Table of Contents
Federal law requires you, as an employer, to withhold taxes from your employees' paychecks. Each time you pay wages, you must withhold — or take out of your employees' paychecks — certain amounts for federal income tax, social security tax, and Medicare tax. Under the withholding system, taxes withheld from your employees are credited to your employees in payment of their tax liabilities.
Federal law also requires employers to pay any liability for the employer's portion of social security and Medicare taxes. This portion of social security and Medicare taxes is not withheld from employees.
Form 944 is designed so the smallest employers (those whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less) will file and pay these taxes only once a year instead of every quarter. These instructions give you some background information about Form 944. They tell you who must file Form 944, how to complete it line by line, and when and where to file it.
For more information about annual employment tax filing and tax deposit rules, see Treasury Decision 9239. You can find T.D. 9239 on page 401 of Internal Revenue Bulletin 2006-6 at www.irs.gov/pub/irs-irbs/irb06-06.pdf.
If you want more in-depth information about payroll tax topics, see Pub. 15 (Circular E), or visit the IRS website at www.irs.gov/businesses and click on the Employment Taxes link.
In general, if the IRS has notified you to file Form 944, then you must file Form 944 instead of Form 941 to report all the following amounts.
-
Wages you have paid.
-
Tips your employees have received.
-
Federal income tax you withheld.
-
Both the employer's and the employee's share of social
security and Medicare taxes. -
Current year's adjustments to social security and
Medicare taxes for fractions of cents, sick pay, tips,
and group-term life insurance. -
Prior years' adjustments to payroll taxes (attach
Form 941c). If you discover an error after 2008, you must
use Form 944-X to make corrections to a previously
filed Form 944. -
Advance earned income tax credit (EIC) payments.
You must file Form 944 for each year even if you have no taxes to report (or you have taxes in excess of $1,000 to report) unless the IRS notifies you that your filing requirement has been changed to Form 941 (or you filed a final return — See If your business has closed... on page 3). Also see What if you do not want to file Form 944 for 2009? below.
In February 2008, the IRS mailed newly eligible employers a notice to file Form 944 if their annual liability for social security, Medicare, and withheld federal income taxes was expected to be $1,000 or less. If you did not respond to that notice by April 1, 2008, indicating your interest to not participate in the Form 944 program, then you must file Form 944 for 2008.
If the IRS notified you in writing that your filing requirement was changed after you contacted the IRS to participate in the Form 944 program, you must file Form 944.
New employers are also eligible to file Form 944 if they will meet the eligibility requirements. New employers filing Form SS-4, Application for Employer Identification Number, must complete line 13 of Form SS-4 indicating the highest number of employees expected in the next 12 months and must check the “Yes” box or the “No” box on line 14 to indicate whether they expect to have $1,000 or less in employment tax liability for the calendar year. Generally, if you pay $4,000 or less in wages subject to social security and Medicare taxes and federal income tax withholding, you are likely to pay $1,000 or less in employment taxes. New employers are advised of their employment tax filing requirement when they are issued their EIN.
If the IRS notified you to file Form 944 for 2008, file Form 944 (and not Forms 941) even if your tax liability for 2008 exceeds $1,000.
You must file Form 944 if you have been notified to do so, unless you meet one of the exceptions. If the IRS has notified you to file Form 944 and an exception listed below applies to you, you must call the IRS by telephone at 1-800-829-4933 about what form to file. To determine if you can file Form 941 quarterly to report your social security, Medicare, and withheld federal income taxes for the 2009 calendar year, you must call the IRS by April 1, 2009, unless you are a new employer. See New employers above. You may be eligible to file Form 941 quarterly, instead of Form 944 annually, if either of the following applies.
-
You agree to file your quarterly Forms 941 electronically.
-
You expect your 2009 liability for social security,
Medicare, and withheld federal income taxes to be
more than $1,000.
If you contact the IRS and the IRS determines you can file Forms 941 instead of Form 944, the IRS will send you a written notice that your filing requirement has been changed.
If you meet one of the exceptions above, you may elect to not participate in the Form 944 program in future years. You can make this election when you contact IRS about your 2009 Form 944 filing. If the IRS determines you can file Form 941 instead of Form 944 for years after 2009, you will be sent a written notice that your filing requirement has changed.
The following employers cannot file Form 944.
-
Employers who are not notified. If the IRS does
not notify you to file Form 944, do not file Form 944.
You can call the IRS at 1-800-829-4933 by
April 1, 2009, to determine if you can file Form 944
for calendar year 2009. -
Household employers. If you employ only household
employees, do not file Form 944. For more information,
see Pub. 926, Household Employer's Tax
Guide, and Schedule H (Form 1040), Household
Employment Taxes. -
Agricultural employers. If you employ only agricultural
employees, do not file Form 944. For more information,
see Pub. 51 (Circular A), Agricultural Employer's Tax
Guide, and Form 943, Employer's Annual Federal Tax
Return for Agricultural Employees.
If you sell or transfer your business, you and the new owner must each file a Form 944 or Forms 941, whichever applies, for the year in which the transfer occurred. Report only the wages you paid.
When two businesses merge, the continuing firm must file a return for the year in which the change took place and the other firm should file a final return.
Changing from one form of business to another—such as from a sole proprietorship to a partnership or corporation—is considered a transfer. If a transfer occurs, you may need a new employer identification number (EIN). See section 1 of Pub. 15 (Circular E). Attach a statement to your return with all the following information.
-
The new owner's name (or the new name of the
business). -
Whether the business is now a sole proprietorship,
partnership, or corporation. -
The kind of change that occurred (a sale or transfer).
-
The date of the change.
-
The name of the person keeping the payroll records and
the address where those records will be kept.
If you go out of business or stop paying wages to your employees, you must file a final return. To tell the IRS that the form for a particular year is your final return, check the box in Part 3 on page 2 of Form 944 and enter the final date you paid wages. Also attach a statement to your return showing the name of the person keeping the payroll records and the address where those records will be kept.
If you participated in a statutory merger or consolidation, or qualify for predecessor-successor status due to an acquisition, you should generally file Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations. See the Instructions for Schedule D (Form 941) to determine whether you should file Schedule D (Form 941) and when you should file it.
File Form 944 by February 2, 2009, after the end of the 2008 calendar year. If you made deposits in full payment of your taxes for the year by January 31, 2009, you have 10 more calendar days after that date to file your Form 944.
File Form 944 only once for each calendar year. If you filed Form 944 electronically, do not file a paper Form 944. For more information about filing Form 944 electronically, see Electronic filing and payment on page 1.
If we receive Form 944 after the due date, we will treat Form 944 as filed on time if the envelope containing
Form 944 is properly addressed, contains sufficient postage, and is postmarked by the U.S. Postal Service on or before the
due date, or sent by an IRS-designated private delivery service on or before the due date. If you do not follow these guidelines,
we will consider Form 944 filed when it is actually received. See Pub. 15 (Circular E) for more information on IRS-designated
private delivery services.
If any due date for filing falls on a Saturday, Sunday, or legal holiday, you may file your return on the next business day.
If you are using a copy of Form 944 that has your business name and address preprinted at the top of the form, check to make sure the information is correct. Carefully review your EIN to make sure that it exactly matches the EIN assigned to your business by the IRS. If any information is incorrect, cross it out and enter the correct information. See also If you change your name or address... below.
If you use a tax preparer to fill out Form 944, make sure the preparer uses your business name and EIN exactly as they appear on the preprinted form.
If you are not using a preprinted Form 944, enter your EIN, name, and address in the spaces provided. Also enter your name and EIN at the top of page 2. Do not use your social security number (SSN) or individual taxpayer identification number (ITIN). Generally, enter the business (legal) name that you used when you applied for your EIN on Form SS-4. For example, if you are a sole proprietor, enter “Tyler Smith” on the “Name” line and “Tyler's Cycles” on the “Trade name” line. Leave the “Trade name” line blank if it is the same as your “Name.”
-
Name change. Write to the IRS office where you
filed your return without payment to notify the IRS of any
name change. Get Pub. 1635, Understanding Your EIN,
to see if you need to also apply for a new EIN. -
Address change. Complete and mail Form 8822,
Change of Address, for any address change.
Make entries on Form 944 as follows to enable accurate processing.
-
Use 12-point Courier font (if possible) for all entries if
you are using a typewriter or computer to complete
Form 944. -
Do not enter dollar signs and decimal points. Commas are
optional. Report dollars to the left of the preprinted
decimal point and cents to the right of it. -
Leave blank any data field with a value of zero (except
lines 1 and 9). -
Enter negative amounts using a minus sign (if possible).
Otherwise, use parentheses. -
Enter your name and EIN on all pages and attachments.
Filers using the IRS-preaddressed Form 944 do not
have to enter their name and EIN on page 2.
Give each eligible employee Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC). Each eligible employee who wishes to receive any advance earned income credit (EIC) payments must give you a completed Form W-5, Earned Income Credit Advance Payment Certificate. For more information, see section 10 of Pub. 15 (Circular E) and Pub. 596, Earned Income Credit.
The IRS matches amounts reported on your Form 944 with Form W-2 amounts totaled on your Form W-3, Transmittal of Wage and Tax Statements. If the amounts do not agree, the IRS may contact you. The following amounts are reconciled.
-
Federal income tax withholding.
-
Social security wages.
-
Social security tips.
-
Medicare wages and tips.
-
Advance earned income credit (EIC) payments.
For more information, see section 12 of Pub. 15
(Circular E) and the Instructions for Schedule D (Form 941).
If your liability for social security, Medicare, and withheld federal income taxes is less than $2,500 for the year, you can pay the taxes with your return. To avoid a penalty, you should pay in full and file on time. You do not have to deposit the taxes. However, you may choose to make deposits of these taxes even if your liability is less than $2,500. If your liability for these taxes is $2,500 or more, you are generally required to deposit the taxes instead of paying them when you file Form 944. See the Federal Tax Deposit Requirements for Form 944 Filers chart below. If you do not deposit the taxes when required, you may be subject to penalties and interest.
The $2,500 threshold at which federal tax deposits must be made is different from the amount of annual tax liability ($1,000 or less) that makes an employer eligible to participate in the Employers' Annual Federal Tax Program and file Form 944. Designated Form 944 filers whose businesses grow during the year may be required to make federal tax deposits (see chart below), but they will still file Form 944 for the year.
| 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 are 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 banking day. See section 11 of Pub. 15. |
Note.
When you make deposits depends on your deposit schedule, which is either monthly or semiweekly, depending on the amount of your tax liability during the lookback period. The lookback period for Form 944 filers is different than the lookback period for Form 941 filers, so your deposit schedule may have changed. For more information, see section 11 of Pub. 15 (Circular E).
You can avoid paying penalties and interest if you do all the following.
-
Deposit or pay your taxes when they are due, using
EFTPS if required. -
File your fully completed Form 944 on time.
-
Report your tax liability accurately in Part 2 of Form 944.
-
Submit valid checks for tax payments.
-
Give accurate Forms W-2 to employees.
-
File Form W-3 and Copies A of Form W-2 with the Social
Security Administration (SSA) on time and accurately.
Penalties and interest are charged on taxes paid late and returns filed late at a rate set by law. See sections 11 and 12 of Pub. 15 (Circular E) for details. Use Form 843, Claim for Refund and Request for Abatement, to request abatement of assessed penalties or interest. Do not request abatement of assessed penalties or interest on Form 944, Form 944-X, or Form 941c.
A trust fund recovery penalty may apply if federal income, social security, and Medicare taxes that must be withheld are not withheld or paid. The penalty is the full amount of the unpaid trust fund tax. This penalty may apply when these unpaid taxes cannot be collected from the employer. The trust fund recovery penalty may be imposed on all people the IRS determines to be responsible for collecting, accounting for, and paying these taxes, and who acted willfully in not doing so. For details, see section 11 of Pub. 15 (Circular E).
Where you file depends on whether you include a payment with your form.
| If you are in . . . | Without a payment . . . |
With a payment . . . | |
|---|---|---|---|
| Special filing address for exempt organizations; federal, state and local governmental entities; and Indian tribal governmental entities; regardless of location | Department of the Treasury Internal Revenue Service Ogden, UT 84201-0044 |
Internal Revenue Service P.O. Box 105118 Atlanta, GA 30348-5118 |
|
| Connecticut Delaware District of Columbia Georgia Illinois Indiana Kentucky Maine Maryland Massachusetts Michigan New Hampshire |
New Jersey New York North Carolina Ohio Pennsylvania Rhode Island South Carolina Tennessee Vermont Virginia West Virginia Wisconsin |
Department of the Treasury Internal Revenue Service Cincinnati, OH 45999-0044 |
Internal Revenue Service P.O. Box 804522 Cincinnati, OH 45280-4522 |
| Alabama Alaska Arizona Arkansas California Colorado Florida Hawaii Idaho Iowa Kansas Louisiana Minnesota Mississippi |
Missouri Montana Nebraska Nevada New Mexico North Dakota Oklahoma Oregon South Dakota Texas Utah Washington Wyoming |
Department of the Treasury Internal Revenue Service Ogden, UT 84201-0044 |
Internal Revenue Service P.O. Box 105118 Atlanta, GA 30348-5118 |
| No legal residence or principal place of business in any state | Internal Revenue Service P.O. Box 409101 Ogden, UT 84409 |
Internal Revenue Service P.O. Box 105273 Atlanta, GA 30348-5273 |
|
Your filing or payment address may have changed from that used to file your employment tax return in prior years. If you are using an IRS-provided envelope, use only the labels and envelope provided with the tax package. Do not send Form 944 or any payments to the Social Security Administration (SSA). Private delivery services cannot deliver to P.O. boxes.
| More Online Instructions |