Preparing and Filing Form 944

Employer's Annual Federal Tax Return

IRS Form 944 Information for Employers
IRS Form 944 Information for Employers. ericsphotography/Getty Images

IRS Form 944 - What is it?

IRS Form 944 - Employer's Annual Federal Tax Return was initiated by the IRS several years ago to give smaller employers a break in filing and paying federal payroll taxes (federal income tax withheld from employees, and social security and Medicare payments owed by employers and employees).

The IRS says the purpose of form 941 is to allow employers whose annual payroll tax liability (as described below) is $1,000 or less to file only once a year instead of quarterly.

Form 944 is used for these smaller employers instead of IRS Form 941 - the  Employer's Quarterly Employment Tax Return. 

All employers are required to withhold federal income taxes, state income taxes (where applicable), and FICA taxes (Social Security and Medicare taxes) from employee pay, and to report and pay these taxes to the IRS, along with an amount equal to the amounts withheld from employees for FICA taxes. Form 944 is the reporting mechanism for providing this information to the IRS. 

Form 944 also includes information on the Additional Medicare Tax that is withheld from high-income employees, that must be paid along with the other employment taxes. 

Who Must File Form 944

 The IRS notifies smaller employers that they are eligible to file Form 944 instead of Form 941. Eligible employers are those whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less for the entire year.

 

If you have been notified by the IRS that you must file Form 944, you may not file Form 941 instead. But you may send a request to the IRS to be allowed to file Form 941 instead. The information about submitting a request to file Form 941 is in the instructions for Form 944. 

Form 944 cannot be used for household employers or for agricultural employers.

 

If you are a new employer and you estimate that your employment

When to File Form 944

Form 944 must be filed by January 31 of the year after the year being reported. For 2016, file Form 944 by January 31, 2017. If you made deposits on time and in full payment, you have until February 10, 2017 to file this form. 

When Employment Taxes Must Be Paid

When the employment taxes must be paid depends on the amount of your liability for employment taxes. The liability is equal to the total of all withholdings (for income taxes and FICA taxes) and including the total amount owed by the company.

  • If your total tax liability is less than $2,500 for the year, employment taxes for your business included on Form 944 may be paid when you file Form 944. 
  • If your total tax liability is $2,500 or more for the year, but less than $2,500 for the quarter, you can deposit by the last day of the month after the end of a quarter. However, if your fourth quarter tax liability is less than $2,500, you may pay the fourth quarter's tax liability with Form 944.
  • If your total tax liability of over $2,500 for a quarter, you must deposit monthly or semi-weekly, depending upon your schedule. 

Information Included on Form 944

Form 944 is used to file (this information is for a calendar year): 

 Here's a copy of IRS Form 944 and a copy of the IRS Instructions for the 944