New Form 941 Reflects COVID-19 Payroll Tax Changes

The tax relief offered by the federal government throughout the COVID-19 pandemic created new compliance requirements for employers as they file their quarterly federal tax returns and report payroll taxes.

In response, the IRS has issued Form 941 for 2021 (Employer’s Quarterly Federal Tax Return) and Schedule R (Form 941) (Allocation Schedule for Aggregate Form 941 Filers). These forms should be used for all 2021 quarters ending after March 31, 2021.

Form 941, which is used to report amounts withheld from employee paychecks for income taxes, Social Security tax and Medicare tax, as well as the employer’s portion of employment taxes, was updated to reflect the changes to payroll tax obligations and credits under the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief and Economic Security (CARES) Act.

Certified professional employer organizations and agents approved under Code Sec. 3504 must complete the new Schedule R when they file Form 941 in all applicable quarters.

For more information on calculating and reporting your payroll taxes and credits under COVID-19 legislation, please contact your Grassi tax advisor or or Laurie Lenahan, Accounting Services Senior Associate, at