What IRS Form 943 (2020) Is For

Form 943 is the Employer's Annual Federal Tax Return for Agricultural Employees, used specifically by agricultural employers to report federal income tax withholding, Social Security, and Medicare taxes for farmworkers. You must file Form 943 if you paid wages to one or more farmworkers and those wages were subject to Social Security and Medicare taxes or federal income tax withholding under either the $150 test (paying any farmworker $150 or more in cash wages) or the $2,500 test (paying $2,500 or more total to all farmworkers). Unlike Form 941 which is filed quarterly for all other employees, Form 943 is filed annually and covers only agricultural employees.

When You'd Use Form 943 for 2020 (Late or Amended Filing)

If you're filing Form 943 for 2020 now, you're likely responding to an IRS notice about an unfiled return, discovered errors requiring correction, or need to claim COVID-19 related credits you missed on your original return. The original deadline was February 1, 2021 (or February 10, 2021, if all taxes were deposited timely). Late filing scenarios typically arise when employers receive balance due notices, want to claim refunds within the statute of limitations, or discover payroll tax reporting errors. For corrections to a previously filed 2020 Form 943, you'll need Form 943-X (Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund) rather than filing another Form 943.

Key Rules Specific to 2020

The 2020 tax year introduced significant COVID-19 related provisions that don't apply to other years. Agricultural employers could claim new credits for qualified sick and family leave wages (reported on lines 12b and 14d), with these wages exempt from the employer share of Social Security tax. The employee retention credit was also available (lines 12c and 14e) for qualifying employers. Employers could defer the employer share of Social Security tax on wages paid from March 27, 2020, through December 31, 2020, and defer the employee share of Social Security tax on wages paid September 1-December 31, 2020 (only if biweekly wages were under $4,000). Advanced payments received via Form 7200 had to be reconciled on line 14g (IRS Instructions for Form 943 (2020)). These COVID-19 provisions were temporary and don't apply to current tax years.

Step-by-Step (High Level)

• Gather your records: Obtain wage records, payroll tax deposits, and any Form 7200 advance payments for 2020. Request account transcripts from the IRS to verify what's already on file and any penalties assessed.
• Complete the correct-year form: Use the 2020 version of Form 943, available in the IRS prior year forms section. Include all COVID-19 credits and deferrals if applicable. For corrections, use Form 943-X instead.
• Attach required schedules: Include Form 943-A if you were a semiweekly depositor, Schedule R if filing as an aggregate filer, and supporting documentation for any credits claimed.
• Submit your return: Mail to the appropriate IRS processing center based on your location (addresses differ for returns with and without payments). Electronic filing is encouraged and available through authorized e-file providers (IRS.gov/EmploymentEfile).
• Keep complete copies: Maintain copies of all forms, supporting documents, and payment records for at least four years, as the IRS may need to verify your filing.

Common Mistakes and How to Avoid Them

• Confusing Form 943 with Form 941: Form 943 is only for agricultural employees and filed annually, while Form 941 covers all other employees and is filed quarterly. If you employ both types, you need both forms.
• Missing the Social Security wage base: Stop including wages in Social Security calculations once an employee reaches $137,700 for 2020, but continue Medicare tax withholding on all wages without limit.
• Incorrectly reporting COVID-19 credits: Qualified sick and family leave wages aren't subject to employer Social Security tax, so calculate at 6.2% not 12.4%. Don't double-count wages between regular reporting lines and COVID credit lines.
• Deposit schedule confusion: If your annual tax liability exceeds $2,500, you must make electronic deposits throughout the year using either monthly or semiweekly schedules—you can't wait until filing (IRS Instructions for Form 943 (2020)).
• Failing to reconcile with Forms W-2: Your Form 943 totals for federal income tax withheld, Social Security wages, and Medicare wages must match your Form W-3 transmittal totals.
• Using wrong mailing addresses: IRS processing addresses changed for many locations. Use current addresses from official instructions, not prior year information.

What Happens After You File

The IRS typically processes paper returns within 6-8 weeks and electronic returns within 2-3 weeks. You'll receive notices if there are processing issues, mathematical errors, or additional information needed. If you owe money, you'll get a bill with payment options including online payment agreements (Form 9465) for amounts you can't pay immediately. The failure-to-pay penalty is 0.5% per month up to 25%, but this rate is halved while an approved installment agreement is in effect (IRS.gov/payments/payment-plans-installment-agreements). Interest continues to accrue on unpaid balances at rates set quarterly by the IRS. If you disagree with any IRS determination, you have appeal rights through the Office of Appeals, and the IRS will explain these rights in any adverse determination notice.

FAQs

Can I still file Form 943 for 2020 electronically?

Yes, electronic filing remains available for prior year returns through the IRS e-file system, though paper filing is also accepted.

What penalties apply to late-filed 2020 returns?

The failure-to-file penalty is 5% of unpaid tax per month (up to 25%), plus failure-to-pay penalties and interest. However, if you're due a refund, there's no failure-to-file penalty (IRS.gov/payments/failure-to-pay-penalty).

How do I get my 2020 payroll tax transcripts?

Request business tax transcripts online at IRS.gov, by phone at 800-908-9946, or mail Form 4506-T. Allow 2-3 weeks after electronic filing or 6-8 weeks after paper filing before transcripts become available (IRS.gov/businesses/get-a-business-tax-transcript).

Is there still time to claim 2020 COVID-19 employment credits?

Yes, you can claim missed credits by filing Form 943-X, but act promptly as there are statute of limitations considerations for refund claims.

Should I amend my state agricultural payroll returns too?

Check with your state tax agency, as state requirements vary and don't automatically follow federal corrections. Many states have separate agricultural employer reporting requirements.

What if I discover errors after filing my late 2020 return?

File Form 943-X to correct errors on previously filed Form 943 returns. Each correction requires a separate Form 943-X for the specific tax year being corrected (Instructions for Form 943-X).

Can I set up a payment plan for 2020 agricultural payroll taxes?

Yes, the IRS offers various payment options including online installment agreements, short-term payment plans, and offers in compromise for qualifying taxpayers who can't pay in full (IRS.gov/payments/payment-plans-installment-agreements).

‍