If you’re a small business owner, you’ve likely come across IRS Form 944—especially if your annual payroll taxes are on the lower end. It’s one of those forms that seems simple on the surface but has specific requirements and deadlines attached. Before filing, it’s important to understand if you’re eligible and how this form differs from other payroll tax filings.
Many businesses streamline their federal payroll obligations by using payroll processing services that help avoid errors and missed filings. But whether you manage taxes in-house or not, knowing how Form 944 works is essential.
What Is Form 944?
Form 944 is the IRS’s Employer’s Annual Federal Tax Return, created for smaller employers who owe $1,000 or less in federal payroll taxes annually. Instead of filing every quarter like most businesses using Form 941, eligible employers only need to file once a year.
This annual return simplifies compliance and cuts down on paperwork for small businesses. It allows you to report employee wages, withheld federal income taxes, and both employer and employee shares of Social Security and Medicare. The IRS uses this form to assess whether you’ve overpaid, underpaid, or are on target with your employment taxes.
It’s worth noting that the IRS doesn’t automatically assign this form to all small businesses—you must be approved or notified by the IRS before filing Form 944.
What Is Form 944 Used For?
The 944 federal tax form helps small employers meet their tax obligations without the hassle of filing multiple times a year. Specifically, it’s used to:
- Report federal income taxes withheld from employees’ paychecks
- Account for Social Security and Medicare taxes (both employee and employer portions)
- Claim any tax credits, like COBRA premium assistance, if applicable
- Calculate total taxes owed or refunds due
By condensing all reporting into one form, it offers a convenient way for small businesses to stay compliant—but only if the IRS allows you to file it. Incorrectly filing Form 944 when you’re required to file Form 941 could lead to penalties or confusion with your tax records.
Who Files Form 944?
You are generally required to file Form 944 only if the IRS has explicitly instructed you to use it. This form replaces the need to file quarterly Forms 941 for eligible small businesses. If you’ve received this notice, you’re required to use Form 944 to report:
- Wages you’ve paid to employees
- Tips reported to you by employees
- Federal income tax withheld from wages and tips
- Both the employer and employee share of Social Security and Medicare taxes
- Additional Medicare Tax withheld from high-income earners
- Any current-year adjustments for sick pay, tips, fractions of cents, or group-term life insurance
- Payroll tax credit for small businesses increasing research
If you haven’t received IRS approval to file Form 944, you must continue filing Form 941 on a quarterly basis—even if your payroll tax liability is low.
Can I File Form 944 Instead of 941?
Only if the IRS has informed you in writing that you are authorized to do so. Filing Form 944 without this approval could result in processing delays, missed payments, and even penalties. The IRS carefully controls who can use Form 944 because annual filing creates a longer gap between tax collection and reporting.
Employers wishing to switch from Form 941 to Form 944 must submit a request to the IRS, typically by April 1 of the current tax year. The IRS may approve or deny the request based on your estimated annual liability.
Bottom line: don’t make the switch unless you’re explicitly told to—or you’ve applied and been approved.
Form 944 vs 941: What’s the Difference?
Understanding the difference between Form 941 and Form 944 helps clarify why it matters which one you’re filing:
| Feature | Form 944 | Form 941 |
| Filing Frequency | Annually | Quarterly |
| Eligibility | Small employers with ≤ $1,000 annual tax liability, IRS-approved | All employers unless IRS authorizes Form 944 |
| IRS Authorization | Required — must be notified or approved by IRS | Default filing requirement |
| Reporting Period | Calendar year | Each quarter you pay taxable wages (every 3 months) |
| Due Dates | January 31 of the following year | The last day of the month following each quarter |
| Tax Deposit Rules | May pay with return if liability < $2,500; otherwise, deposits required | Must follow monthly/semiweekly deposit schedule |
| Complexity | Lower (less frequent filing) | Higher (frequent reporting and deposits) |
Form 944 is designed to ease the burden on very small businesses, but for those with higher payroll or who grow mid-year, Form 941 remains the standard.
Form 944 Instructions: How to Fill It Out
Filing IRS Form 944 requires accuracy and attention to the form’s structure. Here’s how to complete it based solely on the IRS’s official version:
1. Gather Required Information
Before filling out the form, collect your Employer Identification Number (EIN), the total wages, tips, and compensation paid, federal income tax withheld, and details related to Social Security and Medicare taxes, including any applicable adjustments or credits.
2. Fill in Wage, Tax, and Adjustment Details
Complete Part 1 by entering:
- Wages and tips paid
- Federal income tax withheld
- Social Security and Medicare wages and tips
- Applicable taxes based on provided rates
- Total taxes before and after adjustments
- Any qualified small business payroll tax credit (if applicable, using Form 8974)
- Total deposits made
- Your balance due or overpayment status
3. Report Monthly Liability or Use Deposit Schedule
In Part 2, if your total tax liability for the year (line 9) is $2,500 or more, report your monthly liabilities or file Form 945-A if you’re a semiweekly depositor. If line 9 is less than $2,500, you can skip to Part 3.
4. Provide Business Status and Authorize Designee
- In Part 3, indicate if your business has closed or stopped paying wages, including the final wage payment date.
- In Part 4, authorize a third-party designee to discuss the return with the IRS, if applicable.
5. Sign and Submit the Form
In Part 5, sign and date the form, provide your printed name and title, and include your daytime phone number. If a preparer completes the form, they must also sign and provide their PTIN and firm details.
Where to Mail Form 944?
The mailing address for Form 944 depends on two things:
- Whether you’re including a payment with the form
- The state where your business is located
The IRS has specific addresses listed in the instructions for each scenario. Always double-check the official IRS mailing information to ensure your return gets to the right place. Alternatively, you can e-file through approved IRS e-file providers for faster and more secure processing.
Stay Compliant With the Right Filing Approach
Form 944 can be a powerful tool for simplifying your tax responsibilities—but only if you’re authorized to use it. Filing the wrong form can cause processing issues, incorrect tax records, or even penalties from the IRS.
For small employers, staying on top of reporting requirements is just as important as paying wages. Whether you’re required to file quarterly or annually, knowing the difference between Form 941 and Form 944 can keep your business in good standing.
When tax season rolls around, preparation is everything. Now that you know who files Form 944, what it’s used for, and how it differs from Form 941, you’re in a better position to stay compliant and organized—without unnecessary stress.