The IRS recently released a new form for correcting previously misstated federal withholding amounts. This new form, form 941-X replaces the previous form 941c, Supporting Statement to Correct Information.
If you have ever worked with the old form 941c, you will love the changes 941-X has offered. With the old form you had to separately calculate discrepancies for social security withheld, Medicare withheld, social security matched by employer, etc., then you had to show the difference for each line item instead of using a simple grouping method (that would have been more than sufficient). The 941-X makes simple changes that allow for much easier explanation of discrepancies found by employers.
Another difference is that with the new 941-X, if you have both over-reported and under-reported your 941 liability for a tax period, you must file two separate 941-x statements to correct your mistake.
In connection with this change, the IRS has also eliminated interest charges on errors corrected with form 941-X. In order to qualify for the interest free adjustment, a business must file and pay for adjustments with form 941-X by the due date of the return for the return period in which the error was ascertained. If you do not pay the amount due to the adjustment, then interest will accrue from the time the return was due to be filed (per Code Sec. 6205).
Example: On February 11, 2009, you discover that you under-reported $10,000 of social security and Medicare wages on your 2008 fourth quarter form 941. File 941-X and pay the amount you owe by April 30, 2009 because you discovered the error in the first quarter of 2009, and April 30, 2009, is the due date for that quarter. If you file form 941-X and pay the amount when you file (before April 30, 2009) you will avoid interest on your discrepancy.
If you have further questions related to under-reporting of tax liabilities consult a tax professional or access this link to the IRS form 941-X instructions.
Note- This only applies to previously filed form 941 if you file 941-X within 3 years of the date form 941 was filed or 2 years from the date you paid the tax reported, whichever is later.