What Is Form 944, and How to Know If You Need to File One

As an employer, you must withhold certain taxes from employees’ wages. Then, file and deposit them with the proper agencies. One form your business may need to file to report payroll taxes withheld from employee wages is Form 944. Read on to get the scoop on what is Form 944 and whether or not your business must use it.

What is Form 944 used for?

Form 944, Employer’s Annual Federal Tax Return, is a form that eligible small businesses file annually to report federal income tax and FICA tax (Social Security and Medicare taxes) on employee wages.

Small business owners also use IRS Form 944 to calculate and report their employer Social Security and Medicare tax liability.

The IRS designed the form especially for small businesses with fewer employees and a smaller tax liability than other companies.

Form 944 vs. 941

At this point you may be thinking, Hey, this 944 tax form sounds eerily similar to Form 941. If you’re thinking this, you’re not wrong.

Form 944 and Form 941 are used for the same purpose: to report employee wages and withheld federal income and FICA taxes.

So, what’s the difference between Form 944 vs. 941? The main difference between the two forms is that employers must file Form 941 quarterly. Again, if you must file Form 944, you only do so on an annual basis.

Employers cannot use both forms. And, you do not get to choose between using Form 941 or 944. The IRS determines which form you need to report wages and payroll taxes on.

Who needs to file Form 944?

Not every business owner can use Form 944 to report wages and taxes. In fact, only a specific group of small businesses can.

The IRS tells you whether you need to file a 944 form. Typically, if your annual liability for Social Security, Medicare, and federal income taxes is $1,000 or less for the year, the IRS notifies you to file Form 944. Usually, this comes in the form of a written notice.

If you have not received a notice but believe your business meets eligibility requirements, contact the IRS to request to file a 944. You can contact the IRS by calling 1-800-829-4933 or sending a written request.

Keep in mind that you must submit your request within the first few months of the year. The IRS will notify you if you can file Form 944 following your request.

Who can’t file Form 944?

You cannot file Form 944 if the IRS did not tell you to. If you request to file Form 944 and the IRS does not reply, you must file Form 941.

Also, if you employ only household or agricultural employees, you cannot file Form 944.

What about new employers?

Some new employers might be able to file Form 944.

Before you hire employees, apply for an EIN (Employer Identification Number). The EIN identifies your business when you report taxes. To apply, file Form SS-4, Application for Employer Identification Number.

When filling out Form SS-4, indicate whether or not you expect your employment tax liability to be $1,000 or less in box 14.

Requesting to file Form 941 instead of Form 944

If you’re eligible to file Form 944 but would prefer to file Form 941 instead, you can elect to

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