Problem 9-12 Federal Tax Deposit System (LO 9.4)

(COVID provisions) Drew Fogelman operates a small business and his payroll records for the second quarter of 2020 reflect the following:

Employee	Matt D.		Jack F.		Avery F.		Tiffany Y.
Gross wages	$3,000.00		$1,400.00		$1,800.00		$4,200.00
Federal income tax withheld	45.00		18.00		25.00		191.00
FICA taxes	459.00		214.20		275.40		642.60

Using the information from above, complete Form 941 and Worksheet 1 for Drew for the second quarter of 2020.

Assume the following additional information:

• Drew was eligible for the employee retention credit.
• All of Jacks wages are for two weeks of sick pay. He was not paid for any other time in the second quarter.
• All of Averys wages cover 10 weeks of family leave. She was paid for no other time in the second quarter.
• The allocation of health care costs is $600 for the quarter for each employee.

need help to complete worksheet Step 2

Worksheet 1. Credit for Qualified Sick and Family Leave Wages for Leave Taken Before April 1, 2021 Keep for Your Records Determine how you will complete this worksheet. (If youre a third-party payer, you must complete this worksheet for each client for which it is applicable, on a client-by-client basis.) If you paid qualified sick leave wages and/or qualified family leave wages this quarter for leave taken before April 1, 2021, complete Step 1 and Step 2. Caution: Use Worksheet 3 to figure the credit for qualified sick and family leave wages for leave taken after March 31, 2021. Step 1. Determine the employer share of social security tax this quarter after it is reduced by any credit claimed on Form 8974 and any credit to be claimed on Form 5884-C and/or Form 5884-D 1a Enter the amount of social security tax from Form 941, Part 1, line 5a, column 2 ....... 1a 1b Enter the amount of social security tax from Form 941, Part 1, line 5b, column 2 ....... 1b 1c Add lines 1a and 1b .................................................. 1c 1d Multiply line 1c by 50% (0.50) ........................................... 1d 1e If youre a third-party payer of sick pay that isn't an agent and you're claiming credits for amounts paid to your employees, enter the employer share of social security tax included on Form 941, Part 1, line 8 (enter as a positive number) ......................... 1e 1f Subtract line 1e from line 1d ............................................ 1f 1g If you received a Section 3121(q) Notice and Demand during the quarter, enter the amount of the employer share of social security tax from the notice ...................... 1g 1h Employer share of social security tax. Add lines 1f and 1g .................... 1h 1i Enter the amount from Form 941, Part 1, line 11a (credit from Form 8974) ............ 1i 1j Enter the amount to be claimed on Form 5884-C, line 11, for this quarter ............. 1j 1j(i) Enter the amount to be claimed on Form 5884-D, line 12, for this quarter ............. 1j(i) 1k Total nonrefundable credits already used against the employer share of social security tax. Add lines 1i, 1j, and 1j(i) ..................................... 1k 1l Employer share of social security tax remaining. Subtract line 1k from line 1h ...... 1l Step 2. Figure the sick and family leave credit 2a Qualified sick leave wages reported on Form 941, Part 1, line 5a(i), column 1 ......... 2a 2a(i) Qualified sick leave wages included on Form 941, Part 1, line 5c, but not included on Form 941, Part 1, line 5a(i), column 1, because the wages reported on that line were limited by the social security wage base ........................................... 2a(i) 2a(ii) Total qualified sick leave wages. Add lines 2a and 2a(i) ......................... 2a(ii) 2a(iii) Qualified sick leave wages excluded from the definition of employment under sections 3121(b)(1)(22) ..................................................... 2a(iii) 2b Qualified health plan expenses allocable to qualified sick leave wages (Form 941, Part 3, line 19) ........................................................... 2b 2c Employer share of Medicare tax on qualified sick leave wages. Multiply line 2a(ii) by 1.45% (0.0145) .......................................................... 2c 2d Credit for qualified sick leave wages. Add lines 2a(ii), 2a(iii), 2b, and 2c ........... 2d 2e Qualified family leave wages reported on Form 941, Part 1, line 5a(ii), column 1 ....... 2e 2e(i) Qualified family leave wages included on Form 941, Part 1, line 5c, but not included on Form 941, Part 1, line 5a(ii), column 1, because the wages reported on that line were limited by the social security wage base .................................... 2e(i) 2e(ii) Total qualified family leave wages. Add lines 2e and 2e(i) ....................... 2e(ii) 2e(iii) Qualified family leave wages excluded from the definition of employment under sections 3121(b)(1)(22) ..................................................... 2e(iii) 2f Qualified health plan expenses allocable to qualified family leave wages (Form 941, Part 3, line 20) ........................................................... 2f 2g Employer share of Medicare tax on qualified family leave wages. Multiply line 2e(ii) by 1.45% (0.0145) ..................................................... 2g 2h Credit for qualified family leave wages. Add lines 2e(ii), 2e(iii), 2f, and 2g ......... 2h 2i Credit for qualified sick and family leave wages. Add lines 2d and 2h ............ 2i 2j Nonrefundable portion of credit for qualified sick and family leave wages for leave taken before April 1, 2021. Enter the smaller of line 1l or line 2i. Enter this amount on Form 941, Part 1, line 11b .............................................. 2j 2k Refundable portion of credit for qualified sick and family leave wages for leave taken before April 1, 2021. Subtract line 2j from line 2i and enter this amount on Form 941, Part 1, line 13c .................................................. 2k