Specific Instructions:

Table of Contents

Part 1: Select ONLY One Process

Because Form 944-X may be used to file either an adjusted employment tax return or a claim for refund or abatement, you must check one box on either line 1 or line 2. Do not check both boxes.

1. Adjusted Employment Tax Return

Check the box on line 1 if you are correcting underreported amounts or overreported amounts and you would like to use the adjustment process to correct the errors.

If you are correcting both underreported amounts and overreported amounts on this form, you must check this box. If you check this box, any negative amount shown on line 21 will be applied as a credit (tax deposit) to your Form 944 or Form 941 for the period in which you are filing this form. See Example—You want your overreported tax applied as a credit on Form 944 above.

Form 944-X cannot be used to correct overreported amounts of Additional Medicare Tax unless the amounts were not withheld from employee wages.

If you owe tax.   Pay the amount shown on line 21 by the time you file Form 944-X. Generally, you will not be charged interest if you file on time, pay on time, enter the date you discovered the error, and explain the correction on line 24.

If you have a credit.   You overreported employment taxes (you have a negative amount on line 21) and want the IRS to apply the credit on Form 944 (or Form 941) for the period during which you filed Form 944-X. The IRS will apply your credit to the first day of the Form 944 year (or Form 941 quarter) during which you filed Form 944-X. However, the credit you show on Form 944-X, line 21, may not be fully available on your Form 944 (or Form 941) if the IRS corrects it during processing or you owe other taxes, penalties, or interest. The IRS will notify you if your claimed credit changes or if the amount available as a credit on Form 944 or Form 941 was reduced because of unpaid taxes, penalties, or interest.

  
Do not check the box on line 1 if you are correcting overreported amounts and the period of limitations on credit or refund for Form 944 will expire within 90 days of the date you file Form 944-X. Instead, check the box on line 2. See Is There a Deadline for Filing Form 944-X, earlier.

2. Claim

Check the box on line 2 to use the claim process if you are correcting overreported amounts only and you are claiming a refund or abatement for the negative amount (credit) shown on line 21. Do not check this box if you are correcting any underreported amounts on this form.

You must check the box on line 2 if you have a credit and the period of limitations on credit or refund for Form 944 will expire within 90 days of the date you file Form 944-X. See Is There a Deadline for Filing Form 944-X, earlier.

The IRS usually processes claims shortly after they are filed. The IRS will notify you if your claim is denied, accepted as filed, or selected to be examined. See Pub. 556, Examination of Returns, Appeal Rights, and Claims for Refund, for more information.

Unless the IRS corrects Form 944-X during processing or you owe other taxes, penalties, or interest, the IRS will refund the amount shown on line 21, plus any interest that applies.

You may not file a refund claim to correct federal income tax or Additional Medicare Tax actually withheld from employees.

Part 2: Complete the Certifications

You must complete all certifications that apply by checking the appropriate boxes. If all of your corrections relate to underreported amounts, complete line 3 only; skip lines 4 and 5 and go to Part 3. If your corrections relate to overreported amounts, you have a duty to ensure that your employees' rights to recover overpaid employee social security and Medicare taxes that you withheld are protected. The certifications on lines 4 and 5 address the requirement to:

  • Repay or reimburse your employees for the overcollection of employee social security and Medicare taxes, or

  • Obtain consents from your employees to file a claim on their behalf.

3. Filing Forms W-2 or Forms W-2c

Check the box on line 3 to certify that you filed or will file Forms W-2 or Forms W-2c, as required, showing your employees' correct wage and tax amounts. See the General Instructions for Forms W-2 and W-3 for detailed information about filing requirements. References to Form W-2 on Form 944-X and in these instructions also apply to Forms W-2AS, W-2CM, W-2GU, and W-2VI unless otherwise noted.

You must check the box on line 3 to certify that you filed Forms W-2 or Forms W-2c even if your corrections on Form 944-X do not change amounts shown on those forms. For example, if your only correction to Form 944 involves misstated tax adjustments (see the instructions for line 13), check the box on line 3 to certify that you already filed all required Forms W-2 and W-2c with the Social Security Administration (SSA).

4. Certifying Overreporting Adjustments

If you overreported federal income tax, social security tax, Medicare tax, or Additional Medicare Tax and checked the box on line 1, check the appropriate box on line 4. You may need to check more than one box. If you obtained written statements from some employees but you could not locate or secure the cooperation of the remaining employees, check all applicable boxes. Provide a summary on line 24 of the amount of the corrections for the employees who provided written statements and for those who did not. You may not use Form 944-X to correct overreported amounts of Additional Medicare Tax unless the amounts were not withheld from employee wages.

4a.   Check the box on line 4a if your overreported amount includes each affected employee's share of overcollected taxes. You are certifying that you repaid or reimbursed the employees' share of prior year taxes and you received written statements from the employees stating that they did not and will not receive a refund or credit for the prior year taxes.

Example.

The following is an example of the written statement that is required from employees.

Employee name

Employer name

I have received a repayment of $_________ as overcollected social security and Medicare taxes for 20___. I have not claimed a refund of or credit for the overcollected taxes from the IRS, or if I did, that claim has been rejected; and I will not claim a refund or a credit of the amount.

Employee signature

Date

Do not send these statements to the IRS. Keep them for your records. Generally, all employment tax records must be kept for at least 4 years.

4b.   Check the box on line 4b to certify that your overreported amount is only for the employer share of taxes on those employees who you were unable to find or those who would not or could not give you a statement described on line 4a.

4c.   Check the box on line 4c to certify that your overreported amount is only for federal income tax, social security tax, Medicare tax, or Additional Medicare Tax that you did not withhold from your employees.

5. Certifying Claims

If you are filing a claim for refund or abatement of overreported federal income tax, social security tax, Medicare tax, or Additional Medicare Tax and checked the box on line 2, check the appropriate box on line 5. You may need to check more than one box. If you obtained written statements or consents from some employees but you could not locate or secure the cooperation of the remaining employees, check all applicable boxes. Provide a summary on line 24 of the amount of the corrections for the employees who provided statements or consents and for those who did not. You may not file a refund claim to correct federal income tax or Additional Medicare Tax actually withheld from employees.

5a.   Check the box on line 5a if your overreported tax includes each affected employee's share of prior year social security and Medicare tax. You are certifying that you repaid or reimbursed to the employees their share of prior year social security and Medicare tax and you received written statements from those employees stating that they did not and will not receive a refund or credit for the prior year taxes.

5b.   Check the box on line 5b if your overreported tax includes each affected employee's share of prior year social security and Medicare tax and you have not yet repaid or reimbursed the employee share of taxes. You are certifying that you received consent from each affected employee to file a claim on the employee share of those taxes and you received written statements from those employees stating that they did not and will not receive a refund or credit for the prior year taxes.

Example.

The following is an example of the consent and written statement that is required from employees when you are filing a claim for refund and have not yet repaid or reimbursed the employee share of taxes.

Employee name

Employer name

I give my consent to have my employer (named above) file a claim on my behalf with the IRS requesting $_________ in overcollected social security and Medicare taxes for 20___. I have not claimed a refund of or credit for the overcollected taxes from the IRS, or if I did, that claim has been rejected; and I will not claim a refund or a credit of the amount.

Employee signature

Date

Do not send these statements to the IRS. Keep them for your records. Generally, all employment tax records must be kept for at least 4 years.

In certain situations, you may not have repaid or reimbursed your employees or obtained their consents before filing a claim, such as in cases where the period of limitations on credit or refund is about to expire. In those situations, file Form 944-X, but do not check a box on line 5. Tell us on line 24 that you have not repaid or reimbursed employees or obtained consents. However, you must certify that you have repaid or reimbursed your employees or obtained consents before the IRS can grant the claim.

5c.   Check the box on line 5c to certify that your overreported tax is only for the employer share of social security and Medicare tax. Affected employees did not give you consent to file a claim for refund for the employee share of social security and Medicare tax, they could not be found, or would not (or could not) give you a statement described on line 5b.

5d.   Check the box on line 5d to certify that your overreported amount is only for federal income tax, social security tax, Medicare tax, or Additional Medicare Tax that you did not withhold from your employees.

Part 3: Enter the Corrections for the Calendar Year You Are Correcting

What Amounts Should You Report in Part 3?

On lines 6–11, columns 1 and 2, show amounts for all of your employees, not just for those employees whose amounts you are correcting.

If a correction you report in column 4 includes both underreported and overreported amounts (see the instructions for line 22), give us details for each error on line 24.

Because special circumstances apply for lines 12a–17 and 19–20d, read the instructions for each line carefully before entering amounts in the columns.

If you previously adjusted or amended Form 944 using Form 944-X or because of an IRS examination change, show amounts in column 2 that include those previously reported corrections.

6. Wages, Tips, and Other Compensation

If you are correcting the wages, tips, and other compensation you reported on Form 944, line 1, enter the total corrected amount for ALL employees in column 1. In column 2, enter the amount you originally reported. In column 3, enter the difference between columns 1 and 2. This line does not apply to  
Form 944-SS.

If you or the IRS previously corrected the amount reported on Form 944, line 1, enter in column 2 the amount after any previous corrections.

line 6 (column 1)      
-line 6 (column 2)      
line 6 (column 3)   If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Example —Wages, tips, and other compensation increased.

You reported $900 as total wages, tips, and other compensation on line 1 of your 2013 Form 944. In July of 2014, you discover that you had overlooked $100 in tips for one of your part-time employees. To correct the error, figure the difference on Form 944-X as shown.

Column 1 (corrected amount) 1000.00  
Column 2 (from Form 944, line 1) -900.00  
Column 3 (difference) 100.00  

Example —Wages, tips, and other compensation decreased.

You reported $900 as wages, tips, and other compensation on line 1 of your 2013 Form 944. In December of 2014, you discover that you included $200 in wages for one of your employees twice. To correct the error, figure the difference on Form 944-X as shown.

Column 1 (corrected amount) 700.00  
Column 2 (from Form 944, line 1) -900.00  
Column 3 (difference) -200.00  

Example—Auto allowance; wages, tips, and other compensation increased.

You paid one of your employees a $50 monthly auto allowance from October–December 2012 and did not treat the payments as taxable wages. However, in February 2014, you realized that the payments were wages because they were not reimbursements of deductible business expenses that were substantiated and paid under an accountable plan. Therefore, you must correct the error and treat the auto allowance as wages subject to income, social security, and Medicare taxes. Use Form 944-X to report the additional $150 of wages on line 6 and any underreported amounts on lines 8 and 10.

The amount on line 6, column 1, should be used on your Forms W-2 or Forms W-2c. This amount should also be used for any business expense deduction on your income tax return (or amended return) for wages paid.

7. Federal Income Tax Withheld from Wages, Tips, and Other Compensation

If you are correcting the federal income tax withheld from wages, tips, and other compensation you reported on Form 944, line 2, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2. This line does not apply to Form 944-SS.

line 7 (column 1)      
-line 7 (column 2)      
line 7 (column 3)   If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Copy the amount in column 3 to column 4. Include any minus sign shown in column 3.

Generally, you may correct federal income tax withholding errors only if you discovered the errors in the same calendar year you paid the wages. However, you may correct federal income tax withholding errors for prior years if the amounts shown on Form 944 do not agree with the amounts you actually withheld, that is, an administrative error or section 3509 rates apply. See section 13 of Pub. 15 (Circular E) for more information about corrections during the calendar year and about administrative errors. See section 2 of Pub. 15 (Circular E) for more information about section 3509.

Example—Failure to withhold federal income tax when required.

You were required to withhold $400 of federal income tax from an employee's bonus that was paid in December of 2013 but you withheld nothing. You discovered the error on March 17, 2014. You cannot file Form 944-X to correct your 2013 Form 944 because the error involves a previous year and the amount previously reported for the employee represents the actual amount withheld from the employee during 2013.

Example—Administrative error reporting federal income tax.

You had three employees. In 2013, you withheld $100 of federal income tax from employee A, $200 from employee B, and $600 from employee C. The total amount of federal income tax you withheld was $900. You mistakenly reported $600 on line 2 of your 2013 Form 944. You discovered the error on March 17, 2014. This is an example of an administrative error that may be corrected in a later calendar year because the amount actually withheld from employees' wages differs from the amount reported on Form 944. Use Form 944-X to correct the error. Enter $900 in column 1 and $600 in column 2. Subtract the amount in column 2 from the amount in column 1.

Column 1 (corrected amount) 900.00  
Column 2 (from Form 944, line 2) - 600.00  
Column 3 (difference) 300.00  

Report the 300.00 as a tax correction in column 4.

Be sure to explain the reasons for this correction on line 24.

8. Taxable Social Security Wages

The 2011 and 2012 employee tax rate for social security was 4.2%.

If you are correcting the taxable social security wages you reported on Form 944, line 4a, column 1, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

line 8 (column 1)      
-line 8 (column 2)      
line 8 (column 3)   If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Multiply the amount in column 3 by .124 (.104 for corrections to a 2011 or 2012 return) and enter the result in column 4.

line 8 (column 3)      
  x .124   (Use .104 for corrections to a 2011 or 2012 return.)  
line 8 (column 4)   If the amount in column 3 used a minus sign,  
also use a minus sign in column 4.

Note.

If you are correcting only the employer share of tax on a decrease to social security wages, use .062 (6.2%) when multiplying the amount shown in column 3. If you are correcting both shares of tax for some employees and only the employer share for other employees, enter the properly calculated amount in column 4. Be sure to show your calculations on line 24.

Example—Social security wages decreased.

Following Example—Wages, tips, and other compensation decreased in the instructions for line 6, the wages that you counted twice were also taxable social security wages. To correct the error, figure the difference on Form 944-X as shown.

Column 1 (corrected amount) 700.00  
Column 2 (from Form 944, line 4a, Column 1) - 900.00  
Column 3 (difference) - 200.00  

Use the difference in column 3 to determine your tax correction.

Column 3 (difference)   -200.00  
Tax rate (12.4%)   x .124  
Column 4 (tax correction)   -24.80  

Be sure to explain the reasons for this correction on line 24.

Note.

If the example above was for a correction to a 2011 or 2012 return, the amount in column 3 would be multiplied by .104.

9. Taxable Social Security Tips

The 2011 and 2012 employee tax rate for social security was 4.2%.

If you are correcting the taxable social security tips you reported on Form 944, line 4b, column 1, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

line 9 (column 1)      
-line 9 (column 2)      
line 9 (column 3)   If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Multiply the amount in column 3 by .124 (.104 for corrections to a 2011 or 2012 return) and report the result in column 4.

line 9 (column 3)      
  x .124   (Use .104 for corrections to a 2011 or 2012 return.)  
line 9 (column 4)   If the amount in column 3 used a minus sign,  
also use a minus sign in column 4.

Note.

If you are correcting only the employer share of tax on a decrease to social security tips, use .062 (6.2%) when multiplying the amount shown in column 3. If you are correcting both shares of tax for some employees and only the employer share for other employees, report the properly calculated amount in column 4. Be sure to show your calculations on  
line 24.

Following the Example—Wages, tips, and other compensation increased in the instructions for line 6, the tips that you overlooked were also taxable social security tips. To correct the error, figure the difference on Form 944-X as shown.

Column 1 (corrected amount) 1000.00  
Column 2 (from Form 944, line 4b, Column 1) - 900.00  
Column 3 (difference) 100.00  

Use the difference in column 3 to determine your tax correction.

Column 3 (difference) 100.00  
Tax rate (12.4%) x .124  
Column 4 (tax correction) 12.40  

Be sure to explain the reasons for this correction on line 24.

Note.

If the example above was for a correction to a 2011 or 2012 return, the amount in column 3 would be multiplied by .104.

10. Taxable Medicare Wages and Tips

If you are correcting the taxable Medicare wages and tips you reported on Form 944, line 4c, column 1, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

line 10 (column 1)      
-line 10 (column 2)      
line 10 (column 3)   If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Multiply the amount in column 3 by .029 (2.9% tax rate) and enter the result in column 4.

line 10 (column 3)      
x .029      
line 10 (column 4)   If the amount in column 3 used a minus sign,  
also use a minus sign in column 4.

Note.

If you are correcting only the employer share of tax on a decrease to Medicare wages and tips, use .0145 (1.45%) when multiplying the amount in column 3. If you are correcting both shares of tax for some employees and only the employee share for other employees, enter the properly calculated amount in column 4. Be sure to explain your calculations on line 24.

Example—Medicare wages and tips decreased.

Following Example—Wages, tips, and other compensation decreased in the instructions for line 6, the wages that you counted twice were also taxable Medicare wages and tips. To correct the error, figure the difference on Form 944-X as shown.

Column 1 (corrected amount) 700.00  
Column 2 (from Form 944, line 4c, Column 1) -900.00  
Column 3 (difference) -200.00  

Use the difference in column 3 to determine your tax correction.

Column 3 (difference)   -200.00  
Tax rate (2.9%)   x .029  
Column 4 (tax correction)   -5.80  

Be sure to explain the reasons for this correction on line 24.

11. Taxable Wages and Tips Subject to Additional Medicare Tax Withholding

If you are correcting the taxable wages and tips subject to Additional Medicare Tax withholding that you reported on Form 944, line 4d, column 1, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

line 11 (column 1)      
-line 11 (column 2)      
line 11 (column 3)   If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Multiply the amount in column 3 by .009 (0.9% tax rate) and enter that result in column 4.

line 11 (column 3)      
x .009      
line 11 (column 4)   If the amount in column 3 used a minus sign,  
also use a minus sign in column 4.

Generally, you may correct errors to wages and tips subject to Additional Medicare Tax withholding only if you discovered the errors in the same calendar year the wages and tips were paid to the employee. However, you may correct errors to wages and tips subject to Additional Medicare Tax withholding for prior years if the amounts shown on Form 944 do not agree with the amounts you actually withheld, that is, an administrative error or if section 3509 rates apply. See section 13 of Pub. 15 (Circular E) for more information about corrections during the calendar year and about administrative errors. See section 2 of Pub. 15 (Circular E) for more information about section 3509.

Example—Failure to withhold Additional Medicare Tax when required.

Employee A's wages exceeded the $200,000 withholding threshold for Additional Medicare Tax in November 2013. The total wages paid to Employee A for 2013 were $225,000. You were required to withhold $225 ($25,000 x .009) but you withheld nothing and did not report an amount on line 4d of your 2013 Form 944. You discovered the error on March 14, 2014. You cannot file Form 944-X to correct your 2013 Form 944 because the error involves a previous year and the amount previously reported for the employee represents the actual amount withheld from the employee during 2013.

Example—Administrative error reporting Additional Medicare Tax withheld.

Employee B's wages exceeded the $200,000 withholding threshold for Additional Medicare Tax in November 2013. The total wages paid to Employee B for 2013 were $225,000. You withheld $225 ($25,000 x .009) from the employee's wages. However, on your 2013 Form 944 you mistakenly reported $2,500 on line 4d, column 1, and Additional Medicare Tax withheld of $22.50 on line 4d, column 2. You discovered the error on March 14, 2014. This is an example of an administrative error that may be corrected in a later calendar year because the amount actually withheld differs from the amount reported on Form 944. Use Form 944-X, line 11, to correct the error as shown below.

Column 1 (corrected amount) 25,000.00  
Column 2 (from Form 944, line 4d, column 1) -2,500.00  
Column 3 (difference) 22,500.00  

Use the difference in column 3 to determine your tax correction.

Column 3 (difference)   22,500.00  
Tax rate (0.9%)   x .009  
Column 4 (tax correction)   202.50  

Be sure to explain the reasons for this correction on line 24.

12. Employer's Social Security Tax Exemption

Lines 12a and 12b apply only for corrections to the 2010 Form 944 or 944-SS.

Complete lines 12a and 12b to correct the payroll tax exemption for the employer's share (6.2%) of social security tax on exempt wages/tips paid to one or more qualified employees from April 1–December 31, 2010.

An employer must be a qualified employer to qualify for the employer's social security tax exemption. A qualified employer is any employer other than Federal, State, and any related government entities. All public institutions of higher education and Indian tribal governments are also qualified employers.

For more information regarding the employer's social security tax exemption, visit IRS.gov and enter “HIRE Act” in the search box.

12a. Number of Qualified Employees Paid Exempt Wages/Tips April 1–December 31, 2010

Enter on line 12a (column 1) the corrected number of qualified employees paid wages/tips to which you applied the social security tax exemption. Enter on line 12a (column 2) the number of qualified employees originally reported on line 5a of the previously filed 2010 Form 944. If you are not correcting line 5a of the previously filed 2010 Form 944 and are making a correction on line 12b, enter the number from line 5a of the previously filed 2010 Form 944 on line 12a.

A qualified employee is an employee who:

  • Began employment with you after February 3, 2010, and before January 1, 2011;

  • Certified by signed affidavit (Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit, or similar statement) under penalties of perjury, that he or she has not been employed for more than 40 hours during the 60-day period (including 2009) ending on the date the employee began employment with you;

  • Was not employed by you to replace another employee unless the other employee separated from employment voluntarily or for cause (including downsizing); and

  • Was not related to you. An employee is related to you if he or she is your child or a descendant of your child, your sibling or stepsibling, your parent or ancestor of your parent, your stepparent, your niece or nephew, your aunt or uncle, or your in-law. An employee is also related to you if he or she is related to anyone who owns more than 50% of your outstanding stock or capital and profits interest or is your dependent or a dependent of anyone who owns more than 50% of your outstanding stock or capital and profits interest. If you are an estate or trust, see section 51(i)(1) and section 152(d)(2) for more details.

Exempt wages/tips are the wages/tips paid to qualified employees for which the employer is exempt from paying the employer's 6.2% share of social security tax.

If you make a correction on line 12a, then you must complete line 12b.

12b. Exempt Wages/Tips Paid to Qualified Employees April 1–December 31, 2010

Enter the amount of exempt wages/tips paid that you are correcting for all qualified employees. Enter the corrected amount from line 5b of the previously filed 2010 Form 944. Enter the corrected amount in column 1. In column 2, enter the amount originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2. If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3. Multiply the amount in column 3 by .062 and enter the result in column 4. However, to properly show the correction as a credit or balance due item, enter a positive number in column 3 as a negative number in column 4 or a negative number in column 3 as a positive number in column 4. See the instructions for line 12a for definitions of qualified employee and exempt wages/tips.

If you make a correction on line 12b, then you must complete line 12a.

13. Tax Adjustments

Use line 13 to correct any adjustments reported on Form 944, line 6. Enter in column 1 the total corrected amount for Form 944, line 6.

Enter in column 2 the total originally reported or previously corrected amount from Form 944, line 6. In column 3, enter the difference between columns 1 and 2.

line 13 (column 1)    
-line 13 (column 2)    
line 13 (column 3)    

You may need to report negative numbers in any column. Make sure that the difference you enter in column 3 accurately represents the change to adjustments originally reported or previously corrected on Form 944, line 6.

Copy the amount in column 3 to column 4. Include any minus sign shown in column 3.

On line 24, describe what you misreported on Form 944. Tell us if your adjustment is for fractions of cents, third-party sick pay, tips, or group-term life insurance.

Example—Current year's third-party sick pay underreported.

You reported $690 (shown as “-690.00”) as a third-party sick pay adjustment (reduction to tax) on your 2012 Form 944, line 6. Your third-party sick pay adjustment should have been $960 (shown as “-960.00”) because your third-party sick pay payer withheld that amount of social security and Medicare taxes from your employees. You discovered the error in April of 2013. To correct the error, figure the difference on Form 944-X as shown.

Column 1 (corrected amount) -960.00  
Column 2 (from Form 944, line 6) - (690.00)  
Column 3 (difference) -270.00  

Here is how you would enter the numbers on Form 944-X.

Column 1 Column 2 Column 3
(corrected amount) (from Form 944, line 6) (difference)
-960.00 -690.00 -270.00

Report “-270.00” as your correction in column 4.

In this example, you are claiming a credit for $270 in overreported tax for your 2012 Form 944. Always enter the same amount in column 4 (including any minus sign) that you enter in column 3.

Be sure to explain the reasons for this correction on line 24.

14–17. Special Additions to Wages for Federal Income Tax, Social Security Tax, Medicare Tax, and Additional Medicare Tax

Section 3509 provides special rates for the employee share of social security tax, Medicare tax, Additional Medicare Tax, and income tax withholding when workers are reclassified as employees in certain circumstances. The applicable rate depends on whether you filed required information returns. An employer cannot recover any tax paid under this provision from the employees. The full employer share of social security tax and Medicare tax is due for all reclassifications.

Note.

Section 3509 rates are not available if you intentionally disregarded the requirements to withhold taxes from the employee, or if you withheld income tax but did not withhold social security and Medicare tax. Section 3509 rates are also not available for certain statutory employees.

On lines 14–17 enter only corrections to wages resulting from reclassifying certain workers as employees when section 3509 rates are used to calculate the taxes.

If the employer issued the required information returns, use the section 3509 rates as follows.

  • For social security taxes, use the employer rate of 6.2% plus 20% of the employee rate of 6.2% (4.2% for 2011 and 2012), for a total rate of 7.44% (7.04% for 2011 and 2012) of wages.

  • For Medicare taxes, use the employer rate of 1.45% plus 20% of the employee rate of 1.45%, for a total rate of 1.74% of wages.

  • For Additional Medicare Tax, 0.18% (20% of the employee rate of 0.9%) of wages subject to Additional Medicare Tax.

  • For income tax withholding, the rate is 1.5% of wages.

If the employer did not issue the required information returns, use the section 3509 rates as follows.

  • For social security taxes, use the employer rate of 6.2% plus 40% of the employee rate of 6.2% (4.2% for 2011 and 2012), for a total rate of 8.68% (7.88% for 2011 and 2012) of wages.

  • For Medicare taxes, use the employer rate of 1.45% plus 40% of the employee rate of 1.45%, for a total rate of 2.03% of wages.

  • For Additional Medicare Tax, 0.36% (40% of the employee rate of 0.9%) of wages subject to Additional Medicare Tax.

  • For income tax withholding, the rate is 3.0% of wages.

Unlike other lines on Form 944-X, enter in column 1 only the corrected wages for workers being reclassified, not the amount paid to ALL employees. Enter in column 2 previously reported wages (if any) to reclassified employees. To get the amount for column 4, use the applicable section 3509 rates. If you filed the required information returns for some employees but did not file them for other employees, be sure to use the applicable rates for each employee when calculating the amounts in column 4 and show your calculations on line 24. The tax correction in column 4 will be a positive number if you increased the amount of wages you previously reported. See the instructions for line 23 for more information.

18. Subtotal

Combine the amounts on lines 7–17 of column 4 and enter the total on line 18.

Example:

You entered “1,400.00” in column 4 of line 7, “-500.00” in column 4 of line 8, and “-100.00” in column 4 of line 10. Combine these amounts and enter “800.00” in column 4 of line 18.

Line 7 (column 4) 1400.00  
Line 8 (column 4) -500.00  
Line 10 (column 4) -100.00  
Line 18 (column 4) 800.00  

19. Advance Earned Income Credit (EIC) Payments Made to Employees

The option of receiving advance payroll payments of EIC expired on December 31, 2010. Corrections to advance EIC can be made only for years ending before January 1, 2011.

If you are correcting the advance EIC payments made to your employees that you reported on Form 944, line 8 (only for years ending before January 1, 2011), enter the total corrected amount for ALL employees in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2. This line does not apply to Form 944-SS.

line 19 (column 1)      
-line 19 (column 2)      
line 19 (column 3)   If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Copy the amount in column 3 to column 4. However, to properly show the correction as a credit or balance due item, enter a positive number in column 3 as a negative number in column 4 or a negative number in column 3 as a positive number in column 4. Remember, negative amounts in column 4 represent credits and positive amounts in column 4 represent additional tax.

Examples.

If line 19, column 3 shows “560.00,” enter “-560.00” in column 4.

If line 19, column 3 shows “-990.00,” enter “990.00” in column 4.

Example—Advance EIC payments increased.

On line 8 of your 2010 Form 944 you entered zero (or left the line blank). On February 17, 2011, you discovered that you forgot to report the $100 in advance EIC payments you made on behalf of John Smith, one of your employees. You made no other advance EIC payments for your other employees. This is an example of an administrative error. To correct the error, file Form 944-X showing the following.

Column 1 (corrected amount) 100.00  
Column 2 (from Form 944, line 8) - 0.00  
Column 3 (difference) 100.00  

Reverse the mathematical sign of the amount in column 3 and enter your correction in column 4.

Column 4 (tax correction) -100.00  

Be sure to explain the reasons for this correction on line 24.

See section 13 of Pub. 15 (Circular E) for more information about administrative errors and corrections during the calendar year. The same rules that apply to withheld federal income taxes also apply to advance EIC payments made to employees.

20a. COBRA Premium Assistance Payments

If you are correcting the total COBRA premium assistance payments reported on Form 944, line 9a (line 11a for years ending before January 1, 2011), report on this line the corrected amount of the 65% of the COBRA premiums for assistance eligible individuals. Report the premium assistance credit on this line only after the assistance eligible individual’s 35% share of the premium has been paid. For COBRA coverage provided under a self-insured plan, COBRA premium assistance payments are treated as having been made for each assistance eligible individual who pays 35% of the COBRA premium.

Do not include the assistance eligible individual’s 35% share of the premium in the amount entered on this line. For more information on the COBRA premium subsidy, visit IRS.gov and enter “COBRA” in the search box.

Copy the amount in column 3 to column 4. However, to properly show the correction as a credit or balance due item, enter a positive number in column 3 as a negative number in column 4 or a negative number in column 3 as a positive number in column 4. This is the same procedure as the advance EIC on line 19.

20b. Number of Individuals Provided COBRA Premium Assistance on Line 20a

Enter on line 20b, column 1, the corrected number of assistance eligible individuals provided COBRA premium assistance. Count each assistance eligible individual who paid a reduced COBRA premium in the year as one individual, whether or not the reduced premium was for insurance that covered more than one assistance eligible individual. For example, if the reduced COBRA premium was for coverage for a former employee, spouse, and two children, you would include one individual in the number entered on line 20b for the premium assistance reported on line 20a. Further, each individual is reported only once per year. For example, an assistance eligible individual who made monthly payments during the year would only be reported as one individual on line 20b.

Enter on line 20b, column 2, the number of assistance eligible individuals provided COBRA premium assistance originally reported on Form 944, line 9b (line 11b for years ending before January 1, 2011).

Lines 20c and 20d apply only for corrections to the 2010 Form 944 or 944-SS.

20c. Number of Qualified Employees Paid Exempt Wages/Tips March 19–31, 2010

Enter on line 20c, column 1, the corrected number of qualified employees paid wages/tips March 19–31, 2010, to which you applied the social security tax exemption. Enter on line 20c, column 2, the number of qualified employees originally reported on line 11c of the previously filed 2010 Form 944. If you are not correcting line 11c of the previously filed 2010 Form 944 and are making a correction on line 20d, enter the amount from line 11c of the previously filed 2010 Form 944 on line 20c. For the definition of qualified employee, see the instructions for line 12a, earlier.

20d. Exempt Wages/Tips Paid to Qualified Employees March 19–31, 2010

Enter the exempt wages/tips paid March 19–31, 2010, to all qualified employees reported on line 20c. For the definition of exempt wages/tips, see the instructions for line 12a, earlier. Enter the corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2. If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3. Multiply the amount in column 3 by .062 and enter the result in column 4. However, to properly show the correction as a credit or balance due item, enter a positive number in column 3 as a negative number in column 4 or a negative number in column 3 as a positive number in column 4.

21. Total

Combine lines 18–20d of column 4 and enter the result on line 21.

Your credit.   If the amount entered on line 21 is less than zero, for example, “-115.00,” you have a credit because you overreported your federal employment taxes.
  • If you checked the box on line 1, include this amount on the “Total deposits” line of Form 944 for the year during which you filed Form 944-X. If you currently file Form 941 or Form 941-SS because your filing requirement changed, include the credit on line 11. Do not make any changes to your record of federal tax liability reported on Form 944, line 13, or Form 945-A. The amounts reported on the record should reflect your actual tax liability for the period.

  • If you checked the box on line 2, you are filing a claim for refund or abatement of the amount shown.

  If your credit is less than $1, we will send a refund or apply it to your next return only if you ask us in writing to do so.

Amount you owe.   If the amount entered on line 21 is a positive number, you must pay the amount you owe by the time you file Form 944-X. You may not use any credit that you show on another Form 944-X to pay the amount you owe, even if you filed for the amount you owe and the credit at the same time.

  If you owe tax and are filing a timely Form 944-X, do not file an amended Form 945-A unless you were assessed an FTD penalty caused by an incorrect, incomplete, or missing Form 945-A. Do not include the tax increase reported on Form 944-X on any amended Form 945-A you file.

  If you owe tax and are filing late Form 944-X, that is, after the due date of Form 944 for the year in which you discovered the error, you must file an amended Form 945-A with the Form 944-X. Otherwise, the IRS may assess an “averaged” FTD penalty. The total tax reported on Form 945-A, line M, must match the corrected tax (Form 944, line 7 (line 9 for years before 2011), combined with any correction reported on Form 944-X, line 18, minus any advance EIC reported on Form 944-X, line 19, for the year), less any previous abatements and interest-free tax assessments.

Payment methods.

You may pay the amount you owe on line 21 electronically using the Electronic Federal Tax Payment System (EFTPS), by credit or debit card, or by a check or money order.

  • The preferred method of payment is EFTPS. For more information, visit www.eftps.gov, call EFTPS Customer Service at 1-800-555-4477 or 1-800-733-4829 (TDD), or see Pub. 966, Electronic Federal Tax Payment System: A Guide To Getting Started.

  • To pay by credit or debit card, visit the IRS website at www.irs.gov/e-pay.

  • If you pay by check or money order, make it payable to “United States Treasury.” On your check or money order, be sure to write your EIN, “Form 944-X,” and year corrected.

You do not have to pay if the amount you owe is less than $1.

Previously assessed FTD penalty.

If line 21 reflects overreported tax and the IRS previously assessed a failure-to-deposit (FTD) penalty, you may be able to reduce the penalty. For more information, see the Form 945-A instructions.

Part 4: Explain Your Corrections for the Calendar Year You Are Correcting

22. Correction of Both Underreported and Overreported Amounts

Check the box on line 22 if any correction you entered on lines 7–17 and 19–20d in column 3 reflects both underreported and overreported amounts.

Example.

If you had an increase to social security wages of $1,500 for employee A and a decrease to social security wages of $500 for employee B, you would enter $1,000 on line 8, column 3. That $1,000 represents the net change from offsetting corrections.

On line 24, you must explain the reason for both the $1,500 increase and the $500 decrease.

23. Did You Reclassify Any Workers?

Check the box on line 23 if you reclassified any workers to be independent contractors or nonemployees. Also check this box if the IRS or you determined that workers you treated as independent contractors or nonemployees should be classified as employees. On line 24, give us a detailed reason why any worker was reclassified and, if you used section 3509 rates on lines 14–17 for any worker reclassified as an employee, explain why section 3509 rates apply and what rates you used.

Return not filed because you did not treat any workers as employees.   If you did not previously file Form 944 because you mistakenly treated workers as independent contractors or as nonemployees, file a Form 944 for each delinquent year.

  On each Form 944 for which you are entitled to use section 3509 rates, complete the following steps.
  • Write “ Misclassified Employees ” in dark, bold letters across the top margin of page 1.

  • Enter a zero on line 7 (“Total taxes after adjustments”).

  • Complete the signature area.

  • Attach a completed Form 944-X (see instructions below).

  On each Form 944X, complete the following steps.
  • Complete the top of Form 944-X, including the date you discovered the error.

  • Enter the wage amounts on lines 14–17, column 1.

  • Enter zeros on lines 14–17, column 2.

  • Complete columns 3 and 4 as instructed in Part 3.

  • Provide a detailed statement on line 24.

  • Complete the signature area.

  
If you cannot use section 3509 rates (for example, because the workers you treated as nonemployees were certain statutory employees), file a Form 944 for each delinquent year. Write "Misclassified Employees" in dark, bold letters across the top margin of page 1 of each Form 944. Complete Form 944 using the Instructions for Form 944. Attach a Form 944-X to each Form 944. Complete the top of Form 944-X, including the date you discovered the error, and provide a detailed explanation on line 24.

24. Explain Your Corrections

Treasury regulations require you to explain in detail the grounds and facts relied upon to support each correction. On line 24, describe in detail each correction you entered in column 4 on lines 7–17 and 19–20d. Also use line 24 to describe in detail corrections made on lines 12a, 20b, and 20c. If you need more space, attach additional sheets, but be sure to write your name, EIN, Form 944-X, and calendar year on the top of each sheet.

You must describe the events that caused the underreported or overreported amounts. Explanations such as “social security and Medicare wages were overstated” or “administrative/payroll errors were discovered” are insufficient and may delay processing your Form 944-X because the IRS may need to ask for a more complete explanation.

Provide the following information in your explanation of each correction.

  • Form 944-X line number(s) affected.

  • Date you discovered the error.

  • Amount of the error.

  • Cause of the error.

You may report the information in paragraph form. The following paragraph is an example.

The $100 difference shown in column 3 of lines 6, 8, and 10 was discovered on May 15, 2013, during an internal payroll audit. We discovered that we included $100 of wages for one of our employees twice. This correction removes the reported wages that were never paid.

For corrections shown on lines 14–17, explain why the correction was necessary and attach any notice you received from the IRS.

Part 5: Sign Here

You must complete all three pages of Form 944-X and sign it on page 3. If you do not sign, processing of Form 944-X will be delayed.

Who must sign the Form 944-X?   Form 944-X must be signed by a person who is authorized to sign for the 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 member, partner, or officer having knowledge of its affairs.

  • Single member LLC treated as a disregarded entity for federal income tax purposes—The owner of the LLC or a principal officer duly authorized to sign.

  • Trust or estate—The fiduciary.

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

Alternative signature method.   Corporate officers or duly authorized agents may sign Form 944-X by rubber stamp, mechanical device, or computer software program. For details and required documentation, see Rev. Proc. 2005-39, 2005-28 I.R.B. 82, available at www.irs.gov/irb/2005-28_IRB/ar16.html.

Paid Preparer Use Only

A paid preparer must sign Form 944-X and provide the information in the Paid Preparer Use Only section of Part 5 if the preparer was paid to prepare Form 944-X and is not an employee of the filing entity. Paid preparers must sign paper returns with a manual signature. The preparer must give you a copy of the return in addition to the copy to be filed with the IRS.

If you are a paid preparer, enter your Preparer Tax Identification Number (PTIN) in the space provided. Include your complete address. If you work for a firm, enter the firm's name and the EIN of the firm. You can apply for a PTIN online or by filing Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal. For more information about applying for a PTIN online, visit the IRS website at www.irs.gov/ptin. You cannot use your PTIN in place of the EIN of the tax preparation firm.

Generally, you are not required to complete this section if you are filing the return as a reporting agent and have a valid Form 8655, Reporting Agent Authorization, on file with the IRS. However, a reporting agent must complete this section if the reporting agent offered legal advice, for example, advising the client on determining whether its workers are employees or independent contractors, for federal tax purposes.

How Can You Order Forms, Instructions, and Publications from the IRS?

Visit the IRS website at www.irs.gov/formspubs.

Call the IRS at 1-800-TAX-FORM (1-800-829-3676).

Additional Information

You may find the following forms, instructions, and publications helpful when using Form 944-X.

  • Form W-2, Wage and Tax Statement

  • Form W-3, Transmittal of Wage and Tax Statements

  • General Instructions for Forms W-2 and W-3

  • Form W-2AS, American Samoa Wage and Tax Statement

  • Form W-2CM, Wage and Tax Statement (Northern Mariana Islands)

  • Form W-2GU, Guam Wage and Tax Statement

  • Form W-2VI, U.S. Virgin Islands Wage and Tax Statement

  • Form W-3SS, Transmittal of Wage and Tax Statements

  • Form W-2c, Corrected Wage and Tax Statement

  • Form W-3c, Transmittal of Corrected Wage and Tax Statements

  • Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit

  • Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal

  • Form 945-A, Annual Record of Federal Tax Liability

  • Instructions for Form 843

  • Instructions for Form 944

  • Instructions for Form 944-SS

  • Pub. 15 (Circular E), Employer's Tax Guide

  • Pub. 80 (Circular SS), Federal Tax Guide for Employers in the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands

  • Pub. 966, Electronic Federal Tax Payment System: A Guide To Getting Started


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