Form 5884-D (not Form 941). Remember, you file Form 5884-D(Employee Retention Credit for Certain Tax-Exempt Organizations Affected by Qualified Disasters) after filing Form 941 for the quarter in which you claim the credit.

Certain Lines have been removed in Form 941 for 2024.

You will notice some differences from your last quarter’s filing when you look at several lines on the forthcoming Form 941. Many have been removed or updated, particularly those containing information about the COVID-19 tax credits. Here’s a quick rundown:

• Part 1, Lines 11a–11g.

In Part 1, Lines 11a to 11g have been removed. Instead, Line 11 will have the information regarding qualified small business payroll tax credit for increasing research activities, which is reported through Form 8974 (Payroll tax credit for Qualified small businesses for increasing research activities).

• Part 1, Lines 13a-13i.

In Part 1, Lines 13a to 13i have been removed in the new Form 941 for 2024. Instead, line 13 will include the total amount of deposits for that specific quarter, which will consist of overpayments from Form 941-X, Form 941-X (PR), Form 944-X, or Form 944-X (SP) filed in the current quarter, as well as overpayments applied from a previous quarter.

• Part 3, Lines 19–28.

In Part 1, Lines 19–28 have been removed in the new Form 941 for 2024.

E-file Form 941 in minutes with TaxBandits!

Staying updated is crucial for filing Form 941 quarterly in the new year. The IRS Form 941 has remarkable changes, including updates to Social Security and Medicare tax limits, exclusion of COVID-19-related tax credits, and changes in the specific lines of the new Form 941.

TaxBandits, an IRS-authorized E-file service provider, offers guidance and guarantees a seamless filing process for Form 941 with the IRS. For the first quarter of 2024 and beyond, stay up to date on the latest changes, adhere to the deadlines, and trust in TaxBandits to help you through the complexity of 941 filings. Stay informed and compliant, and let TaxBandits be your reliable payroll tax filing partner!