Form 944

What is IRS Form 944?

Running a small business means wearing a lot of hats, and payroll taxes can feel like one of the biggest ones. The IRS created the 944 tax form to make life a little easier for certain small employers. Instead of filing quarterly tax returns, eligible businesses can use this form to report their federal income tax withholding, plus Social Security and Medicare taxes, just once a year.

With Form 944, you’ll report information such as:

• Employee wages and tips

• Federal income tax withheld

• Employer and employee portions of Social Security and Medicare taxes

• Adjustments to Social Security and Medicare wages and tips (for example, sick pay or group-term life insurance)

You may also be able to report certain credits or special adjustments depending on IRS rules for the year.

Form 944 is designed for employers with an annual payroll tax liability of $1,000 or less, typically the smallest of small businesses. Simplifying the process can help business owners spend less time on paperwork and more time focusing on what really matters: serving customers and running their companies.

Who Needs to File Form 944?

Eligibility to file Form 944 isn’t something you decide on your own: It’s determined by the IRS. You can only file if you’re notified by the IRS to do so or if you request and receive written approval.

There are also exceptions. If you’re a household employer (paying only domestic help) or an agricultural employer (paying only farmworkers), you are not eligible to file Form 944, regardless of how little you owe. You must use different IRS forms.  

The IRS usually notifies eligible businesses directly, but you can request to opt in or out if your situation changes. For instance, if your workforce grows and you owe more than $1,000 in payroll taxes, you may need to switch to filing Form 941, the quarterly federal tax return that most employers use to report wages and payroll taxes. On the other hand, if your business shrinks or payroll remains very small, filing annually could save you time and stress. But remember, you must contact the IRS and wait for written approval before switching.

Common examples of businesses that may be required to file Form 944 include sole proprietors with one or two employees or other microbusinesses where payroll is minimal. Sole proprietors without employees (other than themselves) generally don’t need to file, since they aren’t subject to employment taxes.

Form 944 vs. Form 941: What’s the Difference?

At first glance, Form 944 and Form 941 serve the same purpose: They both report federal income tax withheld, along with Social Security and Medicare taxes. The key difference is how often they’re filed, and which employers qualify.

Form 941 is the quarterly federal tax return most businesses are required to file. It covers wages, employee tips, federal income tax withholdings, and both the employer and employee portions of Social Security and Medicare taxes, including any additional Medicare tax withholdings. Employers may also need to report adjustments for things like sick pay or tips. A few more considerations:

• Seasonal businesses only file Form 941 for the quarters they operate.

• Businesses that employ only farmworkers or household employees don’t file Form 941.

Form 944 is the once-a-year version of Form 941, available only to the smallest employers, those with $1,000 or less in total payroll taxes for the year. You can’t choose this form on your own; the IRS must notify you or approve your request.

Why does this matter? Filing once a year instead of every quarter can take a big administrative burden off a small business. But it’s important to use the right form. Filing the wrong one can cause delays, errors, or even penalties.

How to Fill Out Form 944 (Step-by-Step Instructions)

Now that you know what Form 944 is, let’s walk through the filing process step by step. The IRS also provides detailed Form 944 instructions, and you can always download the most current version of the form directly from its website.

Before you start filling out Form 944, make sure you have the right numbers in front of you. You’ll need details on your employees’ total wages for the year, the federal income tax you withheld from their paychecks, and the amount of payroll taxes owed. If you use payroll software or a payroll service, these figures should be easy to gather.

Completing the form:

• Part 1: Start by entering the total wages, tips, and other compensation you paid to employees during the year. Next, record the amount of federal income tax you withheld. Then, calculate the wages subject to Social Security and Medicare taxes. Multiply those amounts by the rates shown on the form to determine the totals. If you had no wages subject to these taxes, check the box provided and skip ahead as directed.
  
  Once you’ve calculated the amounts, total them and use those numbers to determine your tax liability before adjustments (line 4e). Continue filling in the remaining boxes in Part 1, including adjustments and any deposits or credits you’ve already made. The result will show whether you owe additional taxes or qualify for a refund.

• Part 2: In this section, indicate whether your tax liability for the year is less than $2,500. If it is, you can skip to Part 3. If it’s more than $2,500, you’ll need to break down your liability by month.

• Part 3: If your business has closed or you stopped paying wages, check the box here and enter the final date you paid employees. Otherwise, leave this section blank.

• Part 4: You’ll be asked whether you want to allow the IRS to speak with a third-party designee, such as an employee, CPA, or payroll provider, about this return.

• Part 5: Finally, sign and date the form. Be sure all information is complete and accurate. An unsigned return is considered incomplete.

When and How to File Form 944

Form 944 is an annual filing, which means you only need to submit it once a year. The deadline is January 31 following the year you’re reporting. For example, your 2025 form is due February 2, 2026. If you’ve made all your required deposits on time and in full, the IRS usually gives you until February 10 to file.

Ways to file your completed Form 944:

• By mail: You can print and mail your completed form to the correct IRS address (listed in the instructions).

• Electronically: Many small businesses prefer e-filing, either directly through the IRS system or by using a payroll provider like SurePayroll® By Paychex.

Late filing or late payment can result in IRS penalties and interest. The penalty amount depends on how much you owe and how late the payment is. To avoid this stress, mark your calendar early, or better yet, let a payroll service help you remember the due dates.

You can always check the IRS website for the latest tax due dates and filing calendar.

What If You Have No Employees or Paid No Wages?

It can be confusing to know whether you still need to file Form 944 if you didn’t pay any wages during the year. The answer is yes. If the IRS has instructed you to file Form 944, you must submit a return even if your payroll is zero. In that case, you’ll file what’s called a “zero return.” This lets the IRS know that you didn’t withhold or owe any employment taxes for the year.

If your business situation changes, say you no longer have employees or you permanently stop paying wages, you can ask the IRS to change your filing status. This could mean being moved off Form 944 entirely, so you won’t have to file a zero return each year going forward.

Common Mistakes to Avoid with Form 944

Even though Form 944 is meant to simplify payroll reporting, mistakes can still happen. Here are some of the most common pitfalls and how to steer clear of them.

• Missing the deadline. Form 944 is due by January 31 (or February 10 if all deposits were made on time). Late filing can lead to penalties and interest, even if you owe little or nothing.

• Filing the wrong form. Some businesses mistakenly submit Form 944 when they should be using Form 941 or vice versa. Always follow IRS instructions and confirm which form you’re required to file before you begin.

• Not depositing taxes on time. Even if you only file once a year, you may still need to make payroll tax deposits throughout the year. Failing to deposit on schedule can trigger penalties.

• Using the wrong Employer Identification Number (EIN) or business details. An incorrect EIN, business name, or address can cause delays in processing your return. Double-check your information before you file.

• Misreporting Social Security wages. This is one of the most common errors. Be sure the wages you report match your payroll records and that you calculate Social Security taxes correctly.

Calculation errors for taxes or credits, mistakes in reporting tips, or misclassifying workers (independent contractor vs. employee) can also cause problems.

How SurePayroll Can Help Simplify Form 944 Filing

Filing payroll tax forms doesn’t have to be a headache. A payroll service like SurePayroll can help you with the heavy lifting.

Here’s how SurePayroll helps small businesses with Form 944:

• Automation you can trust. SurePayroll automatically calculates, and can file and submit your Form 944 along with any required payroll tax deposits.

• Error prevention. By handling the calculations and deadlines for you, SurePayroll can help reduce the risk of costly mistakes.

• Time savings. Instead of spending hours sorting through payroll data and IRS instructions, you can focus on running and growing your business.

Working with SurePayroll today can help you spend less time worrying about forms and more time doing what you love.

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