Draft Forms 943, 944 Issued With Covid-19 Relief Reporting Lines

Drafts of two annual payroll tax returns for 2020 that are to have many new and renumbered lines to facilitate reporting of coronavirus-related employment tax relief data were released Sept. 17 by the Internal Revenue Service.

Modifications incorporated into the draft 2020 Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees, and draft 2020 Form 944, Employer’s Annual Federal Tax Return, largely parallel the changes that were made to Form 941, Employer’s Quarterly Federal Tax Return, to accommodate coronavirus-related employment tax relief reporting.

The 2020 Form 943 is to feature 21 new or renumbered lines and the 2020 Form 944 is to feature 20 new or renumbered lines, as follows:

• Lines 2a and 2b of Form 943 and Lines 4a(i) and 4a(ii) of Form 944 are with regard to reporting qualified leave wages, paralleling Lines 5a(i) and 5a(ii) on Form 941. Lines 3a and 3b of Form 943, like the Column 2 data-entry fields of Lines 4a(i) and 4a(ii) of Form 944 and Lines 5a(i) and 5a(ii) of Form 941, convey the employee portion of Social Security tax assessed on these amounts.
• Lines 12a, 12b, 12c, and 12d of Form 943 and Lines 8a, 8b, 8c, and 8d of Form 944 are to be used for reporting the qualified small business payroll tax credit for increasing research activities, which itself is fully nonrefundable, as well as the nonrefundable portions of the three coronavirus-related employment tax credits. These lines parallel Lines 11a, 11b, 11c, and 11d of Form 941.
• Line 14a of Form 943 and Line 10a of Form 944 are used to reflect overall tax deposits for the year before taking into account deferred amounts of Social Security tax, refundable portions of the three coronavirus-related employment tax credits, and advances of credit amounts received through filing Form 7200. Line 13a of Form 941, formerly numbered as Line 13, is functionally equivalent to these lines.
• Line 14b of Form 943 and Line 10b of Form 944 are with regard to the deferred amounts of the employer portion of Social Security tax while Line 14c of Form 943 and Line 10c of Form 944 are with regard to deferred amounts of the employee portion of Social Security tax. The second version of Form 941 for 2020 was released before the establishment of the ability to defer the employee portion of Social Security tax and as such does not provide an ability to report such deferrals, but the draft of the third version of Form 941 for 2020, released Aug. 28, is to repurpose the form’s Line 13b for reporting deferred amounts of both the employer and employee portions of Social Security tax.
• Lines 14d and 14e of Form 943 and Lines 10d and 10e of Form 944 are used for reporting refundable portions of the three coronavirus-related employment tax credits, and as such are parallel to their quarterly counterparts, Lines 13c and 13d, of Form 941.
• Line 14f of Form 943 and Line 10f of Form 944 are designed to provide the total amount of deposits, deferrals, and refundable credit amounts, and these lines have the same function as the quarterly counterpart Line 13e of Form 941.
• Line 14g of Form 943 and Line 10g of Form 944 report advances of credit amounts that were received through filing at least one Form 7200, parallel to Line 13f of Form 941.
• Line 14h of Form 943 and Line 10h of Form 944, as with Line 13g of Form 941, convey total deposits, deferrals, and refundable credit amounts less advances.
• Slight modifications were made to Line 14 of Form 944 to clarify that if a filer checks the box associated with this line to indicate business closure or cessation of paying wages, it is necessary to attach an accompanying statement identifying the name of the person who will retain payroll records and the address where they will be retained. Similar adjustments were made to Line 17 on Form 941.
• Lines 18 and 19 of Form 943 and Lines 15 and 16 of Form 944, parallel to Lines 19 and 20 of Form 941, convey details on qualified health plan expenses allocable to qualified leave wages.
• Qualified wages used in calculating the employee retention credit are reported with Line 20 of Form 943 and Line 17 of Form 944, with these lines parallel in function to Line 21 of Form 941.
• Line 21 of Form 943 and Line 18 of Form 944 are used for reporting qualified health plan expenses pertaining to the employee retention credit, with these lines parallel in function to Line 22 of Form 941.
• Line 22 of Form 943 and Line 19 of Form 944, like Line 23 of Form 941, are used for reporting data regarding the Internal Revenue Code Section 3111(e) credit for employment of qualified veterans.

A draft of the 2020 Form 943’s Schedule R, Allocation Schedule for Aggregate Form 943 Filers, also was released Sept. 17 and is to have many additional columns for reporting aggregated Form 943 data on coronavirus-related employment tax relief, similar to the changes made to Form 941’s Schedule R in this regard.

Draft forms are not final. The finalized versions of forms may contain changes not included in draft versions.