Form 943 (2021) Agricultural Employer Tax Return Checklist
Form 943 reports annual federal employment taxes for agricultural workers. The 2021 tax year introduces separate wage and credit tracking for qualified sick and family leave, based on leave dates relative to April 1, 2021, as well as new employee retention credit and recovery startup business eligibility rules unique to this tax year. This comprehensive checklist guides agricultural employers through the specific requirements and regulatory changes applicable to the 2021 filing period.
Completion Steps
1. Employee Count Verification
Verify employee count as of the March 12, 2021 payroll period and enter on line 1. This specific date snapshot requirement applies to the 2021 tax year filing. Count only agricultural employees on your payroll during the pay period that included March 12, 2021. Do not include household employees or employees in non-pay status for that specific pay period.
2. Qualified Leave Wage Bifurcation
Separate qualified sick leave wages by pre- and post-April 1, 2021 dates on lines 2a/2b and line 22. Report leave taken before April 1, 2021, on line 2a (qualified sick leave) and line 2b (qualified family leave). Report leave taken after March 31, 2021, and before October 1, 2021, on line 2 (included with other wages) and reference line 22 for credit calculations. This bifurcation is unique to the 2021 Form 943 instructions and reflects the extension and modification of COVID-19 relief provisions under the American Rescue Plan Act of 2021.
3. Social Security Tax Calculations
Calculate social security tax on line 2 at 12.4% (0.124) for standard wages, including qualified leave wages for leave taken after March 31, 2021. Calculate separate social security tax on lines 3a and 3b at the reduced rate of 6.2% (0.062) for each category of qualified leave wages paid for leave taken before April 1, 2021. The reduced rate applies because these wages are not subject to the employer share of social security tax—only the employee share applies. This differential tax treatment reflects pandemic-period employment tax relief provisions where the federal government effectively subsidized the employer portion for early 2021 leave.
4. Medicare Tax Reporting
Report Medicare tax on line 5 at 2.9% (0.029), consisting of 1.45% each for employer and employee. Report Additional Medicare Tax on line 7 at 0.9% (0.009) for employees whose Medicare wages exceed the applicable threshold ($200,000 for single filers, $250,000 for joint filers). These rates apply uniformly across all 2021 agricultural wage categories with no year-specific modifications for qualified leave wages.
5. Nonrefundable Credit Claims
Claim nonrefundable credits on line 12 only if eligible. Include line 12a (qualified small business payroll tax credit for increasing research activities), line 12b (nonrefundable sick/family leave credit for pre-April 1 leave), line 12c (nonrefundable employee retention credit), line 12d (nonrefundable sick/family leave credit for post-March 31 leave), and line 12e (nonrefundable COBRA premium assistance credit). The 2021 tax year marks the first time these stacked credits appear with this structure on the agricultural form, reflecting the layered COVID-19 relief legislation enacted throughout 2020 and 2021.
6. Refundable Credit Reporting
Report refundable credit portions separately on line 14 using the appropriate sublines. Include line 14d (refundable sick/family leave for pre-April 1), line 14e (refundable employee retention credit), line 14f (refundable sick/family leave for post-March 31), and line 14g (refundable COBRA premium assistance credit). This segregation of refundable versus nonrefundable credit components is a new feature introduced in the 2021 Form 943. It allows employers to receive credits exceeding their total tax liability as refunds rather than merely reducing taxes owed to zero.
7. Monthly Summary Requirements
Complete line 17 monthly summary only if you meet both conditions: you were a monthly schedule depositor for the entire year AND line 13 (total taxes after adjustments and credits) is $2,500 or more. Skip line 17 if total taxes after credits are under $2,500, or if you were a semiweekly schedule depositor during any part of the year. Semiweekly depositors must complete Form 943-A instead. Monthly depositor status is determined by whether your total taxes during the lookback period (the second calendar year preceding the current year) were $50,000 or less. The $2,500 threshold remains unchanged from prior years but is critical for determining deposit versus payment-with-return eligibility in 2021.
8. Recovery Startup Business Credit Tracking
Report recovery startup business employee retention credit separately on lines 28 and 29 if your business qualifies solely as a recovery startup in Q3 or Q4, 2021. Line 28 captures credits for the third quarter (July 1 through September 30, 2021), while line 29 captures fourth quarter credits (October 1 through December 31, 2021). This line set is unique to the 2021 tax year for tracking recovery startup business ERC eligibility.
A recovery startup business is defined as an employer that: (1) began carrying on a trade or business after February 15, 2020; (2) had average annual gross receipts of $1 million or less for the three tax years ending with the tax year before the calendar quarter in which the credit is claimed; and (3) for Q3 only, is not otherwise eligible for ERC through suspended operations or significant revenue decline. Note that under the Infrastructure Investment and Jobs Act, only recovery startup businesses can claim ERC for the fourth quarter of 2021.
9. Required Form Attachments
Attach Form 8974 if claiming the qualified small business payroll tax credit for increasing research activities on line 12a. Form 8974 is a mandatory attachment for this credit in 2021 and must accompany your Form 943 filing. This credit allows qualified small businesses to elect to claim up to $250,000 of their research credit against the employer share of social security tax.
10. Amended Return References
Reference Form 943-X amounts in line 14a if reporting prior-year adjustments or corrections. If you filed Form 943-X during 2021 to correct a prior year return and received a refund or credit that you applied to your 2021 tax liability, include those amounts on line 14a along with your current year deposits. Form 943-X is filed separately from Form 943 when corrections to previously filed returns are necessary.
11. Signature Requirements
Complete all three pages and sign under penalties of perjury. The IRS will not process returns that are unsigned. If a third party prepares the return, the preparer's signature and Preparer Tax Identification Number (PTIN) are required for the 2021 tax year. The signature certifies that the information provided is accurate, correct, and complete to the best of your knowledge.
12. Payment Voucher Usage
Use Form 943-V payment voucher when paying by check or money order with your return. Form 943-V should be used if you were not required to make federal tax deposits (line 13 is less than $2,500) OR if you are a monthly schedule depositor making a payment under the Accuracy of Deposits Rule as described in section 7 of Publication 51 (Circular A). Complete the voucher to ensure your payment is credited promptly and accurately to your account. Do not staple the voucher to the form or check. Make checks or money orders payable to “United States Treasury” and include your EIN, “Form 943,” and “2021” on the payment.
Year-Specific 2021 Regulatory Updates
COVID-19 Leave Wage Split (April 1, 2021 Cutoff)
Pre-April 1 leave wages are reported on lines 2a/2b with a separate social security calculation at 6.2%. Post-March 31 leave wages are reported on line 2, with the standard 12.4% social security tax, and are tracked separately on line 22 for credit purposes. This bifurcation reflects the temporary nature of 2021 pandemic-era tax relief provisions enacted under the Families First Coronavirus Response Act, as extended and modified by subsequent legislation.
Qualified Health Plan Expense Tracking
Lines 18–19 (pre-April 1) and lines 23, 26 (post-March 31) require separate documentation of qualified health plan expenses allocable to qualified leave wages. These health plan expenses increase credits, and allocations differ based on the leave period in 2021.
Employee Retention Credit Expansion
Lines 12c (nonrefundable) and 14e (refundable) allow agricultural employers to claim ERC for the first time in 2021 if meeting quarterly wage decline tests (gross receipts less than 80% of the same quarter in 2019) or government order suspension tests. For wages paid before July 1, 2021, the nonrefundable portion applies against the employer's social security tax. For wages paid after June 30, 2021, it applies against the employer Medicare tax.
Recovery Startup Business Q3/Q4 Eligibility
Lines 28–29 isolate ERC amounts claimed under recovery startup business rules for Q3 and Q4 in 2021 only. Recovery startup businesses must have begun operations after February 15, 2020, and maintained average annual gross receipts of $1 million or less per year.
COBRA Premium Assistance Credit
Lines 12e (nonrefundable) and 14g (refundable) allow employers to claim COBRA subsidy credits in 2021 under American Rescue Plan Act provisions. This credit covers premium assistance provided to assistance-eligible individuals for periods of coverage beginning April 1, 2021, through September 30, 2021.
Form 7200 Advance Repayment Integration
Line 14i requires the entry of total advances received from 2021 Form 7200 (Advance Payment of Employer Credits Due to COVID-19), with Line 14j calculating the net position before final reconciliation. This advanced mechanism allowed employers to receive anticipated credits before filing their annual return and is unique to 2021 payroll processing.
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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.
