What is Form 944?

Form 944, Employer’s Annual Federal Tax Return, allows small business owners whose annual liability for Social Security, Medicare, and withheld federal income taxes is $1,000 or less, to file and pay employment taxes once a year instead of every quarter. This information would generally be reported on Form 941, Employer’s Quarterly Federal Tax Return, but the 944 tax form was created to help reduce the burden of these quarterly filings for those small employers who are eligible.

Who must file Form 944?

The IRS will notify you in writing if you must file Form 944 to report your Social Security, Medicare and withheld federal income taxes instead of Form 941, 941-SS or 941-PR. 

However, new employers are eligible to file Form 944 if they meet (or will meet) the eligibility requirements. When completing Form SS-4 or Form SS4-PR to apply for an Employer Identification Number (EIN), you must indicate the highest number of employees anticipated in the next 12 months. Check the box on line 14 to indicate if you expect to have a total amount of $1,000 or less in employment tax liability for the calendar year and would like to file Form 944.

Once notified, you must file Form 944 to report any of the following that apply to  your business:

• Employee wages you have paid
• Tips your employees reported to you
• Federal income tax you withheld
• Both the employer and the employee share of Social Security and Medicare taxes
• Additional Medicare Tax withheld from employees
• Current year’s adjustments to Social Security and Medicare taxes for fractions of cents, sick pay, tips, and group-term life insurance
• Deferred amount of the employer share of Social Security tax
• Deferred amount of the employee share of Social Security tax
• Qualified small business payroll tax credit for increasing research activities
• Credit for qualified sick and family leave wages

Please note: Household employers, agriculture employers, and employers who are not notified may not file Form 944.

What is the difference between Form 944 and Form 941?

While both forms are used to report FICA (which consists of Social Security + Medicare tax) and income tax withholding to the IRS, there are only two major differences between Form 944 and Form 941. If you need to submit Form 944, it’s filed annually, while Form 941 is filed quarterly, and the total annual tax liability reported on Form 944 is less than $1,000 vs. no annual limit reporting requirement for Form 941. 

When do you pay?

If your tax liability is less than $2,500 for the year, you can pay the amount due with Form 944.  However, in order to avoid a penalty, you should pay the taxes in full and file Form 944 on time. 

Please note: The $2,500 threshold at which federal tax deposits must be made differs from the amount of annual tax liability that makes an employer eligible to file Form 944. If your business grows during the year, you may be required to change your federal tax deposit schedule.

Federal Tax Deposit Requirements for Form 944 Filers

If your tax liability is:	Your deposit requirement is:
Less than $2,500 for the year	No deposit required. You may pay the tax with your return. If you’re unsure that your tax liability for the year will be less than $2,500, deposit under the rules below.
$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.
$2,500 or more for the quarter	You must deposit monthly or semiweekly depending on your deposit schedule. But, if you accumulate $100,000 or more of taxes on any day, you must deposit the tax by the next business day. See section 11 of Pub. 15, section 8 of Pub. 80, or section 11 of Pub. 179.

How to fill out Form 944

According to the instructions for Form 944, here is how you fill it out. Begin by entering your Employer Identification Number (EIN), business name, trade name (if applicable), and address, then work your way through the rest of the form line-by-line.

Part 1: Answer these questions for this year

Line 1: Wages, tips, and other compensation. Enter amounts on line 1 that will be included in box 1 of your employees’ Forms W-2. This includes sick pay paid by your agent and sick pay paid by a third party that isn’t your agent (for example, an insurance company) if you received timely notice of the payments and the third party transferred liability for the employer’s taxes to you.

Line 2: Federal income tax withheld from wages, tips, and other compensation. Enter the federal income tax that you withheld (or were required to withhold) from your employees on this year’s wages, including qualified sick leave wages paid in 2022 for leave taken after March 31, 2020, and before October 1, 2021, and qualified family leave wages paid in 2022 for leave taken after March 31, 2020, and before October 1, 2021, tips, taxable fringe benefits, and supplemental unemployment compensation benefits.

Line 3: If no wages, tips, and other compensation are subject to Social Security or Medicare tax, check the box and go to line 5.

Lines 4a–4e: Taxable Social Security and Medicare wages and tips:

Line 4a: Taxable Social Security wages. Enter the total wages, including qualified sick leave wages and qualified family leave wages paid in 2022 for leave taken after March 31, 2021, and before October 1, 2021; sick pay; and taxable fringe benefits subject to social security taxes that you paid to your employees during the year. Don’t include the qualified sick leave wages paid in 2022 reported on line 4a(i) or qualified family leave wages paid in 2022 reported on line 4a(ii) for leave taken after March 31, 2020, and before April 1, 2021.

Line 4a(i): Qualified sick leave wages. Enter the qualified taxable (subject to social security tax) sick leave wages you paid in 2022 to your employees for leave taken after March 31, 2020, and before April 1, 2021. Qualified sick leave wages for leave taken after March 31, 2020, and before April 1, 2021, aren’t subject to the employer share of Social Security tax.

Line 4a(ii): Qualified family leave wages. Enter the qualified taxable (subject to social security tax) family leave wages you paid in 2022 to your employees for leave taken after March 31, 2020, and before April 1, 2021. Qualified family leave wages for leave taken after March 31, 2020, and before April 1, 2021, aren’t subject to the employer share of Social Security tax.

Line 4b: Taxable Social Security tips. Enter all tips your employees reported to you during the year until the total of the tips and taxable wages, including wages reported on line 4a, qualified sick leave wages reported on line 4a(i), and qualified family leave wages reported on line 4a(ii), for an employee reach $147,000 for the year.

Line 4c: Taxable Medicare wages and tips. Enter all wages, including qualified sick leave wages paid in 2022 and qualified family leave wages paid in 2022, tips, sick pay, and taxable fringe benefits that are subject to Medicare tax.

Line 4d: Taxable wages and tips subject to additional Medicare tax withholding. Enter all wages, including qualified sick leave wages paid in 2022 and qualified family leave wages paid in 2022, tips, sick pay, and taxable fringe benefits that are subject to Additional Medicare Tax withholding. You’re required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year.

Line 4e: Total Social Security and Medicare taxes. Add the column 2 amounts on lines 4a–4d. Enter the result on line 4e.

Line 5: Total taxes before adjustments. Add the total federal income tax withheld from wages, tips, and other compensation from line 2 and the total Social Security and Medicare taxes before adjustments from line 4e. Enter the result on line 5.

Line 6: Current year’s adjustments. Enter tax amounts that result from current period adjustments. Use a minus sign (if possible) to show an adjustment that decreases the total taxes shown on line 5. Otherwise, use parentheses. These amounts can include adjustments for fractions of cents, sick pay, tips, and group-term life insurance.

Please note: If you need to adjust any amount reported on line 6 from a previously filed Form 944, complete and file Form 944-X.

Line 7: Total taxes after adjustments: Combine the amounts shown on lines 5 and 6, and enter the result on line 7.

Line 8a: Qualified small business payroll tax credit for increasing research activities. Enter the total credit from Form 8974, and attach the form.

Line 8b: Nonrefundable portion of credit for qualified sick and family leave wages for leave taken before April 1, 2021. Enter the nonrefundable portion of the credit for qualified sick and family leave wages from Worksheet 1, Step 2, line 2j, found in the instructions for Form 944.

Line 8c: Reserved for future use by the IRS. Leave this blank.

Line 8d: Nonrefundable portion of credit for qualified sick and family leave wages for leave taken after March 31, 2021, and before October 1, 2021. Enter the nonrefundable portion of the credit for qualified sick and family leave wages from Worksheet 2, Step 2, line 2p, found in the instructions for Form 944.

You’re almost there! Keep going!

Line 8e: Nonrefundable portion of COBRA premium assistance credit. Enter the nonrefundable portion of the COBRA premium assistance credit from Worksheet 3, Step 2, line 2e, found in the instructions for Form 944.

Line 8f: Number of individuals provided COBRA premium assistance for periods of coverage beginning on or after April 1, 2021, through periods of coverage beginning on or before September 30, 2021. If the coverage was for a former employee, spouse, and two children, you would include one individual on line 8f, and that individual is reported only once per year, even if assistance was received monthly.

Line 8g: Total nonrefundable credits. Add lines 8a, 8b, 8d, and 8e. Enter the result on line 8g.

Line 9: Total taxes after adjustments and nonrefundable credits. Subtract line 8g from line 7, and enter the result on line 9.

Please note: If line 9 is less than $2,500, you have the option to pay the amount with Form 944 or you may deposit the amount.

If line 9 is $2,500 or more, you generally must deposit the tax liability by Electronic Federal Tax Payment System (EFTPS). However, if you deposited all taxes accumulated in the first 3 quarters of the year and your fourth quarter liability is less than $2,500, you may pay the accumulated fourth quarter taxes with Form 944.

Line 10a: Total deposits for this year. Enter your deposits for this year, including any overpayment that you applied from filing Form 944-X, 944-X (SP), 941-X, or 941-X (PR) in the current year. Also include any overpayment from a previous period that you applied to this return.

Line 10b: Reserved for future use by the IRS. Leave this blank.

Line 10c: Reserved for future use by the IRS. Leave this blank.

Line 10d: Refundable portion of credit for qualified sick and family leave wages for leave taken before April 1, 2021. Only complete if the wages for this leave was paid in 2022 for leave taken after March 31, 2020, and before April 1, 2021. Enter the refundable portion of the credit for qualified sick and family leave wages from Worksheet 1, Step 2, line 2k, found in the instructions for Form 944.

Line 10e: Reserved for future use by the IRS. Leave this blank.

Line 10f: Refundable portion of credit for qualified sick and family leave wages for leave taken after March 31, 2021, and before October 1, 2021. Enter the refundable portion of the credit for qualified sick and family leave wages from Worksheet 2, Step 2, line 2q, found in the instructions for Form 944.

Line 10g: Refundable portion of COBRA premium assistance credit. Enter the refundable portion of the COBRA premium assistance credit from Worksheet 3, Step 2, line 2f. found in the instructions for Form 944.

Line 10h: Total deposits and refundable credits. Add lines 10a, 10d, 10f, and 10g. Enter the total on line 10h.

Line 10i: Reserved for future use by the IRS. Leave this blank.

Line 10j: Reserved for future use by the IRS. Leave this blank.

Line 11: Balance due. If line 9 is more than line 10h, enter the difference. Otherwise, see the instructions for line 12.

Line 12: Overpayment. If line 10h is more than line 9, enter the difference.

Please note: There should never be an entry on both lines 11 and 12.

Part 2: Your deposit schedule and tax liability for this year

Line 13: If the amount on line 9 is less than $2,500, check the first box on line 13 and go to line 14. If the amount is $2,500 or more, check the second box instead.

Part 3: About your business

Line 14: Check the box if your business has closed, and enter the last date you paid wages.

Lines 15, 16, 19-24 is where you will enter the amounts that you use on the worksheets at the end of these instructions to figure certain credits. If you’re claiming these credits, you must enter the applicable amounts.

Line 15: Enter the qualified health plan expenses allocable to qualified sick leave wages paid in 2022 for leave taken after March 31, 2020, and before April 1, 2021. This amount is also entered on Worksheet 1, Step 2, line 2b, found in the instructions for Form 944.

Line 16: Enter the qualified health plan expenses allocable to qualified family leave wages paid in 2022 for leave taken after March 31, 2020, and before April 1, 2021. This amount is also entered on Worksheet 1, Step 2, line 2f, found in the instructions for Form 944.

Line 17: Reserved for future use by the IRS. Leave this blank.

Line 18: Reserved for future use by the IRS. Leave this blank.

Line 19: Enter the qualified sick leave wages you paid in 2022 to your employees for leave taken after March 31, 2021, and before October 1, 2021. This amount is also entered on Worksheet 2, Step 2, line 2a, found in the instructions for Form 944.

Line 20: Enter the qualified health plan expenses allocable to qualified sick leave wages paid in 2022 for leave taken after March 31, 2021, and before October 1, 2021. This amount is also entered on Worksheet 2, Step 2, line 2b, found in the instructions for Form 944.

Line 21: Enter the collectively bargained defined benefit pension plan contributions and collectively bargained apprenticeship program contributions allocable to qualified sick leave wages paid in 2022 for leave taken after March 31, 2021, and before October 1, 2021. This amount is also entered on Worksheet 2, Step 2, line 2c, found in the instructions for Form 944.

Line 22: Enter the qualified family leave wages you paid in 2022 to your employees for leave taken after March 31, 2021, and before October 1, 2021. This amount is also entered on Worksheet 2, Step 2, line 2g, found in the instructions for Form 944.

Line 23: Enter the qualified health plan expenses allocable to qualified family leave wages paid in 2022 for leave taken after March 31, 2021, and before October 1, 2021. This amount is also entered on Worksheet 2, Step 2, line 2h, found in the instructions for Form 944.

Line 24: Enter the collectively bargained defined benefit pension plan contributions and collectively bargained apprenticeship program contributions allocable to qualified family leave wages paid in 2022 for leave taken after March 31, 2021, and before October 1, 2021. This amount is also entered on Worksheet 2, Step 2, line 2i, found in the instructions for Form 944.

Line 25: Reserved for future use by the IRS. Leave this blank.

Line 26: Reserved for future use by the IRS. Leave this blank.

Part 4: Speaking with a third-party designee

If you want to allow an employee, a paid tax preparer, or another person to discuss your Form 944 with the IRS, check the “Yes” box in Part 4. Enter the name, phone number, and five-digit personal identification number (PIN) of the specific person to speak with—not the name of the firm that prepared your tax return.

A third-party designee can also provide the IRS with any missing information, call regarding the processing of the return, and respond to IRS notices you have shared with them. They can not bind you to anything (including additional tax liability) or represent you before the IRS.

This authorization automatically expires after one year from the due date of this return. 

Part 5: Signature

You or someone with an approved role needs to sign and date the form, along with printing the name, and providing a daytime phone number.

Who can sign Form 944?

The following persons may sign the return for each type of business entity:

• Sole proprietorship: The individual who owns the business.
• Corporation (including a limited liability company (LLC) treated as a corporation): The president, vice president, or other principal officer duly authorized to sign.
• Partnership (including an LLC treated as a partnership) or unincorporated organization: A responsible and duly authorized partner, member, or officer having knowledge of its affairs.
• Single-member LLC treated as a disregarded entity for federal tax purposes: The  owner of the LLC or a principal officer duly authorized to sign.
• Trust or estate—The fiduciary.

Form 944 may also be signed by a duly authorized agent of the taxpayer if a valid power of attorney has been filed.

When is Form 944 due?

Form 944 for 2022 is due by January 31, 2023; Form 944 for 2023 is due on January 31, 2024. If the 31st falls on a holiday or weekend, it is due on the following normal business day. However, if you made your deposits on time and in full, you may file the return by February 10th.

If you file by mail, make sure your filing is properly addressed, contains sufficient postage and is postmarked by the US Postal Service by the due date in order to be considered timely filed. If not, the return will be considered filed when it is actually received. 

Penalties for late filing

Failing to file Form 944 by the deadline results in a 5% penalty on the tax owed for each month the return is late (this penalty caps at 25%). Paying late or not paying the full amount due, the IRS will charge you 2% to 15% of the unpaid tax determined by the number of days the amount remains unpaid.

Important tip: If you fail to withhold and pay taxes to the US Treasury that are required, a trust fund recovery penalty may apply. The penalty is 100% of the unpaid trust fund tax. If the unpaid tax can’t be collected from the business immediately, the penalty could be imposed on all persons the IRS determines is responsible for collecting and paying these amounts and willfully didn’t do so.  

Where do you file Form 944?

Form 944 can be filed electronically by visiting the IRS E-file webpage.

However, if you are required to file by mail, where you file depends on whether you are including a payment using a check or money order with the form. Then you would need to use Form 944-V, which is a payment voucher that can be found at the bottom of Form 944. (Note: This form shouldn’t be used for federal tax deposits, only for payments.)

You can mail the return to the address listed for your location below.

Mailing Addresses for Form 944