Form 941 (Quarterly Payroll) COVID Penalty Refund

Form 941 quarterly employer payroll filings assessed late-filing, late-deposit (§6656), or late-payment penalties during the Jan 20, 2020 – July 10, 2023 window may be eligible for refunds under Kwong. Multiple quarters can stack. File Form 843 by July 10, 2026 for each affected quarter. Refund eligibility is not guaranteed; Kwong is being appealed.

Who qualifies

Employers required to file Form 941 each quarter were among the most active filers during the pandemic. Form 941 has multiple penalty exposure points: §6651 for failure-to-file or pay, §6656 for failure-to-deposit, and interest charges. Penalties assessed on any of these during the disaster window may be eligible. Note: Form 941 filings related to the Employee Retention Credit (ERC) involve separate issues outside the Kwong reasoning.

• Employer account transcript shows §6651 or §6656 penalty assessments on Form 941 dated between Jan 20, 2020 and July 10, 2023.
• The penalty applied to a quarter's Form 941 due date that fell within the disaster window (Q1 due Apr 30, Q2 Jul 31, Q3 Oct 31, Q4 Jan 31).
• Multiple quarters can each be claimed separately — each affected quarter requires its own assessment review.

How much could I get back?

Form 941 penalty refunds vary widely based on payroll size and how many quarters were affected. Small employers may see hundreds of dollars per quarter; larger employers with substantial payroll-deposit penalties may see thousands per quarter, with multiple-quarter exposure compounding. Refund eligibility and amounts cannot be guaranteed.

Why this specifically

Form 941 was filed continuously throughout the pandemic — every quarter from Q1 2020 through Q2 2023 was inside the disaster window. That's 14 quarters of potential penalty exposure for affected employers. Most employers paid §6656 deposit penalties without challenge; Kwong creates a structured basis to revisit those.

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