IRS updates Form 941-X and instructions

The IRS has updated Form 941-X, Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund, and instructions.

Employee refund claim consents

Rev. Proc. 2017-28, IRB 2017–14, 1061, available at IRS.gov/irb/2017-14_IRB/ar09.html, provides guidance to employers on the requirements for employee consents used by an employer to support a claim for refund of overcollected social security tax and Medicare tax. The revenue procedure clarifies the basic requirements for both a request for employee consent and for the employee consent, and permits a consent to be requested, furnished, and retained in an electronic format as an alternative to a paper format. The revenue procedure also contains guidance concerning when an employer may claim a refund of only the employer share of overcollected social security tax and Medicare tax. The revenue procedure requires that any request for consent include an Additional Medicare Tax notice indicating that any claim on the employee’s behalf won’t include a claim for overpaid Additional Medicare Tax. Rev. Proc. 2017-28 is effective for requests made on or after June 5, 2017. For requests made before June 5, 2017, employers may rely on the proposed revenue procedure set forth in Notice 2015-15, IRB 2015-9, 687, available at IRS.gov/ irb/2015-9_IRB/ar07.html.

Time period to make corrections

Generally, overreported taxes may be corrected on a previously filed Form 941 if the Form 941-X is filed within 3 years of the date Form 941 was filed or 2 years from the date the tax reported on Form 941 was paid, whichever is later. For purposes of the period of limitations, Forms 941 for a calendar year are considered filed on April 15 of the succeeding year if filed before that date. The period of limitations to correct social security tax for 2011 and 2012 expired on April 15, 2015, and April 15, 2016, respectively, for most employers. These instructions no longer discuss the reduced rate of employee social security tax that applied in 2011 and 2012. The 2011 and 2012 employee social security tax rate was 4.2% and the employer social security tax rate was 6.2% (10.4% total). If the period of limitations for 2011 and 2012 is still open, April 2017 revision can be filed but make sure the correct rate is used when reporting corrections on lines 8 and 9. (Form 941-X, Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund, and instructions, April 2017.)
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