New Filing Alternatives for Form 941
The Internal Revenue Service has set a deadline of January 2003 to end both the magnetic tape and the electronic data interchange (EDI) methods of filing for Form 941, Employer's Quarterly Federal Tax Return. In addition, the magnetic tape filing program for Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return will end at the same time.
Instead, the IRS plans to institute an e-file process for both of these forms. Currently, U.S. businesses use the magnetic tape process for filing approximately 1.8 million Forms 941 and 700,000 Forms 940.
The taxing agency is examining e-filing options including proprietary software, XML, and other methods.