What is IRS Form 944? A Guide for Small Employers

If you are a small business owner with a small payroll, with an expected annual employment tax liability of $1,000 or less, the IRS may require you to file Form 944 annually instead of Form 941 quarterly. But what does that mean, and who does it affect?

Form 944 is a payroll tax return designed to reduce the filing burden for the smallest employers. Although the IRS previously planned to discontinue Form 944 after tax year 2025, the IRS confirmed in January 2026 that the retirement had been delayed. Form 944 remains in effect for tax year 2026, and the IRS has not announced a new retirement date. Employers should continue following their IRS-assigned filing requirements and monitor future agency communications for changes.

In this article, we will look at what Form 944 is, who is eligible, and how it differs from Form 941. We’ll also help you understand the steps you’ll need to take as you prepare to file, including deadlines, line-by-line instructions, filing methods, and more.

What Is IRS Form 944?

IRS Form 944, also known as the Employer's Annual Federal Tax Return, is an annual payroll tax return form that takes the place of quarterly filing using Form 941. Small employers who qualify based on their tax liability use this form to report withheld income tax and both the employer and employee shares of FICA (Social Security and Medicare). The IRS introduced the form in 2006 to provide filing relief for approximately 950,000 small businesses that had little or no tax due on their quarterly returns.

Form 944 does not cover federal unemployment tax, or FUTA (Form 940), income tax withheld from non-payroll payments like pensions (Form 945), or agricultural wages (Form 943).

Who Must File Form 944?

Your business may qualify to file form 944 if you expect an annual employment tax liability of $1,000 or less, which is roughly equivalent to paying about $5,000 or less in total wages for the year (with typical withholding).

You cannot choose Form 944 on your own. You file Form 944 only if the IRS has notified you in writing to do so, typically using an automated notice. If notified, you must file Form 944 for that calendar year even if your actual liability exceeds $1,000.

Household employers, agricultural employers, and employers above the threshold or who have not received an IRS notification should not file Form 944. Instead, they should file Schedule H (household employers), Form 943 (agricultural employers), or Form 941 (employers above the threshold).

Form 944 vs. Form 941: Key Differences

Form 944 and Form 941 both report the same three taxes: federal income tax withheld, Social Security, and Medicare. The differences relate to how often they must be filed, who is eligible, and who determines which form should be used.

Here’s a quick breakdown of Form 944 vs. Form 941:

Form 944 Filing Deadlines

Eligible employers should file Form 944 once each year. The standard due date is January 31 for the previous tax year. If you made all your required tax deposits on time and in full, you have until February 10 to file.

If any due date falls on a weekend or federal holiday, the deadline shifts to the next business day. For example, January 31, 2027 is a Sunday, so your 2026 Form 944 is due Monday, February 1, 2027.

Although the form itself is filed annually, you may still be required to make payment deposits monthly or semi-weekly depending on your accumulated liability.

How to Fill Out Form 944: Line-by-Line Instructions

Form 944 has five parts. Before filling out the form, you will need your Employer Identification Number (EIN), legal business name, address, and payroll records for the year. It may also help to review your Form W-2 totals. The IRS compares these totals with the amounts on your Form 944, and mismatches can trigger follow-up from the IRS or the Social Security Administration.

Follow these step-by-step instructions to complete the form. Throughout the form, don’t use dollar signs, and always show amounts to the correct cent, even if the amount is zero. Leave any line with a zero value blank, except line 9.

Start: Header Information

At the top of page 1, enter your EIN, legal name, trade name, and address. Use the legal name you provided when you applied for your EIN. For example, a sole proprietor enters their own name on the Name line and the business name on the Trade name line. Leave the Trade name line blank if it matches your legal name. Don't use a Social Security number or Individual Taxpayer Identification Number (ITIN) in place of an EIN. You'll also enter your name and EIN at the top of page 2.

Part 1: Answer These Questions for This Year

In Part 1, report annual wages, calculate the taxes owed on them, and compare that total to the deposits you've already made.

• Line 1: Wages, tips, and other compensation. Enter the total amounts that appear in box 1 of your employees' W-2 forms.
• Line 2: Federal income tax withheld. Enter the federal income tax you withheld from employee wages, tips, and taxable fringe benefits during the year.
• Line 3: No wages subject to Social Security or Medicare tax. Check this box only if none of the wages on line 1 are subject to Social Security or Medicare tax. If you check it, skip to line 5.
• Lines 4a–4d: Taxable Social Security and Medicare wages and tips. Each of these lines has two columns. Enter the taxable wages or tips in column 1. Then multiply by the rate shown to calculate the tax in column 2.
  • Line 4a (Social Security wages): Multiply by 0.124, which covers the 6.2% employee share and the 6.2% employer share.
  • Line 4b (Social Security tips): Enter tips employees reported to you and multiply by 0.124.
  • Line 4c (Medicare wages and tips): Multiply by 0.029, which covers the 1.45% employee share and the 1.45% employer share. Medicare has no wage cap.
  • Line 4d (Additional Medicare Tax wages): Most Form 944 filers leave this line blank, as it applies only if you paid an employee more than $200,000.
  • Line 4e: Total Social Security and Medicare taxes: Add the column 2 amounts from lines 4a through 4d.
• Line 5: Total taxes before adjustments. Add line 2 and line 4e.
• Line 6: Current year's adjustments. Enter small corrections for the current year. Common examples include rounding differences (fractions of cents), certain third-party sick pay, and the uncollected employee share of Social Security and Medicare taxes on tips. Use a minus sign for adjustments that reduce your total. Corrections to a prior year's return don't go here. Use Form 944-X instead.
• Line 7: Total taxes after adjustments. Combine lines 5 and 6.
• Line 8: Qualified small business payroll tax credit for increasing research activities. If your business elected to apply part of its research credit against payroll taxes, enter the amount from Form 8974 and attach that form. Most small employers leave this line blank.
• Line 9: Total taxes after adjustments and nonrefundable credits. Subtract line 8 from line 7. This is the most important number on the form. It determines how you complete Part 2 and whether you can pay with your return. Line 9 can't be less than zero.
• Line 10: Total deposits for this year. Enter all tax deposits you made for the year. Include any overpayment you applied from a prior return or from a Form 944-X or 941-X filed during the year.
• Line 11: Balance due. If line 9 is more than line 10, enter the difference here. You don't have to pay a balance under $1.
• Lines 12a–12e: Overpayment. If line 10 is more than line 9, enter the difference on line 12a. On line 12b, choose whether to apply the overpayment to your next return or receive a refund. If you choose a refund, enter your bank's routing number, account type, and account number on lines 12c through 12e for direct deposit. Never make entries on both line 11 and line 12a.

Part 2: Tell Us About Your Deposit Schedule and Tax Liability for This Year

Part 2 (line 13) tells the IRS when your tax liability built up during the year. They use this information to check whether your deposits were made on time.

• If Line 9 is less than $2,500: Check the first box and move on to Part 3.
• If Line 9 is $2,500 or more: Check the second box. Monthly schedule depositors then enter their tax liability for each month on lines 13a through 13l and the annual total on line 13m. Record each liability in the month you paid the wages, not the month you made the deposit. The total on line 13m must equal line 9.

Semiweekly schedule depositors skip the monthly entries and attach Form 945-A instead. This also applies to employers who became semiweekly depositors during the year by accumulating $100,000 or more in tax liability on a single day.

If line 13m doesn't match line 9, the IRS may not count your deposits as timely. If you leave the monthly entries blank, the IRS may assess an "averaged" failure-to-deposit penalty.

Part 3: Tell Us About Your Business

Part 3 contains a single question that applies only if your business closed during the year. If line 14 doesn't apply, leave it blank.

• Line 14 – Business closed or stopped paying wages. If you permanently went out of business or stopped paying wages, check this box and enter the date you last paid wages. Attach a statement with the name of the person keeping your payroll records and the address where they'll be kept.

Part 4: May We Speak With Your Third-Party Designee?

Part 4 lets you authorize someone else to discuss your return with the IRS. This could be an employee, a paid preparer, or another person you trust. A designee can supply missing information, ask about the return's processing, and respond to certain IRS notices about math errors. A designee can't bind you to additional tax or represent you before the IRS.

• To Name a Designee: Check "Yes" and enter the person's name, phone number, and a five-digit PIN they choose. Name a specific individual, not a firm.
• Duration: The designee authorization expires one year after the return's due date.

Part 5: Sign Here

Form 944 isn't valid until an authorized person signs it. Who signs depends on how your business is organized:

• Sole Proprietorship: The owner
• Corporation (including an LLC taxed as a corporation): The president, vice president, or another authorized principal officer
• Partnership (including an LLC taxed as a partnership): An authorized partner, member, or officer
• Single-Member LLC Treated as a Disregarded Entity: The owner or an authorized principal officer
• Trust or Estate: The fiduciary

An authorized agent may also sign if a valid power of attorney is on file with the IRS. The signer enters their printed name, title, date, and best daytime phone number.

Paid Preparer Use Only: If you paid someone outside your business to prepare the return, that person must complete this section. They provide:

• Signature
• Preparer tax identification number (PTIN)
• Firm name
• Firm EIN
• Address.

Reporting agents with a valid Form 8655 (Reporting Agent Authorization) on file generally don't complete this section.

How to File Form 944

You can file Form 944 electronically or on paper. The IRS encourages e-filing because returns process faster and you get confirmation that the IRS received them.

• Electronic Filing: Use the IRS Modernized e-File (MeF) system. You'll need IRS-approved tax software, an authorized e-file provider, or a payroll service that files on your behalf. Some providers charge a fee. If you e-file, don't also mail a paper copy.
• Paper Filing: If you file on paper, the address you should mail to depends on where your business is located and on whether you're including a payment. The table below reflects the most recent form instructions.

For paper returns, the return is generally considered on time if it's postmarked by the due date.

Note: Private delivery services can't deliver to P.O. boxes. If you use one, find the correct street address on the IRS website.

Payment Methods

How you pay depends on whether you're making a deposit during the year or paying a balance due with your return.

• Tax Deposits: These must be made by electronic funds transfer (EFT). Most employers use the Electronic Federal Tax Payment System (EFTPS) or their IRS business tax account, both of which are free. If you miss the EFTPS cutoff, your bank may be able to send a same-day wire payment for a fee.
• Balance Due: A balance due with your return can be paid by EFT, by electronic funds withdrawal (EFW) when you e-file, or by credit or debit card through an IRS-approved processor. You can also pay by check or money order made out to "United States Treasury," although the IRS asks employers to pay balances electronically whenever possible. Include Form 944-V, the payment voucher located at the bottom of page 3 of Form 944, with any check or money order.

Don't use EFW, a credit card, or a debit card for tax deposits. Those methods are only for a balance due with the return.

Tax Deposit Requirements for Form 944 Filers

Filing Form 944 once a year doesn't always mean paying once a year. Whether you can pay with your return depends on your total tax liability for the year. Don’t confuse the threshold that determines eligibility with the threshold that determines deposits:

• $1,000 is the annual liability threshold that determines eligibility. It decides whether you file Form 944 or Form 941.
• $2,500 is the annual liability threshold that determines deposits. It decides whether you can pay with your return or must make deposits during the year.

If line 9 is less than $2,500 for the year, you can pay the full amount with your return. You can also choose to make deposits during the year. If you're not sure your liability will stay under $2,500, depositing as you go is the safer choice.

If line 9 is $2,500 or more for the year, you must make deposits. The schedule depends on your quarterly liability:

• If your liability is less than $2,500 for a quarter, you can deposit that quarter's taxes by the last day of the month after the quarter ends. If your fourth-quarter liability is under $2,500, you can pay it with your return.
• If your liability is $2,500 or more for a quarter, deposit on a monthly or semiweekly schedule.

Monthly vs. Semiweekly Deposit Schedules

Your deposit schedule is based on your total tax liability during a "lookback period." For Form 944 filers, the lookback period is the calendar year two years before the current year. For 2026, that's 2024.

• Monthly Depositor: Your lookback period liability was $50,000 or less. Deposit each month's taxes by the 15th of the following month.
• Semiweekly Depositor: Your lookback period liability was more than $50,000. Deposit within a few business days of each payday, based on the day of the week you pay wages.
• New Employers: New employers are monthly depositors in their first year because their lookback period liability is treated as zero.
• The $100,000 Next-Day Deposit Rule: If you accumulate $100,000 or more in tax liability on any single day, you must deposit it by the next business day. This rule applies regardless of your regular schedule. A monthly depositor who triggers it becomes a semiweekly depositor for the rest of that year and all of the next. Few Form 944 filers will reach this threshold, but it applies if they do.

What Happens If Your Tax Liability Exceeds $1,000?

If the IRS notified you to file Form 944, do so for that year, even if your liability ends up higher than $1,000. Depending on the amount, you may also need to make deposits during the year. The IRS will typically send a notice moving you to quarterly Form 941 filing in a future year.

How to Correct a Filed Form 944

If you find an error on a Form 944 you already filed, correct it with Form 944-X, Adjusted Employer's Annual Federal Tax Return or Claim for Refund. File this form separately rather than using a new Form 944 to fix a previous one.

You should file Form 944-X for any of the following errors:

• Wages misclassified or reported on the wrong line
• Incorrect Social Security or Medicare wage amounts
• Unreported tips or missed adjustments for tips
• Federal income tax withholding reported incorrectly

Form 944-X offers two ways to correct an error:

• Underreported Tax: Use the adjustment process. Pay the additional tax owed when you file Form 944-X.
• Overreported Tax: You can choose either process. The adjustment process applies the overpayment as a credit to the return period in which you file Form 944-X. The claim process requests a refund or abatement instead.

Form 944-X Filing Deadlines

For underreported tax, file Form 944-X by the due date of the return for the period in which you discovered the error. For example, an error discovered in 2026 should be corrected by the due date of your 2026 Form 944. Filing on time and paying the amount owed when you file generally avoids failure-to-pay and failure-to-deposit penalties on the corrected amount.

For overreported taxes, the deadline to file Form 944-X is generally three years from the date the original Form 944 was filed or two years from the date the tax was paid, whichever is later. Returns filed before April 15 of the following year are generally treated as filed on April 15. If using the adjustment process to apply a credit, Form 944-X must be filed more than 90 days before the period of limitations expires. If 90 days or less remain, you must use the claim process to request a refund or abatement.

Penalties for Late Filing, Late Payment, and Failure to Deposit

The IRS can assess penalties when Form 944 is filed late, when taxes are paid late, or when required deposits are late or missing. Interest accrues on unpaid balances from the original due date until you pay in full.

• Failure-to-file penalty. This penalty is generally 5% of the unpaid tax for each month or partial month the return is late. It's capped at 25%.
• Failure-to-pay penalty. This penalty is generally 0.5% of the unpaid tax for each month or partial month the tax remains unpaid. It's also capped at 25%. If both penalties apply in the same month, the failure-to-file penalty is reduced by the failure-to-pay amount.
• Failure-to-deposit penalty. If you're required to make deposits and they're late, short, or not made electronically, the penalty depends on how late the deposit is. Paying with your return when you were required to deposit can also trigger this penalty.

• Trust fund recovery penalty. Withheld income tax and the employee share of Social Security and Medicare taxes are considered "trust fund" taxes. The employer holds them on behalf of employees and the government. If these taxes aren't paid, the IRS can hold responsible individuals personally liable for 100% of the unpaid amount, even if the business has closed. Responsible individuals can include owners, officers, or others with authority over payments who willfully failed to pay.

If you receive a penalty notice, respond with an explanation. The IRS may reduce or remove penalties if you can show reasonable cause.

How to Switch Between Form 944 and Form 941

You can ask the IRS to change your filing requirement in either direction, but the change doesn't take effect until the IRS confirms it in writing.

• Requesting to file Form 944 instead of Form 941: If you expect your annual employment tax liability to be $1,000 or less, you can request annual filing. Based on current rates, this generally means you paid about $5,000 or less in wages for the year.
• Requesting to file Form 941 instead of Form 944: If the IRS notified you to file Form 944 but you'd prefer quarterly filing, you can request the switch using the same phone number and request windows.

How To Request a Change: Call the IRS at 800-829-4933 between January 1 and April 1 of the year you want to file Form 944. You can also mail a written request postmarked between January 1 and March 15. (In 2026, the mail deadline was March 16, since March 15 fell on a Sunday.)

Written requests go to one of two IRS addresses, based on where you'd mail a return without a payment. The current Form 944 instructions list both addresses. If you don't receive written confirmation from the IRS, continue filing the form you were originally assigned.

What if the IRS Changes Your Filing Requirement?

The IRS reviews your liability each year. If your Form 944 liability exceeds $1,000, you may receive a notice instructing you to file quarterly using Form 941. A CP250A notice tells you your filing requirement has changed. A CP250B notice tells you to keep filing Form 944 for the current year and switch to Form 941 the following year. Follow the instructions and dates on the notice you receive.

Keep an eye on IRS announcements as well. The IRS has delayed its plan to retire Form 944, but it could revisit that decision, so watch for notices about your filing requirement.

For a look at every form you may need to file, see our guide to employer tax forms. Planning ahead for January? Use our year-end payroll and tax checklist.