Form 944 — Employer's Annual Federal Tax Return
Form 944 is the annual alternative to Form 941 for small employers whose annual payroll tax liability is $1,000 or less. Instead of filing four quarterly Form 941s, qualifying employers file one annual Form 944 by January 31. The IRS notifies employers in writing if they qualify to file Form 944. For tax professionals, Form 944 simplifies payroll tax compliance for very small businesses — but the employer must be notified by the IRS to use it.
Key Rules and Authority
| Rule | Detail |
|---|---|
| Eligibility Threshold | $1,000 annual payroll tax liability |
| Filing Deadline | January 31 |
| Deposit Rules | Annual depositor if liability ≤ $2,500/quarter |
| IRS Notification | Required — employer cannot self-elect |
| Transition to 941 | Contact IRS to switch back |
| Penalties | Same as Form 941 — FTD and FTF penalties |
Form 944 vs. Form 941 — Which to File
Form 944 is only available to employers that the IRS has notified in writing that they qualify. An employer cannot simply choose to file Form 944 instead of Form 941 — the IRS must send a notification letter. If an employer receives a Form 944 notification but prefers to file Form 941 quarterly, they must contact the IRS by April 1 of the tax year to request the change. If an employer's payroll tax liability grows above $1,000 annually, the IRS will notify them to switch back to Form 941. Employers who file Form 944 without IRS authorization are considered to have filed late Form 941s.
Frequently Asked Questions
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