What Is Form 944? Complete Guide & Requirements

Form 944 is the Employer’s Annual Federal Tax Return that lets the smallest employers report and pay federal payroll taxes once a year instead of every quarter. It is aimed at businesses whose total yearly liability for Social Security, Medicare, and withheld federal income tax is $1,000 or less. The IRS must notify you that you are eligible, or approve your request to use it.

Definition

What is Form 944: an annual return for reporting federal income tax withheld from employees, the employer and employee shares of Social Security and Medicare taxes, and Additional Medicare Tax withheld. It replaces quarterly Form 941 only for eligible small employers.

• Key characteristics: once per calendar year filing, covers wages and tips, includes adjustments such as fractions of cents or third-party sick pay when applicable.
• Legal requirements: generally limited to employers with annual employment tax liability of $1,000 or less and only if the IRS tells you to file 944 or approves your written or phone request. If you were not notified, you must file 941 quarterly.

When You Need It

• Specific use cases: very small payrolls that produce no more than $1,000 of combined FICA and withheld income tax for the year may qualify to file 944 annually instead of 941 quarterly.
• How eligibility works: the IRS either assigns you to file 944 or you request the change. To request 944 filing for the current year, call the IRS by April 1 or send a written request postmarked by mid March to the address listed in the instructions. You must wait for written approval before switching.
• Who cannot use Form 944: household employers and employers that file Form 943 for agricultural employees do not file 944. Others cannot file 944 unless the IRS has notified them to do so.
• Deadlines: Form 944 is due January 31 following the calendar year. If you made all required deposits on time and in full, you may file by February 10. If the due date falls on a weekend or legal holiday, you may file the next business day.

How It Works

Step by step

1. Confirm your filing requirement: use 944 only if the IRS has told you to, or after you receive written approval of your request. Otherwise file Form 941 each quarter.
2. Set up payments: most employers must deposit employment taxes electronically. Use the Electronic Federal Tax Payment System, or an approved electronic option, to make deposits.
3. Determine your deposit schedule: the schedule is monthly or semiweekly based on your lookback period under Notice 931. If you ever accumulate $100,000 or more of employment taxes on any day, deposit by the next business day.
4. Check the $2,500 rule: if your total yearly tax on Form 944 will be less than $2,500, you may pay the entire amount with the return instead of making deposits. If it is $2,500 or more, deposits are generally required. {index=11}
5. Complete the form: report wages and tips, federal income tax withheld, Social Security and Medicare tax, and any adjustments. Follow the line-by-line instructions.
6. File by the due date: e-file or mail the return by January 31, or by February 10 if you deposited on time and in full. Keep your EFTPS confirmations and payroll records with your files.

Required documentation

• Employer Identification Number notice and any IRS filing requirement letter
• Payroll journals and registers showing wages, tips, taxable benefits, and withholding
• Employee Forms W-4, copies of Forms W-2 and the transmittal Form W-3
• EFTPS deposit confirmations and schedules
• Any prior year adjustments and, if needed, a completed Form 944-X to correct errors

Best practices

• Use an approved IRS e-file provider for accuracy and acknowledgment of receipt.
• Put EFTPS reminders on your calendar and initiate electronic deposits the day before the due date cutoff time.
• Monitor your year-to-date liability. Crossing the $2,500 threshold triggers deposit requirements even if you will still file 944 at year end.
• Watch for the $100,000 next-day deposit rule and for deposit schedule changes based on your lookback period.
• If your business closes or transfers, file a final return or follow the instructions for reorganizations and sales.

Common Questions

Not freely. You must file 944 only if the IRS assigns you to it or approves your request. Without IRS notification, file 941 each quarter.

You still file 944 for that year unless the IRS changes your requirement. You may need to start making deposits if your liability exceeds deposit thresholds.

Yes, but only if your total 944 tax for the year is under $2,500. Otherwise deposits are required under the federal tax deposit rules.

Employers follow monthly or semiweekly schedules based on the lookback period in Notice 931. If you accumulate $100,000 or more in a single day, you must deposit by the next business day.

Typically, January 31 for the prior calendar year. If all required deposits were made on time and in full, you may file by February 10.

To request 944 filing, call the IRS Business and Specialty Tax Line by April 1 or mail a written request by mid March to the address listed in the instructions. To switch back to quarterly 941 filing, contact the IRS by the same dates. Wait for written confirmation before changing forms.

No. Household employers use Schedule H and agricultural employers generally file Form 943 instead.

No. Most employers also must file Form 940 for federal unemployment tax, which is separate from Form 944.

Use Form 944-X, Adjusted Employer’s Annual Federal Tax Return or Claim for Refund. The instructions explain correction methods and time limits for claims.

Professional Help

• When to seek assistance: if your deposit schedule changes, if you approach the $100,000 next-day deposit trigger, if you had a business sale or reorganization, or if you need to correct a filed return.
• Filing services available: you can e-file Form 944 yourself or work with an approved IRS business e-file provider. The IRS lists authorized providers and encourages electronic filing for accuracy and confirmation.

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