IRS Form 944 is a form for small employers whose total annual liability in taxes, including withheld federal taxes, Social Security and Medicare, is less than or equal to $1,000. The form enables these employers to file once a year; instead of every quarter as larger employers do. Employers cannot choose to file Form 944. The IRS informs employers in this situation that they must file that form instead of the usual Form 941, 941-SS or 941-PR. Any employers wanting to continue filing these other forms must contact the IRS via phone or written request for approval.
Some employers filing Form 944 may find that they qualify to make quarterly tax payments if they have a net tax liability of at least $2500 per quarter. These companies must make an electronic deposit to the IRS via the Electronic Federal Tax Payment System or EFTPS. These deposits must be made before the assigned due dates or the next business day if a due date falls on a Saturday, Sunday or holiday. Failing to make a federal tax deposit can incur penalties and interest. Other tax deposit requirements occur when $100,000 or more in taxes are accrued in a day. In this case, the tax payment must be deposited the next business day.
Each year, Form 944 must be filed by January 31, at which time all taxes should be paid in full. Payment can be made via electronic payment, electronic fund withdrawal or with a credit/debit card. Employers are required to distribute W-2s or their equivalent to their employees to avoid further tax penalties. If employers are not notified by the IRS, employ only household or only agricultural employees, they cannot use Form 944. Anyone with questions about IRS Form 944 or other business related tax return questions should contact a tax professional for help and advice.