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Form 941 Changes for 2012

Payroll Tax Cut Extended through December 31, 2012

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The IRS requires employers to file a quarterly payroll tax report on Form 941. This form has been changed in 2011 to reflect changes in employment laws. Here is the 2012 Form 941 (PDF).

Filing Form 941

An overview of the changes to the 2012 Form 941

  • Payroll tax cut for employees continued through December 31, 2012. The Middle Class Tax Relief and Job Creation Act of 2012, enacted in February, continued the 2% payroll tax cut for employees through the end of this year. The calculations for Form 941 have been changed to reflect this cut. The cut will not have any effect on employee Social Security eligibility.
  • Self-employed workers (not included in calculations for Form 941) will have a similar reduction in the social security portion of the self-employment tax from 12.4 percent to 10.4 percent.
  • The Social Security wage base has been increased for 2012, to $110,100. For workers who reach $110,100 in wages during 2012, no Social Security is taken out for those employees above that amount.
  • The Medicare tax rate remains at 1.45%, the same as for 2011. There is no limit on wages to which the Medicare tax is applied.
  • The HIRE Act tax exemption for hiring previously unemployed workers expired December 31, 2010, so this credit is no longer available to employers. Lines 12c and 12d have been eliminated.
  • The Advance Earned Income Credit (EIC) is no longer available through employers. Individuals must now claim this credit on their own tax return. So lines 9 and 10 are no longer used for this adjustment.

Other changes to Form 941 continued from 2011

  • Lines 6a - 6d have been shaded for reservation of future use. These are the lines previously used for the Hire Act reporting
  • Lines 7a - 10 have been renumbered
  • Lines 7a, 7b & 7c, originally used to report quarter adjustments of cents, sick pay, tips and group term life insurance, have been renumbered as lines 7 - 9
  • Line 8 was originally used for total taxes after adjustments and has been renumbered as line 10.

    Here is a copy of the 2012 Form 941 (pdf) and the instructions for 2012 941.

Form 941, including how to complete the form, when to file, where to file, and how to correct mistakes.

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