IRS Form 944 – Employer’s Annual Federal Tax Return – In the complex world of payroll taxes, small business owners often seek simpler ways to comply with federal requirements. IRS Form 944, known as the Employer’s Annual Federal Tax Return, offers a streamlined option for eligible employers to report and pay federal employment taxes once a year instead of quarterly. This guide covers everything you need to know about Form 944 for the 2025 tax year, including eligibility, filing instructions, deadlines, and recent updates. Whether you’re a new employer or looking to switch from Form 941, understanding Form 944 can save time and reduce paperwork.
What Is IRS Form 944?
Form 944 is an annual tax return used by small employers to report wages paid, federal income tax withheld, and both the employer and employee shares of Social Security and Medicare taxes (FICA taxes). It also accounts for Additional Medicare Tax withheld, adjustments for items like fractions of cents or sick pay, and credits such as the qualified small business payroll tax credit for increasing research activities. Unlike quarterly filings, this form allows eligible businesses to handle their federal employment tax obligations in one go, making it ideal for those with minimal payroll activity.
The form is specifically designed for employers whose annual liability for Social Security, Medicare, and withheld federal income taxes is $1,000 or less. This typically applies if the total wages subject to these taxes are $5,000 or less for the year. Employers in U.S. territories like American Samoa, Guam, or Puerto Rico may have specific exemptions for certain lines unless they have employees subject to U.S. income tax withholding.
Who Needs to File Form 944?
Not every employer can or should use Form 944. The IRS determines eligibility and notifies qualifying businesses in writing to file this form instead of the quarterly Form 941. If you haven’t received such notification but believe your tax liability will be $1,000 or less, you can request permission from the IRS.
Eligibility Criteria
- IRS Notification: You must file Form 944 if the IRS instructs you to do so, even if your liability ends up exceeding $1,000.
- Estimated Liability: Generally for employers with $1,000 or less in annual employment tax liability.
- Request to File: If not notified, contact the IRS between January 1 and April 1 (or postmark a written request by March 16) to switch for the current year. The IRS will confirm in writing; without confirmation, stick to Form 941.
- Switching Back: If your liability grows beyond $1,000, you can request to switch to Form 941 by sending a written request postmarked by March 15 or calling 800-829-0115 by April 1.
Note: As of October 15, 2025, you can no longer designate Form 944 as your filing requirement when applying for an Employer Identification Number (EIN). This change simplifies the EIN process but doesn’t eliminate the form itself.
Key Differences Between Form 944 and Form 941
Form 944 is essentially the annual version of Form 941, which is filed quarterly. Here’s a quick comparison:
| Aspect | Form 944 | Form 941 |
|---|---|---|
| Filing Frequency | Annually | Quarterly |
| Eligibility | Small employers with ≤$1,000 annual liability; IRS notification required | Most employers with payroll taxes |
| Purpose | Report annual wages, withheld taxes, FICA, adjustments, and credits | Report quarterly wages, withheld taxes, FICA, adjustments, and credits |
| Deadline | February 2, 2026 (or February 10 with timely deposits) | Last day of the month following each quarter |
| Best For | Low-volume payroll (e.g., seasonal or part-time) | Ongoing, regular payroll activity |
If you’re unsure which to use, review your past tax liability or consult the IRS.
How to File IRS Form 944
Filing Form 944 can be done electronically or by mail, but electronic filing is encouraged for accuracy and speed.
Step-by-Step Filing Process
- Gather Information: Collect payroll records, including wages, tips, federal income tax withheld, and FICA contributions.
- Complete the Form: Use the official PDF available at https://www.irs.gov/pub/irs-pdf/f944.pdf. Fill in your EIN, business name, address, and details in Parts 1-5.
- Electronic Filing: Use IRS e-file through approved providers or your business tax account at IRS.gov/EmploymentEfile. Attach Form 8974 if claiming the research credit.
- Paper Filing: Mail to the appropriate IRS address based on your location and whether you’re including a payment (e.g., Kansas City, MO, or Ogden, UT for most states). Use Form 944-V for payments by check or money order.
- Pay Any Balance Due: Payments must now be made electronically per Executive Order 14247. Options include EFTPS, direct pay, or credit/debit card.
Structure of Form 944
The form is divided into five parts:
- Part 1: Questions about wages, taxes withheld, Social Security/Medicare taxes (lines 1-12e, including calculations at rates like 12.4% for Social Security and 2.9% for Medicare).
- Part 2: Deposit schedule and monthly tax liability (if over $2,500).
- Part 3: Business status (e.g., if closed).
- Part 4: Third-party designee authorization.
- Part 5: Signature and paid preparer info.
Attach any required statements or schedules, such as for business closures or credits.
Filing Deadlines for 2025 Tax Year
For the 2025 tax year, Form 944 is due by February 2, 2026. If you’ve made all required tax deposits on time and in full, the deadline extends to February 10, 2026. File only once per year, and ensure your postmark or electronic submission meets the deadline to avoid penalties.
Penalties for Late Filing or Payment
Failing to file or pay on time can result in penalties and interest. The trust fund recovery penalty can reach 100% of unpaid taxes for willful non-payment. To avoid issues:
- Make timely deposits using EFT.
- File accurately and on time.
- Request penalty abatement via Form 843 if you have reasonable cause.
Recent Updates for the 2025 Tax Year
Several changes apply to Form 944 for 2025:
- Social Security and Medicare Rates: Social Security tax remains 6.2% each for employer/employee with a wage base of $176,100. Medicare is 1.45% each, with no wage limit.
- Direct Deposit for Refunds: Now available for overpayments; choose this or apply to next return.
- Electronic Payments Required: Balance due must be paid electronically.
- Credit Increases: Qualified small business payroll tax credit max is $500,000.
- Form Changes: Discontinuation of Forms 941-SS/941-PR after 2023; use Form 941 instead. Certain publications like Pub. 51 are discontinued.
Corrections can be made using Form 944-X.
FAQs About IRS Form 944
- Can I file Form 944 if my liability exceeds $1,000? If notified by the IRS, yes; otherwise, use Form 941.
- What if I close my business? Check line 14 and attach a statement with the final wage payment date.
- Is electronic filing mandatory? Not for all, but recommended. Thresholds may apply for larger filers.
- Where can I download the form? Get the official PDF here: https://www.irs.gov/pub/irs-pdf/f944.pdf.
For personalized advice, consult a tax professional or visit IRS.gov. Staying compliant with Form 944 ensures smooth operations for small employers in 2026 and beyond.