What is Form 944?
Also known as the IRS Form 944 or 944 tax form, the Form 944 is an annual payroll tax return that helps very small businesses that owe only a small amount of employment taxes every single year.
It is, the Employer’s Annual Federal Tax Return for very small businesses whose yearly tax liability is just $1,000 or less.
Instead of filing employment taxes quarterly with Form 941, eligible employers could file once a year with Form 944. This reduced paperwork while ensuring full compliance with payroll tax reporting.
| Important Update: Starting 2026, Form 944 will no longer be available. Employers must switch to Form 94. |
Who Needs to File Form 944?
Not every employer needs to file Form 944. Whether you’re eligible to file the form depends on the size of your payroll and your total annual employment tax liability.
Employers must withhold federal income tax, Social Security tax, and Medicare tax from employee wages. An Additional Medicare Tax applies to wages over $200,000 annually. Withheld amounts are credited toward employees’ federal tax liabilities.
(For detailed guidance, see IRS Pub. 15 or visit IRS.gov/EmploymentTaxes.)
However this decision isn’t up to the employer. The IRS will send you a written notice if you qualify. That notice is your confirmation to file Form 944 instead of Form 941. Without it, you can continue filing quarterly.
Form 944 is particularly advantageous for sole proprietors, small family-owned businesses, and small startups with one or two employees. Quarterly filings mean more paperwork for these businesses, which can increase the chances of errors and accuracy-related issues.
Form 944 vs. Form 941: Annual vs. Quarterly Filing
The biggest difference between the two forms is how often you file. Form 941 spreads reporting across the year with four separate quarterly filings, while Form 944 condenses everything into one single annual submission for smaller businesses.
In a nutshell, the Form 941 offers the IRS steady tax deposits from businesses with higher payroll expenses. On the other hand, Form 944 is primarily intended to ease compliance for employers with minimal tax liability.
What Information is Required on Form 944?
Before you start filling out the 944 form, you need accurate payroll and tax records. These include:
- Wages and compensation (total wages, tips, and other taxable compensation paid to employees during the year)
- Federal income tax withheld (withholding amounts from employees’ wages)
- Social Security and Medicare taxes (both the employer and employee share)
- Adjustments (items like sick pay, group-term life insurance, or other credits that reduce or increase liability)
- Advance earned income credit (if applicable)
- Deposits already made (any tax deposits you submitted during the year)
- Total liability (complete amount owed for the year)
The accuracy of the numbers you report on Form 944 must match your payroll records and payroll deposits. If the numbers don’t match, this could lead to notices, delays, and/or an audit. Employers who track their payroll data consistently throughout the year have a much easier time filing.
How Do You Fill out Form 944?
Filling out Form 944 IRS requires attention to detail. Each section reports different employment taxes.
- Enter your business information (Employee Identification Number (EIN), business name, and address).
- Report wages, tips, and other compensation.
- Calculate withheld federal income tax.
- Enter Social Security and Medicare tax amounts.
- Apply any adjustments.
- Calculate your total tax liability.
- Report deposits made during the year.
- Sign and date the form before submitting.
The Form 944 instructions from the IRS provide line-by-line guidance. Double-check entries before submission. Please note that the Social Security tax rate is 6.2% for both employer and employee, applied up to a wage base of $168,600 in 2024. The Medicare tax rate is 1.45% each, with no wage base limit.
These taxes apply to household workers earning $2,700 or more in cash wages and election workers earning $2,300 or more in cash or equivalent pay in 2024.
The COVID-19 sick and family leave credit covered leave from April 1, 2020, to September 30, 2021. Employers paying these wages in 2024 must file Form 944, then claim the credit on Form 944-X.
How to Submit Form 944?
You can file Form 944 in two ways:
- Electronically (e-file): This is recommended for faster processing and fewer errors. Many payroll software providers support e-filing.
- Paper filing: Mail the completed form to the IRS address listed in the instructions, based on your state.
Generally, the IRS urges filing electronically because it’s secure and also provides confirmation of submission.
5 Common Mistakes to Avoid
Even simple errors can create challenges for small businesses. Here are the most frequent mistakes with ways to handle them naturally:
- Using the wrong form: Filing Form 944 when you should file Form 941. Always follow the IRS notice and confirm your eligibility before submitting.
- Incorrect wage reporting: Misreporting wages or tips. Maintaining detailed payroll records throughout the year helps ensure that figures align when you file.
- Miscalculated Social Security or Medicare taxes: These are common calculation errors. Automated payroll systems accurately handle percentages and reduce manual errors.
- Late filing: Missing the January 31 (or February 10) deadline leads to penalties. Setting calendar reminders or using software alerts keeps deadlines visible.
- Unsigned forms: Do not forget to sign before submitting, as it invalidates the filing. Reviewing the form carefully at the end helps catch missing details.
Simple process checks during the year can prevent these issues entirely.
What is the Due Date to File Form 944?
For the 2024 tax year (filed in 2025), Form 944 is due January 31, 2025.
If you made all required deposits on time and in full, you get extra time. In that case, your due date is February 10, 2025.
FAQs About Form 944
1. How is Form 944 different from Form 941?
Form 944 is filed once a year, only by very small employers with under $1,000 annual liability. It is filed quarterly and used by most businesses for employment tax reporting.
2. Can I switch between Form 944 and Form 941 if my business changes?
No, you cannot switch freely. The IRS decides whether your business qualifies. If your payroll grows, the IRS will notify you to file Form 941 instead of Form 944.
3. What are the penalties for filing Form 944 late?
Late filing may result in fines, added interest, and IRS notices. The longer the delay, the higher the penalties. Filing on time and paying deposits throughout the year prevents these consequences.
4. What if I made a mistake on Form 944?
Mistakes can be corrected by filing Form 944-X, the adjusted return. This form allows you to fix reporting errors, adjust tax amounts, and ensure the IRS has accurate payroll and withholding details.
5. Is Form 944 being discontinued?
Yes. The IRS will eliminate Form 944 starting with the 2026 tax year. Employers who currently file annually will move to quarterly filing using Form 941 to report payroll taxes and federal withholdings.
