941-X: 43. Explain Your Corrections, Form Instructions (revised 2024)

The “Explain Your Corrections” section is listed as question #43 under Part 4 of Form 941-X, which is needed to claim the employee retention tax credit. Instructions are below for the  Explain Your Corrections section. 

Key 941-X Tax Form Takeaways:

  • Specificity Required: When correcting payroll tax errors using Form 941-X, it’s important to provide detailed and specific explanations for each correction, including what the mistake was, its financial impact, and how it was identified.
  • Documentation Importance: To facilitate prompt and efficient processing by the IRS, additional supporting documents or detailed explanations may be needed for corrections that significantly alter reported figures.
  • Employee Retention Credit: Accurately completing Form 941-X is crucial for businesses looking to claim the Employee Retention Tax Credit, ensuring they receive the correct financial benefits.

See Important 2024 Employee Retention Tax Credit Deadline Information at the Bottom of This Article.

Form 941-X:

43. Explain Your Corrections

Part 4: Explain your corrections for this quarter.

43. You must give us a detailed explanation of how you determined your corrections. See the instructions.

Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund

Part 4, “43. Explain Your Corrections“ 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:

43. Explain Your Corrections

Treasury regulations require you to explain in detail the grounds and facts relied upon to support each correction. On line 43, describe in detail each correction you entered in column 4 on lines 7–22, and lines 24–26c. Also use line 43 to describe corrections made on line 6 and lines 28–40. If you need more space, attach additional sheets, but be sure to write your name, EIN, “Form 941-X,” the quarter you’re correcting (for example, “Quarter 2”), and the calendar year of the quarter you’re correcting on the top of each sheet.

You must describe the events that caused the underreported or overreported amounts. Explanations such as “social security and Medicare wages were overstated” or “administrative/payroll errors were discovered” or “taxes were not withheld” are insufficient and may delay processing your Form 941-X because the IRS may need to ask for a more complete explanation.

Provide the following information in your explanation for each correction.

  • Form 941-X line number(s) affected.
  • Date you discovered the error.
  • Difference (amount of the error).
  • Cause of the error.

You may report the information in paragraph form. The following paragraph is an example.

“The $1,000 difference shown in column 3 on lines 6, 8, and 12 was discovered on May 14, 2022, during an internal payroll audit. We discovered that we included $1,000 of wages for one of our employees twice. This correction removes the reported wages that were never paid.”

For corrections shown on lines 19–22, explain why the correction was necessary and attach any notice you received from the IRS.

Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund

Instructions for Part 4, “43. Explain Your Corrections“ 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: 43. Explain Your Corrections, Form Instructions

The “Explain Your Corrections” section is just one of forty three detailed questions and calculations you must complete correctly on the 941X IRS Form. Listed as question #43 under Part 4 of the 941X, be sure to answer the Explain Your Corrections question #43 correctly.

How To Fill Out Form 941-X For the Employee Retention Tax Credit?

Watch this 941-X video to learn more about how to fill out the IRS 941-X Form properly.

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.

Mark Monroe

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