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taxmap/pubs/p51-008.htm#TXMP26311a59 9. Reporting Adjustments on Form 943(p19)

9. Reporting Adjustments on Form 943

There are two types of adjustments: current year adjustments and prior year adjustments to correct errors. See the Instructions for Form 943 for more information on how to report these adjustments.

taxmap/pubs/p51-008.htm#TXMP484aafe7 Current Year Adjustments(p19)

Current Year Adjustments

In certain cases, amounts reported as social security and Medicare taxes on lines 3 and 5 of Form 943 must be adjusted to arrive at your correct tax liability. The most common situation involves differences in cents totals due to rounding. Other situations when current year adjustments may be necessary include third-party sick pay, group-term life insurance for former employees, and the uncollected employee share of social security and Medicare taxes on tips. See Publication 15 (Circular E) for more information on these adjustments.

If you withhold an incorrect amount of federal income tax from an employee, you may adjust the amount withheld in later pay periods during the same year to compensate for the error.

taxmap/pubs/p51-008.htm#TXMP6f08cb09 Prior Year Adjustments(p19)

Prior Year Adjustments

Generally, you can correct social security and Medicare errors on prior year Forms 943 by making an adjustment on your Form 943 for the year during which the error was discovered. The adjustment increases or decreases your tax liability for the year in which it is reported (the year the error was discovered) and is interest free. The net adjustments reported on Form 943 may include any number of corrections for one or more previous years, including both overpayments and underpayments.

You are required to provide background information and certifications supporting prior year adjustments. File with Form 943 a Form 941c, Supporting Statement To Correct Information, or attach a statement that shows the following:

• What the error was,
• The year in which each error was made and the amount of each error,
• The date on which you found each error,
• That you repaid the employee tax or received from each affected employee written consent to this refund or credit if the entry corrects an overcollection, and
• If the entry corrects social security and Medicare taxes overcollected in an earlier year, that you received from the employee a written statement that he or she will not claim a refund or credit for the amount.

taxmap/pubs/p51-008.htm#TXMP3f49c793 Do not file Form 941c separately.(p19)

The IRS will not be able to process your adjustments on Form 943 without this supporting information. See the Instructions for Form 941c for more information.

taxmap/pubs/p51-008.htm#TXMP58f635d6 Federal income tax withholding adjustments.(p19)

You cannot adjust the amount reported as federal income tax withheld for a prior year return, even if you withheld the wrong amount. However, you may adjust prior year federal income tax withholding to correct an administrative error. An administrative error occurs if the amount you entered on Form 943 is not the amount that you actually withheld. Examples include mathematical or transposition errors. In these cases, you should adjust the return to show the amount actually withheld.

The administrative error adjustment corrects only the amount reported on Form 943 to agree with the actual amount withheld from wages in that year.

You may also need to correct Forms W-2 for the prior year (if they do not show the actual withholding) by filing Form W-2c, Corrected Wage and Tax Statement, and Form W-3c, Transmittal of Corrected Wage and Tax Statements. Forms W-2c may be created and submitted to SSA over the Internet. For more information, visit Social Security's Employer Reporting Instructions and Information webpage at www.socialsecurity.gov/employer.

taxmap/pubs/p51-008.htm#TXMP7ce53c94 Social security and Medicare tax adjustments.(p19)

Correct prior year social security and Medicare tax errors by making an adjustment on line 8 of Form 943 for the year during which the error was discovered.

If you withheld no tax or less than the correct amount, you may correct the mistake by withholding the tax from a later payment to the same employee.

If you withheld employee tax when no tax is due or if you withheld more than the correct amount, you must repay the employee.

taxmap/pubs/p51-008.htm#TXMP0f82e9fd Filing a claim for overreported prior year liabilities.(p19)

If you discover an error on a prior year return resulting in a tax overpayment, you may file Form 843, Claim for Refund and Request for Abatement, for a refund. This form also can be used to request an abatement of an overassessment of employment taxes, interest, and/or penalties. You must file Form 941c, or an equivalent statement, with 
Form 843. See the separate Instructions for Form 843.

For purposes of filing Form 843, a Form 943 filed on time is considered to be filed on April 15 of the year after the end of the tax year. Generally, a claim may be filed within 3 years after that date.

taxmap/pubs/p51-008.htm#TXMP7713a522 Collecting underwithheld taxes from employees.(p19)

If you withheld no federal income, social security, or Medicare taxes or less than the correct amount from an employee's wages, you can make it up from future pay to that employee. But you are the one who owes the underpayment. Reimbursement is a matter for settlement between you and the employee. Underwithheld federal income tax must be recovered from the employee on or before the last day of the calendar year.

taxmap/pubs/p51-008.htm#TXMP42fb9ee5 Refunding amounts incorrectly withheld from employees.(p20)

If you withheld more than the correct amount of federal income, social security, or Medicare taxes from wages paid, give the employee any excess. The excess federal income tax withholding must be reimbursed to the employee before the end of the calendar year. Keep in your records the employee's written receipt showing the date and amount of the repayment. If you do not have a receipt, you must report and pay each excess amount when you file Form 943 for the year in which you withheld too much tax.

taxmap/pubs/p51-008.htm#TXMP42618c05 Filing corrections to Forms W-2 and W-3.(p20)

When adjustments are made to correct social security and Medicare taxes because of a change in the wage totals reported for a previous year, you also may need to file Forms W-2c and Form W-3c. Forms W-2c may be created and submitted to SSA over the Internet. For more information, visit Social Security's Employer Reporting Instructions and Information webpage at www.socialsecurity.gov/employer.

Previous Page:  Publication 51 - Circular A, Agricultural Employer's Tax Guide - 8. Form 943 Next Page:  Publication 51 - Circular A, Agricultural Employer's Tax Guide - 10. Federal Unemployment (FUTA) Tax Use   to find additional occurrences of topic items.