When you discover an error on a previously filed Form 941, you must correct that error using Form 941-X. If you didn’t file a Form 941 for one or more quarters, don’t use Form 941-X. Instead, file Form 941 for each of those quarters. If you didn’t file Forms 941 because you misclassified workers as independent contractors and are now reclassifying them as employees, you will need to file both Forms 941 and 941-X together. Do not file Form 941-X to correct the number of employees or the liability amounts reported on Form 941 or Schedule B. To correct federal tax liabilities see the instructions for Schedule B.
Generally, Form 941-X must be filed within 3 years starting April 15 of the following year of the year of the return. For example, if you are amending any quarter of a 2019 form 941, you can file Form 941-X by April 15, 2023. In this example, the IRS starts the clock on April 15, 2020. This is called "period of limitations".
Also, if you are correcting overreported amounts and are filing form 941-X in the last 90 days of a period of limitations, you MUST use the claim process. You can’t use the adjustment process. If you’re also correcting underreported amounts, you must file another Form 941-X to correct the underreported amounts using the adjustment process and pay any tax due.
Filing form 941-X is not easy. Therefore, it is recommended you read the instructions carefully before completing your adjustments. Key items to be familiar are whether you underreported or overreported wages and whether you want to claim a refund or want to apply a credit to the tax period in which you are filing the adjustment. As a result of this, you may need to include any overpayment resulting from filing form 941-X as a credit on a future form 941.
Form 941-X cannot be electronically filed. This form must be paper filed.
A provider is an entity authorized by the IRS to participate in IRS e-file. To become a provider, the entity must submit an application, meet eligibility criteria and pass a suitability check before the IRS assigns an Electronic Filing Identification Number (EFIN). An entity identifies its e-file activity by selecting the appropriate provider option in the IRS e-file application. Each provider option entails a different role and may have different responsibilities that relate specifically to the e-file activity of the firm. The IRS may take up to 45 days to approve an e-file application.
A provider can be classified as an Electronic Return Originator (ERO), Intermediate Service Provider, Transmitter, Software Developer, Reporting Agent, Online Provider or a Large Taxpayer. These roles are not mutually exclusive. Therefore, providers can operate under multiple roles. For a full list of IRS e-File providers click here.
An Electronic Return Originators (ERO) originates the electronic submission of a return to the IRS. The ERO is usually the first point of contact for most taxpayers e-filing a return. There are about 180,000 entities classified as ERO's in the United States. Most entities apply to be ERO's because this category allows them to receive taxpayer information and pass it on to a transmitter. An ERO can be the accounting firm or the H&R Block office in your neighborhood.
A Software Developer develops software that formats electronic return information according to IRS e-file specifications. There are about 700 approved software developers in the United States.
A Transmitter sends the electronic tax data directly to the IRS. The IRS accepts transmissions using a variety of telecommunication protocols. There are approximately 41,000 approved transmitters in the U.S.
It is interesting to note that there are only about 530 entities that are classified as ERO's, Trasnmitters and Software Developers and only a handfull of entities, 26 at the time this article was written, that are listed in the IRS website as Tax Year 2020 94x Modernized e-File (MeF) Providers. See IRS list here.