The “Refundable Portion of Employee Retention Credit” section is listed as question #26a under Part 3 of Form 941-X, which is needed to claim the employee retention tax credit. Instructions are below for the Refundable Portion of Employee Retention Credit section.
Key 941-X Tax Form Takeaways:
- Specific Eligibility Dates: Use Form 941-X, line 26a to correct the refundable portion of the Employee Retention Credit for qualified wages paid before January 1, 2022.
- Detailed Correction Process: For corrections, input the total corrected amount in column 1, the originally reported amount or previously corrected amount in column 2, and the difference in column 3. A positive or negative adjustment must then be noted correctly to reflect as a credit or balance due.
- Necessity for Accuracy and Assistance: It’s crucial to accurately answer the question #26a under Part 3 of the 941-X form to ensure proper claiming of the Employee Retention Credit. Professional services like Disaster Loan Advisors offer assistance in navigating these complex adjustments.
See Important 2024 Employee Retention Tax Credit Deadline Information at the Bottom of This Article.
Form 941-X:
26a. Refundable Portion of Employee Retention Credit
Part 3: Enter the corrections for this quarter. If any line doesn’t apply, leave it blank. (continued)
26a. Refundable portion of employee retention credit* (Form 941 or 941-SS, line 13d)
Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund
Part 3, “26a. Refundable Portion of Employee Retention Credit“ 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:
26a. Refundable Portion of Employee Retention Credit
Use line 26a only for corrections to quarters beginning after March 31, 2020, and before January 1, 2022.
Instructions for Qualified Wages Paid After March 12, 2020, and Before July 1, 2021
If you’re correcting the refundable portion of the employee retention credit that you reported on Form 941, line 13d, for qualified wages paid after March 12, 2020, and before July 1, 2021, enter the total corrected amount from Worksheet 2, Step 2, line 2k, 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. For more information about the employee retention credit for qualified wages paid after March 12, 2020, and before January 1, 2021, see Notice 2021-20. See Notice 2021-23 for more information about the employee retention credit for qualified wages paid after December 31, 2020, and before July 1, 2021. Also see section IV of Notice 2021-49 and Rev. Proc. 2021-33.
Copy the amount in column 3 to column 4. However, to properly show the amount as a credit or balance due item, enter a positive number in column 3 as a negative number in column 4 or a negative number in column 3 as a positive number in column 4. For an example of how to report amounts in columns 1 – 4 for an employment tax credit, see the instructions for line 17, earlier.
Be sure to explain the reasons for this correction on line 43.
Instructions for Qualified Wages Paid After June 30, 2021, and Before January 1, 2022
If you’re correcting the refundable portion of the employee retention credit that you reported on Form 941, line 13d, for qualified wages paid after June 30, 2021, and before January 1, 2022, enter the total corrected amount from Worksheet 4, Step 2, line 2i, 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. For more information about the employee retention credit for qualified wages paid after June 30, 2021, and before January 1, 2022, see Notice 2021-49 and Rev. Proc. 2021-33. See Notice 2021-65 for modifications to Notice 2021-49.
Copy the amount in column 3 to column 4. However, to properly show the amount as a credit or balance due item, enter a positive number in column 3 as a negative number in column 4 or a negative number in column 3 as a positive number in column 4. For an example of how to report amounts in columns 1–4 for an employment tax credit, see the instructions for line 17, earlier.
Be sure to explain the reasons for this correction on line 43.
Corrections to Form 941, Line 13f (For Quarters Beginning After March 31, 2020, and Ending Before April 1, 2021) or Line 13h (For Quarters Beginning After March 31, 2021, and Ending Before January 1, 2022)
Form 941-X doesn’t include a line to correct amounts reported on Form 941, line 13f (13h), for the total advances received from filing Form(s) 7200 for the quarter. If a discrepancy exists between the amount reported on Form 941 and the amount of advance payments issued, the IRS will generally correct the amount reported on Form 941, line 13f (13h), to match the amount of advance payments issued. However, aggregate filers may need to correct the amount reported on Form 941, line 13f (13h), to reflect the correct advance payments received by their clients or customers.
If you’re an aggregate filer that needs to correct the amount reported on Form 941, line 13f (13h), include any increase or decrease to the amount in the “Total” reported on Form 941-X, line 27; write “Correction to line 13f” or “Correction to line 13h,” as applicable, on the dotted line to the left of the entry box on line 27; explain your correction on line 43; and attach Schedule R (Form 941) to Form 941-X to show corrections for your clients or customers.
Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund
Instructions for Part 3, “26a. Refundable Portion of Employee Retention Credit“ 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: 26a. Refundable Portion of Employee Retention Credit, Form Instructions
The “Refundable Portion of Employee Retention Credit” section is just one of forty three detailed questions and calculations you must complete correctly on the 941X IRS Form. Listed as question #26a under Part 3 of the 941X, be sure to answer the Refundable Portion of Employee Retention Credit question #26a 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.™