The “Taxable Social Security Tips” section is listed as question #11 under Part 3 of Form 941-X, which is needed to claim the employee retention tax credit. Instructions are below for the Taxable Social Security Tips section.
Key 941-X Tax Form Takeaways:
- Reporting Adjustments for Taxable Social Security Tips: Learn how to accurately report adjustments to taxable social security tips on Form 941-X, emphasizing the importance of correct entries in each column to ensure accurate tax calculations.
- Calculation of Corrected Tax Amounts: Understand the formula used to calculate the tax adjustments needed when correcting reported social security tips, including specific percentages for employer and employee shares.
- Importance of Detailed Documentation: Discover the necessity of documenting the reasons for adjustments on Form 941-X to comply with IRS requirements and support your tax correction claims.
See Important 2024 Employee Retention Tax Credit Deadline Information at the Bottom of This Article.
Form 941-X:
11. Taxable Social Security Tips
Part 3: Enter the corrections for this quarter. If any line doesn’t apply, leave it blank.
11. Taxable social security tips (Form 941 or 941-SS, line 5b, Column 1)
Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund
Part 3, “11. Taxable Social Security Tips“ from Form 941X published by the Department of the Treasury – Internal Revenue Service (IRS), OMB No. 1545-0029, revised in April 2022.
Instructions for Form 941-X:
11. Taxable Social Security Tips
If you’re correcting the taxable social security tips you reported on Form 941, line 5b, column 1, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.
Multiply the amount in column 3 by 0.124 and report that result in column 4.
Note. If you checked the box on Form 941-X, line 4b or line 5c, because you’re correcting only the employer share of tax on a decrease to social security tips, use 0.062 (6.2%) when multiplying the amount shown in column 3. If you’re correcting both shares of tax for some employees and only the employer share for other employees, report the properly calculated amount in column 4. Be sure to show your calculations on line 43.
Example – Social security tips increased.
Following Example – Wages, tips, and other compensation increased in the instructions for line 6, the tips that you overlooked were also taxable social security tips. To correct the error, figure the difference on Form 941-X as shown.
Use the difference in column 3 to determine your tax correction.
Be sure to explain the reasons for this correction on line 43.
Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund
Instructions for Part 3, “11. Taxable Social Security Tips“ came from the IRS Instructions for Form 941-X published by the Internal Revenue Service (IRS) Department of the Treasury, revised in April 2022.
Conclusion and Summary on 941-X: 11. Taxable Social Security Tips, Form Instructions
The “Taxable Social Security Tips” section is just one of forty three detailed questions and calculations you must complete correctly on the 941X IRS Form. Listed as question #11 under Part 3 of the 941X, be sure to answer the Taxable Social Security Tips question #11 correctly.
How To Fill Out Form 941-X For the Employee Retention Tax Credit?
Need Help Completing / Filing IRS Form 941-X?
Disaster Loan Advisors can assist your business in filing an amended Form 941 Employer’s Quarterly Federal Tax Return (for 2020 and 2021), which is IRS Form 941-X Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund.
This tax form is required to be filled out correctly and filed for each qualifying quarter in 2020 and 2021 to ensure your business claims the maximum Employee Retention Credit (ERC) / Employee Retention Tax Credit (ERTC).
– Did you calculate your company’s maximum ERC Tax Credit correctly?
– Are you claiming all the ERC Credit for each qualifying quarter?
– Are you maximizing the total amount of ERC Credit your company qualifies for?
– Need a professional set of eyes to ensure you filled out your form 941X correctly?
Flexible and Professional ERC Consulting Tax Services
There are several flexible options for you. We can review, prepare, and / or file your 941-X Forms for you, or with you.
– Do-It-Yourself (DIY) and have us review your work.
– Done-With-You (DWY) and let’s collaborate together.
– Done-For-You (DFY) and we handle it all for you, from start to finish.
– Or, Consult-With-You to customize to your exact needs.
Our professional ERC fee and pricing structure is very reasonable in comparison.
We DO NOT charge a percentage (%) of your ERC Refund like some companies are charging. Some ERC firms out there are charging upwards of 25% to 35% of your ERC refund!
If you are looking for an ERC Company that believes in providing professional ERC Tax Services and value for small business owners, in exchange for a fair, reasonable, and ethical flat-fee for the amount of work required, Disaster Loan Advisors is a good fit for you.
Form 941-X and the ERC program can be very confusing as it relates to your specific business situation. Our fee structure is fair and reasonable for the same or better level of ERC service.
Schedule Your Form 941-X Consultation to have peace of mind you are making sure your company actually qualifies, AND you are calculating the employee retention tax credit properly.
Deadlines to File IRS Form 941-X in 2024 and 2025
The 2020 ERC Credit Tax Year deadline of 4/15/24 has already passed. Good news? The opportunity to retroactively claim your business Employee Retention Credit for the prior 2021 Tax Year is still available, with a next year April 15, 2025 deadline.
This really is your FINAL chance at any potential ERC tax credit refund!
How to Claim the Employee Retention Tax Credit (ERC / ERTC) and Receive Up to a $26,000 Refund Per Employee
Disaster Loan Advisors can assist your business with the complex and confusing Employee Retention Credit (ERC) and Employee Retention Tax Credit (ERTC) program.
Depending on eligibility, business owners and companies can receive up to $26,000 per employee based on the number of W2 employees you had on the payroll in 2020 and 2021.
The ERC / ERTC Program is a valuable tax credit you can claim. This is money you have already paid to the IRS in payroll taxes for your W2 employees.
Schedule Your Free Employee Retention Credit Consultation to see if your company qualifies for the employee retention tax credit.
Cover Image Credit: Irs.gov / Form 941-X / Disaster Loan Advisors.
As a leading dedicated member of the Tax and Accounting Team at Disaster Loan Advisors™, Mark focuses on unlocking the ERC Tax Credit's potential for eligible firms that qualify, providing strategic advice, and detailed guidance to ensure substantial financial recovery and growth. His methodical approach to client engagement includes comprehensive deep-dive analysis, customized consultation and guidance, and a commitment to achieving tangible results for each business served.
Disaster Loan Advisors™ (DLA) offers a comprehensive suite of services designed to navigate the complexities of the Employee Retention Tax Credit (ERC) program, ensuring that qualified businesses leverage the maximum possible benefit with minimum hassle. Unlike some firms that charge exorbitant contingency or percentage-based fees (often between 10% to 30% of your ERC refund), DLA operates on a fair and reasonable, transparent flat-fee structure that aligns with the IRS's guidelines.
If you are looking for an ERC Company that believes in providing professional ERC Services and value for small business owners, in exchange for a fair, reasonable, and ethical fee for the amount of work required, Disaster Loan Advisors™ is a good fit for you. STAY SAFE. STAY COMPLIANT. KEEP MORE OF YOUR REFUND.™
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