The IRS, following the release of guidance on the payroll tax holiday set to begin on September 1, 2020 in Notice 2020-65, has now released a draft version of a revised Form 941 to take into account the employee old age, survivor and disability insurance withholding that is deferred from September 1 to December 31.[1]

The key change is found on page 3 in Part 3, line 24, which asks for the “Deferred amount of the employee share of social security tax included in line 13b.” Line 13b on page 1 currently has the deferred employer portion of social security taxes under the CARES Act, so the line on page 1 will be used to cover both types of deferred social security taxes, while line 24 will alert the IRS to the portion of the total deferral that must be paid in by May 1, 2021.

As of the time this was written just before 1:00 pm MST on August 29, 2020, the IRS had not yet posted the draft instructions for this version of the Form 941. Those instructions may, like the instructions for second quarter 941 revision that outlined instructions for handling the employer old age, survivor and disability insurance deferral, confirm that employers can “opt-out” from participating in this deferral program.

[1] Form 941 for 2020: Employer’s QUARTERLY Federal Tax Return (DRAFT), August 28, 2020 https://www.irs.gov/pub/irs-dft/f941--dft.pdf (retrieved August 29, 2020)