Surprise (again)! The IRS still has a large batch of unprocessed Forms 941-X; approximately 199,000 of them as of Sept. 21. I assisted with increasing the pile by the addition of two more earlier in October.
Many of these quarterly payroll tax returns were filed by employers to amend their original filings to claim temporary COVID breaks, such as the sick and family leave credit and the employee retention tax credit.
IRS has been making a dent on these returns. As of Feb. 1, there were over 447,000. Now we know why there is such a long processing delay. The Service didn’t start working on claims for the credits until 12 months after the legislation granting these tax breaks was enacted, according to Treasury inspectors. A lack of updated computer programming, guidance and training all contributed to the delay. That and six months of employees in fuzzy slippers watching Netflix during Covid didn’t help any backlog.