HR Basics: Decoding IRS Form 944

Paying quarterly taxes can be a stressful endeavor for small companies. Fortunately, the IRS Form 944 enables small employers to file their taxes only once a year, instead of every quarter. Which employers are eligible for this form and how exactly does it work?

What is the IRS form 944?

The 944 is an annual federal tax form for small employers. Small employers are eligible to submit IRS form 944 if their annual liability payments total less than $1000 in the given year. This total must include tax balances due to social security, Medicare, and withheld federal income taxes. According to the IRS, eligible employers in this category will pay less than $4,000 on the total of these wages throughout the calendar year.

Who has to complete form 944?

Filing a 944 form instead of a 941 form is optional. Regardless of which one, one of the two forms must be completed by its respective due date in order to avoid penalty. Filing form 944 is a great way for small companies to lighten their yearly tax duties. It will reduce the amount of paperwork and filing time into one single submission, as opposed to filing form 941 quarterly.

What is form 944 used for?

The IRS 944 form ensures that all registered employers pay their due balances, regardless of their size or income. If you’re not sure which form to fill out, keep in mind that the IRS will notify you based on your previous liability. If the IRS states that you’ll need to fill out form 944 due to past liability, you can still file form 941 on a quarterly basis, if you so choose. Simply select to change your filing status by calling the IRS or submitting an online request early in the year.

However, the reverse is not true: you cannot fill out IRS form 944 if you were not instructed to do so. If you don’t receive notification from the IRS, but think you should have, reach out to your CPA or the IRS helpline to understand which form you’re supposed to submit. This way your business can check all the compliance boxes without facing any penalties.

When is Form 944 due?

Unlike quarterly payments due throughout the year, this annual form needs to be filed only once. It is due by January 31st of each year, though submitting earlier than this deadline is better for you and your company. Late forms are subject to penalties and fines, so don’t wait too close to the due date to submit.

Do I have to file form 944 if I have no employees?

A form 944 is due even if you have no employees. You become responsible for filing a 941 or 944 as soon as you are officially registered as an employer. Registered companies owe balances on their employment status regardless of how many employees they have.