Form 944, Employer's Annual Federal Tax Return

Who qualifies

Form 944 is available only to employers whose annual federal employment tax liability (income tax withheld plus both halves of Social Security and Medicare) is $1,000 or less. The IRS notifies eligible employers in writing; you cannot self-elect into Form 944 without IRS approval. New employers can request 944 status when applying for an EIN if they expect to pay $5,000 or less in wages for the year.

Annual filing convenience

Form 944 is due January 31 each year and replaces all four quarterly Form 941 filings. The simpler schedule reduces administrative burden for very small businesses — typically a sole proprietor with one part-time employee or an S-corp owner paying themselves a small salary.

Switching to or from Form 941

Once notified to file Form 944, you must continue until the IRS tells you to switch. If your liability grows beyond $1,000, you may request to switch to Form 941 for the following year by submitting a written request before April 1 or by phone before April 1.

Deposits

Most Form 944 filers can pay their entire annual liability with the return because total liability is so small. Larger 944 filers may still need to deposit — generally monthly — using EFTPS.

Coordination with other forms

Even on Form 944, you still issue annual W-2s, file Form W-3 with the SSA, file Form 940 for FUTA, and (if applicable) state unemployment and withholding returns. Form 944 only consolidates the federal income/FICA quarterly reporting.

What it does not cover

Form 944, Employer's Annual Federal Tax Return does not stand alone — it lives inside a small ecosystem of supporting forms, schedules, and elections that together carry the full weight of a small-business return. Knowing what Form 944, Employer's Annual Federal Tax Return does not handle is just as important as knowing what it does. The instructions list the cross-references explicitly: items computed elsewhere (Schedule C net profit, Schedule SE self-employment tax, Form 4562 depreciation), items reported on a separate form (Form 8829 home office, Form 1099-NEC information returns), and items handled by an entirely different return entirely (Form 1120-S for S-corps, Form 1065 for partnerships). Drawing the boundary cleanly avoids double-counting and avoids leaving deductions on the table.