IRS Form 944 is the Employer's Annual Federal Tax Return. The form was introduced by the IRS to give smaller employers a break in filing and paying federal income tax withheld from employees, as well Social Security and Medicare payments owed by employers and employees.
Employers whose annual payroll tax liability is $1,000 or less can use Form 944 to file only once a year instead of quarterly. Form 944 cannot be used by household employers or agricultural employers.
What Is Form 944?
All employers are required to withhold from their employees' pay federal income taxes, state income taxes where applicable, and FICA taxes for Social Security and Medicare. They must report and pay these taxes to the IRS, along with contributing an amount for FICA taxes equal to the amounts withheld from employees' pay. Form 944 is the reporting form for providing all this information to the IRS.
Form 944 also asks for information regarding the Additional Medicare Tax that is withheld from high-income employees and that must be paid along with the other employment taxes. This additional tax isn't required to be paid by the employer, however.
Who Uses Form 944?
Form 944 is used by smaller employers instead of IRS Form 941, the Employer's Quarterly Employment Tax Return. You can only file Form 944 if the IRS gives you written approval to do so. You must make a request to the IRS to file this form instead of Form 941.
You're eligible to file this form if your liability for Social Security, Medicare, and withheld federal income taxes is $1,000 or less for the entire year. Your payroll tax liability is the total amount you must pay to the IRS for these taxes, and it includes:
- The amounts you've withheld from employee pay for federal income taxes
- The amounts you've withheld from employee pay for Social Security taxes and Medicare taxes
- The amounts your business must pay to match the Social Security and Medicare taxes paid by your employees
Where to Get Form 944
Form 944 is available on the IRS website. You can complete it online, download a copy, or you can print out a copy from the website.
How to Fill Out Form 944
Form 944 requires the total figures for all your employees for the year, including wages paid to them, tips they've received, federal income tax you withheld from their pay, and employer and employee portions of Social Security and Medicare taxes. It subtracts certain adjustments and credits for research activities. The result is the total tax due.
This amount you've arrived at after completing Form 944 is compared to the total deposits you've already made for the year. This will tell you either the balance that's due or that you've overpaid.
Can Form 944 Be e-Filed?
You can e-file Form 944, but you'll need tax preparation software that's up to the task. Your other option is to have a tax professional e-file the form for you.
You can make a payment at the same time if necessary using electronic funds withdrawal.
Where to Mail Form 944
IRS mailing addresses for Form 944 depend on the state where you're located, as well as whether you're enclosing a payment with the form. The IRS provides a list of addresses on its website.
Requirements for Filing Form 944
New employers must include information about the highest number of expected employees in their first year of operation on their applications for an Employer ID Number (EIN). This information will generate an "eligible to file Form 944" letter.
Existing businesses must reach out to the IRS to make the request. You can't file Form 941 if you're notified by the IRS that you're required to file Form 944.
You’re generally likely to pay $1,000 or less in employment taxes if you pay $5,000 or less in wages subject to Social Security and Medicare taxes and federal income tax withholding during the calendar year based on current tax rates.
Your request to file Form 944 must be made in writing between January 1 and March 15 of the current year, or by phone at 800-829-4933 between January 1 and April 1 of the current year.
Form 944 must be filed by January 31 of the year after the year being reported. You have until February 10 of the following year to file this form if you made deposits on time and in full.
Your liability is equal to the total of all withholding for income taxes and FICA taxes, and it includes the total amount owed by the company for its contribution to FICA taxes. The amount of your liability for employment taxes determines the deadlines by which these payroll taxes must be paid:
- Employment taxes for your business included on Form 944 can be paid when you file Form 944 if your total tax liability is less than $2,500 for the year
- You can deposit by the last day of the month after the end of a quarter if your total tax liability is $2,500 or more for the year but less than $2,500 for the quarter
- You can pay the fourth quarter's tax liability with Form 944 if your fourth quarter tax liability is less than $2,500
- You must deposit monthly or semi-weekly, depending upon your schedule, if your total tax liability is over $2,500 for a quarter
You must make payroll tax deposits using the IRS EFTPS system, no matter what the amount of your payroll tax liability.
- IRS Form 944 allows smaller employers to report and pay federal payroll taxes once a year rather than quarterly. The form is used instead of Form 941.
- Businesses require written approval from the IRS to use this form.
- Deadlines apply to requesting to use IRS Form 944.
- You must make your payroll tax deposits using the IRS EFTPS system if you use this form.
NOTE: This information is a general overview. Payroll taxes are complicated, and there are fines and penalties for mistakes made in Form 944 that can change the amount you must pay or that can result in a delay in filing or paying payroll taxes. Get help from your tax professional or consider outsourcing your payroll tasks if you have concerns about completing this form.