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Forms 940, 941 and 944 Employment Taxes

Question: We are about to hire employees and need to know how much federal income tax to withhold and where to send this money along with other employment taxes?

Answer:

You will need to:

  • Secure a completed Form W-4 (PDF), Employee's Withholding Allowance Certificate, from each employee to know how much federal income tax to withhold from the employee's wages.
  • Use Publication 15, (Circular E), Employer's Tax Guide, and Publication 15-A (PDF), Employer's Supplemental Tax Guide, to determine the amount of withholding and for directions on depositing the withheld amounts and other employment taxes. Also, refer to Form 941 (PDF), Employer’s QUARTERLY Federal Tax Return, and the Instructions for Form 941, or Form 944 (PDF), Employer's ANNUAL Federal Tax Return, and the Instructions for Form 944.

Generally, employers are required to quarterly file Form 941, Employer's QUARTERLY Federal Tax Return, and annually file Form 940 (PDF), Employer's Annual Federal Unemployment (FUTA) Tax Return.   For more information about Form 940, see Topic 759.  Employers also must annually file a Form W-2 (PDF), Wage and Tax Statement, for each employee, along with a Form W-3 (PDF), Transmittal of Wage and Tax Statements, and furnish copy of the Form W-2 to the employee.  

Some small employers (those whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less) may annually file Form 944 (PDF), Employer's ANNUAL Federal Tax Return, instead of Forms 941.  Employers who may be eligible to file Form 944 and who want to file this form must contact the IRS to request to file Form 944.  Employers are not permitted to file Form 944 unless they receive written notice from the IRS to do so. Once the IRS notifies employers to file Form 944, they must continue to file Form 944 until the IRS notifies them in writing that their filing requirement has been changed to Form 941.  Employers who are required to file Form 944 but prefer to file Forms 941 may contact the IRS to request to file Forms 941 instead, and will receive written notification that their filing requirement has changed. (See the Instructions for Form 944).  New employers are also eligible to file Form 944, if they will meet the eligibility requirements.  If new employers qualify to file Form 944, they must check the box on line 14 of Form SS-4 (PDF), Application for Employer Identification Number, to indicate that they want to file Form 944 instead of Forms 941.  If new employers do not check this box, they must file Forms 941.

Monthly or semiweekly deposits may be required for taxes reported on Form 941 (or Form 944), and quarterly deposits may be required for taxes reported on Form 940.  The employer should consult each form’s instructions or Publication 15 to determine when deposits must be made.

The Employment Tax e-file System page on IRS.gov offers an improved way to file Forms 940, 941, and 944 electronically.  Prospective participants must first complete and submit an IRS e-file application.  You can complete the IRS e-file application online after registering for e-services. 

Additional Information:


Category: Small Business, Self Employed, Other Business
Subcategory: Forms 940, 941 and 944 Employment Taxes

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The OMB number for this study is 1545-1432.
If you have any comments regarding this study, please write to:
IRS, Tax Products Coordinating Committee
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