Form 943 (2020) Tax Filing Checklist
Form 943 reports annual federal employment taxes withheld and paid for agricultural employees. The 2020 form incorporates qualified sick leave wages and qualified family leave wages as separate Social Security tax calculations under the Families First Coronavirus Response Act, alongside the employee retention credit and refundable wage credits introduced by CARES Act provisions.
Preparation Steps
Employer Identification and Address Information
1. Verify the employer identification number (EIN) and ensure the current business address is entered
If your address differs from the prior return, check the box on Form 943, as the 2020 instructions require this notation for IRS processing accuracy. This helps the IRS maintain accurate records and ensures correspondence reaches you at the correct location.
Employee Count Reporting
2. Count agricultural employees in the pay period, including March 12, 2020, on line 1
This mid-March reporting date is a standard requirement used consistently across all Form 943 tax years for statistical purposes. The IRS uses this arbitrary date to gather uniform employment data. This requirement is not specific to 2020 and does not relate to Census Day (which occurred on April 1, 2020). Do not include household employees, persons who received no pay during the pay period, pensioners, or members of the Armed Forces in this count.
Wage Reporting and Social Security Tax Calculations
3. Calculate line 2 (wages subject to social security tax), excluding qualified sick leave wages and qualified family leave wages
Separately itemize lines 2a and 2b at their full wages, as the 2020 FFCRA guidance mandates dual tracking for these wage categories. Line 2 includes all regular cash wages and qualified wages for the Employee Retention Credit (excluding qualified health plan expenses). Enter the amount before deductions. Stop including an employee’s wages on lines 2, 2a, and 2b when the total taxable wages reach $137,700 for the year (the 2020 Social Security wage base limit).
4. Multiply line 2 by 12.4% (0.124) for line 3
This represents the combined employer and employee share of social security tax on regular wages. For qualified sick and family leave wages reported on lines 2a and 2b, multiply each by 6.2% (0.062) for lines 3a and 3b, respectively. The 2020 reduced social security rates apply only to the employer’s share of qualified sick and family leave wages. These special wage categories are exempt from the employer’s 6.2% portion, resulting in only the employee’s 6.2% being collected.
5. Report wages subject to Medicare tax on line 4 and multiply by 2.9% (0.029) for line 5
Include all wages without exclusion for sick or family leave, as Medicare tax applies uniformly under the 2020 instructions. Unlike the social security tax, there is no wage base limit for the Medicare tax. All wages paid during the year, including qualified sick leave wages, qualified family leave wages, and salaries exceeding the social security wage base, must be included on line 4.
Additional Medicare Tax and Federal Income Tax Withholding
6. Complete lines 6 and 7 for Additional Medicare Tax withholding only if wages exceed applicable thresholds
The Additional Medicare Tax rate of 0.9% applies to wages exceeding $200,000 in a calendar year. While the 2020 Form 943 does not alter this rate, the instructions clarify its applicability to agricultural wage situations. This is an employee-only tax with no employer match.
7. Enter federal income tax withheld on line 8
Sum lines 3, 3a, 3b, 5, 7, and 8 on line 9 to calculate total taxes before adjustments. This represents your total tax liability before any corrections or credits are applied.
Adjustments and Credits
8. Report any current-year adjustments on line 10
These may include corrections for errors discovered during 2020, adjustments for fractions of cents, or adjustments for sick pay. Line 11 then reflects total taxes after adjustments, which serves as the baseline for applying credits.
9. Complete Worksheet 1 (provided in 2020 instructions only) to separate nonrefundable and refundable portions
This worksheet is mandatory for any employer claiming qualified sick and family leave wage credits or employee retention credit in 2020. The worksheet helps you determine how much of each credit can offset your current tax liability (nonrefundable portion) versus how much may be claimed as an advance payment or refund (refundable portion). This detailed calculation ensures proper allocation between these two credit components.
10. Claim nonrefundable credits on lines 12a, 12b, and 12c; sum on line 12d
Line 12a is used for the qualified small business payroll tax credit for increasing research activities (Form 8974 required if claiming). Line 12b reports the nonrefundable portion of the credit for qualified sick and family leave wages. Line 12c reports the nonrefundable portion of the Employee Retention Credit. These credits reduce your tax liability but cannot exceed it—any excess becomes part of the refundable credit calculation.
Deposit Requirements and Tax Liability Reconciliation
11. Determine your deposit and reporting requirements based on line 13
If total taxes on line 13 are less than $2,500, do not complete line 17 or Form 943-A. If line 13 is $2,500 or more, complete the monthly summary on line 17 unless you are a semiweekly schedule depositor (in which case you must complete Form 943-A instead). Note that this $2,500 threshold is a standard requirement that applies to Form 943 across all years, not just 2020.
12. Report deferred employer and employee social security tax amounts on lines 14b and 14c
Include refundable credit portions from Worksheet 1 on lines 14d and 14e. Add all deposits, deferrals, and refundable credits on line 14f. Subtract Form 7200 advances (advance payments received during the year) on line 14g to calculate line 14h. Compare line 13 to line 14h to determine whether you have a balance due (line 15) or an overpayment (line 16). If you have an overpayment, indicate whether it should be applied to your next return or refunded to you.
Year-Specific Updates for 2020
FFCRA Qualified Leave Wages
Qualified sick leave wages and qualified family leave wages receive a reduced 6.2% employer social security tax under FFCRA (lines 2a, 2b, 3a, 3b). These lines and the special tax treatment are unique to 2020 and subsequent years, during which these provisions were extended. The employer share of social security tax does not apply to these qualified wages, providing immediate payroll tax relief to employers who paid employees for COVID-19-related leave.
Employee Retention Credit Structure
The Employee Retention Credit Worksheet (Worksheet 1) is introduced in the 2020 instructions to reconcile nonrefundable credits (limited by tax liability) against refundable credits (claimed on line 14e as an advance). This credit structure is specific to CARES Act provisions applicable to 2020 and later extended periods. The credit equals 50% of qualified wages (including qualified health plan expenses) up to $10,000 per employee for the year, providing a maximum credit of $5,000 per employee per year.
Form 7200 Advance Payment Mechanism
Form 7200 advances (Advance Payment of Employer Credits Due to COVID-19) are referenced on line 14g in 2020 and subsequent qualifying periods. Employers could request advance payment of the employee retention credit and credits for qualified sick and family leave wages. You must subtract cumulative advances received during the year from total deposits before calculating the final balance due, reflecting COVID-period administrative procedures designed to provide immediate cash flow relief to employers.
Qualified Expense Reporting
Lines 18–21 require reporting of qualified health plan expenses and qualified wages allocable to sick leave, family leave, and employee retention credit. These expense itemizations are 2020-specific reporting requirements that support credit calculations under expanded CARES Act rules—line 18 reports qualified health plan expenses allocable to qualified sick leave wages. Line 19 reports qualified health plan expenses allocable to qualified family leave wages. Line 20 reports qualified wages (excluding health plan expenses) for the Employee Retention Credit. Line 21 reports qualified health plan expenses allocable to qualified wages for the Employee Retention Credit.
Social Security Tax Deferral
The deferred social security tax deferral period, as outlined in Section 2302 of the CARES Act, runs from March 27, 2020, through December 31, 2020. This provision allows employers to defer payment of the employer’s share of social security tax. The deferral was authorized by Congressional legislation (the CARES Act), not by executive order. Half of the deferred amount must be deposited by December 31, 2021, and the remaining half by December 31, 2022. This deferral opportunity is unique to the 2020 taxation period and represents significant cash flow relief for agricultural employers during the pandemic.
Additionally, employers could defer withholding and payment of the employee’s share of social security tax on wages paid September 1 through December 31, 2020, but only for employees whose social security wages for a biweekly pay period were less than $4,000 (or equivalent for other pay periods). This employee-side deferral was authorized by a Presidential Memorandum dated August 8, 2020, and is reported on line 14c. This is separate from the employer-side deferral authorized by the CARES Act.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
