TaxBandits Knowledge Base

How to determine the refundable and nonrefundable amounts of credits using 941 Worksheets?

Employers can determine the refundable and nonrefundable portions of qualified family and sick leave, as well as Employee Retention Credits (ERC), by using the IRS 941 Worksheets. These worksheets simplify the calculation process and help employers accurately determine the credits they are entitled to.

There are five specific worksheets, each serving a distinct purpose:

1. Worksheet 1: For calculating the credit for qualified sick and family leave wages paid in the quarter of 2023 for leave taken after March 31, 2020, and before April 1, 2021.
2. Worksheet 2: For calculating the credit for qualified sick and family leave wages paid in the quarter of 2023 for leave taken after March 31, 2021, and before October 1, 2021.
3. Worksheet 3: For calculating the nonrefundable and refundable portions of credits for sick and family wages taken after April 1, 2021.
4. Worksheet 4: For calculating the employee retention credit for the third and fourth quarters of 2021 for qualified wages paid after June 30, 2021.
5. Worksheet 5: For calculating the nonrefundable and refundable portions of the COBRA premium assistance credit.

Employers must accurately complete the relevant worksheet(s) and submit them along with Form 941 when filing their tax returns. By utilizing these worksheets, employers can ensure they are correctly calculating the refundable and nonrefundable portions of the qualified family and sick leave and ERC, ultimately reducing their tax liabilities and expediting any refunds owed to them.
 

Note: Employers can no longer claim COVID-19-related tax credits for these wages starting on or after the 2024 tax year.