Form 944 is the Employer's Annual Federal Tax Return. The smallest employers, those whose yearly liability for Social Security, Medicare and withheld federal income tax is $1,000 or less, use it to report and pay those taxes once a year in place of four quarterly Forms 941. You can file it only after the IRS notifies you in writing that Form 944 is your filing requirement.
The 2026 Form 944 is normally due January 31, 2027. That date falls on a Sunday, so under the weekend rule the deadline moves to Monday, February 1, 2027.
The Instructions for Form 944 describe the form's purpose plainly: it "is designed so the smallest employers (those whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less) will file and pay these taxes only once a year instead of every quarter."
Two conditions decide eligibility. The first is the size of the liability. The IRS gives a rule of thumb: "if you pay $5,000 or less in wages subject to social security and Medicare taxes and federal income tax withholding during the calendar year, you're generally likely to pay $1,000 or less in employment taxes." At the combined 15.3% Social Security and Medicare rate, $5,000 of wages produces $765 of FICA tax, which leaves room for a small amount of income tax withholding under the $1,000 line.
The second condition is the IRS notice. The instructions say: "If the IRS didn't notify you to file Form 944, don't file Form 944."
The instructions list employers who can't file Form 944, whatever their size:
Once the notice is in place, the 2025 instructions are firm: "If the IRS notified you in writing to file Form 944, you must file Form 944 (and not quarterly Forms 941) even if your tax liability for 2025 exceeds $1,000." The 2026 Publication 15 adds that you must file it "even if you have no taxes to report" unless you filed a final return for the prior year.
A new business can choose Form 944 on the EIN application. The Instructions for Form SS-4 cover this at line 14: "If you expect your employment tax liability to be $1,000 or less in a full calendar year, you're eligible to file Form 944 annually (once each year) instead of filing Form 941 quarterly." They also warn that once you check the box, "you must continue to file Form 944, regardless of the amount of tax shown on your return, until the IRS instructs you to file Form 941."
Employers already filing Form 941 must contact the IRS during the first calendar quarter of the year they want to switch. For calendar year 2026, the 2025 Form 944 instructions set the window as a phone call to 800-829-4933 between January 1 and April 1, 2026, or a written request postmarked between January 1 and March 16, 2026. The IRS then sends a written notice. If none arrives, you keep filing quarterly Forms 941.
The same window and contact methods apply in reverse. A growing employer can request Forms 941, and the change takes effect only once the IRS confirms it in writing. For 2027, plan on a similar first-quarter window and check the exact dates in the 2026 instructions when the IRS releases them.
Form 944 is due on the last day of the first calendar month after the year ends. The Publication 509 tax calendar says this, and it adds that if you deposit in full on time, "you may file the return by the 10th day of the 2nd month that follows the end of the return period." Pub. 15 moves any due date that falls on a Saturday, Sunday or legal holiday to the next business day.
| Tax year | Standard due date | Due date if all deposits were made on time |
|---|---|---|
| 2025 | Monday, February 2, 2026 | Tuesday, February 10, 2026 |
| 2026 | Monday, February 1, 2027 | Wednesday, February 10, 2027 |
The 2025 dates come straight from the 2025 instructions. The IRS has not yet released 2026 instructions, so the 2026 dates are derived: the last day of January 2027 is Sunday, January 31, and the weekend rule moves the deadline to Monday, February 1. February 10, 2027 is a Wednesday, so the later date needs no adjustment. A paper return counts as filed on time if it is postmarked by the USPS, or sent by an IRS-designated private delivery service, on or before the due date. Our small business tax compliance calendar places this date next to the other January filings, such as Forms W-2 and the annual FUTA return covered in our guide to Form 940.
The deposit test runs on line 9 of Form 944, total taxes after adjustments and nonrefundable credits, and it uses a different number from the eligibility test. The instructions stress that "The $2,500 threshold at which federal tax deposits must be made is different from the amount of annual tax liability ($1,000 or less) that makes an employer eligible to file Form 944."
| Your 2026 liability | What you must do |
|---|---|
| Less than $2,500 for the year | No deposits required. Pay the tax with a timely filed Form 944. |
| $2,500 or more for the year, but less than $2,500 for the quarter | Deposit by the last day of the month after the quarter ends. Fourth-quarter tax under $2,500 can be paid with the return. |
| $2,500 or more for the quarter | Deposit monthly or semiweekly under your deposit schedule. |
| $100,000 or more on any day | Deposit by the next business day. |
Most Form 944 filers are monthly schedule depositors. Pub. 15 sets the 2026 lookback period for Form 944 filers as calendar year 2024: $50,000 or less of tax in that year makes you a monthly depositor, who deposits each month's taxes by the 15th of the next month. Pub. 15 also says new Form 944 filers are monthly depositors "for the first and second calendar years of your business."
All deposits go by electronic funds transfer through EFTPS or your IRS business tax account.
If your line 9 total is $2,500 or more, Part 2 changes. Monthly depositors enter each month's liability on lines 13a to 13l, and the total on line 13m must equal line 9. Semiweekly depositors attach Form 945-A instead. Skipping this step lets the IRS assess an "averaged" failure-to-deposit penalty, which Pub. 15 puts at 2% to 10%.
Both employers below received IRS notice to file Form 944 for 2026. Rates come from Pub. 15 for 2026: 6.2% each for employer and employee Social Security and 1.45% each for Medicare.
Employer A pays one part-time employee $4,800 during the year and withholds $180 of federal income tax.
| Item | Amount |
|---|---|
| Social Security tax ($4,800 × 12.4%) | $595.20 |
| Medicare tax ($4,800 × 2.9%) | $139.20 |
| Federal income tax withheld | $180.00 |
| Total tax (line 9) | $914.40 |
The total is under $1,000, which fits the Form 944 profile, and under $2,500, so no deposits are needed. Employer A pays $914.40 with the return by February 1, 2027.
Employer B starts the year small and grows. Wages total $30,000, with federal income tax withheld at 8% of wages, so the combined rate is 23.3% of wages each quarter.
| Quarter | Wages | Income tax withheld | Social Security (12.4%) | Medicare (2.9%) | Liability |
|---|---|---|---|---|---|
| Q1 | $4,000 | $320 | $496 | $116 | $932 |
| Q2 | $6,000 | $480 | $744 | $174 | $1,398 |
| Q3 | $8,000 | $640 | $992 | $232 | $1,864 |
| Q4 | $12,000 | $960 | $1,488 | $348 | $2,796 |
| Total | $30,000 | $2,400 | $3,720 | $870 | $6,990 |
The year's total of $6,990 is well above $2,500, so Employer B must deposit. Q1 to Q3 are each under $2,500, so those taxes are due by April 30, July 31 and October 31. October 31, 2026 is a Saturday, so the third-quarter deposit is on time if made Monday, November 2. Q4 reaches $2,500, so those liabilities follow the monthly schedule. With $4,000 of wages paid in each of October, November and December, each month's $932 is due November 16 (November 15 is a Sunday), December 15 and January 15, 2027. Employer B still files Form 944 for 2026, completes lines 13a to 13l, and can file as late as February 10, 2027 if every deposit was timely.
Pub. 15 sets the 2026 Social Security wage base at $184,500, up from $176,100 for 2025. Stop withholding and paying Social Security tax on an employee's wages once they reach that amount. Medicare has no wage base, and Additional Medicare Tax of 0.9% must be withheld on wages paid to an employee above $200,000 in the year.
Other current points from the instructions and Pub. 15:
| Line | What it reports |
|---|---|
| 1 | Wages, tips and other compensation, matching Form W-2 box 1 |
| 2 | Federal income tax withheld |
| 3 | Checkbox if no wages are subject to Social Security or Medicare tax |
| 4a to 4e | Taxable Social Security wages and tips, Medicare wages and tips, Additional Medicare Tax wages, and the total tax on them |
| 5 | Total taxes before adjustments (line 2 plus line 4e) |
| 6 | Current-year adjustments for fractions of cents, third-party sick pay, tips and group-term life insurance |
| 7 | Total taxes after adjustments |
| 8 | Qualified small business payroll tax credit for increasing research activities, from Form 8974 |
| 9 | Total taxes after adjustments and nonrefundable credits |
| 10 | Total deposits for the year |
| 11 | Balance due |
| 12a to 12e | Overpayment, refund or credit choice, and direct deposit details |
| 13 | Deposit schedule and monthly tax liability |
| 14 | Final return checkbox and last date wages were paid |
The research credit on line 8 applies to startups that elect to use part of their research credit against payroll tax; our guide on how small businesses can maximize R&D tax credits explains the election.
Both forms report the same taxes on a different schedule.
| Feature | Form 944 | Form 941 |
|---|---|---|
| Filing frequency | Once a year | Every quarter |
| Who files | Employers notified by the IRS, usually with $1,000 or less of annual liability | All other employers paying wages, unless an exception applies |
| Pay with return instead of depositing | Annual liability under $2,500 | Quarterly liability under $2,500 for the current or prior quarter |
| Deposit lookback period for 2026 | Calendar year 2024 | July 1, 2024 to June 30, 2025 |
| Semiweekly liability record | Form 945-A | Schedule B (Form 941) |
| Correction form | Form 944-X | Form 941-X |
| 2026 return due | February 1, 2027 | Four dates, the last on February 1, 2027 |
For the quarterly side, including Schedule B and 941-X corrections, see our Form 941 line-by-line guide. Pub. 15 includes a transition rule for employers moving from Form 944 to Form 941: the failure-to-deposit penalty won't apply to January taxes deposited late if they are deposited in full by March 15.
The IRS page on the failure to file penalty states that the penalty "is 5% of the tax due (less any tax paid on time and available credits) for each month or partial month the return is late," up to a maximum of 25%. A separate failure-to-pay penalty applies to unpaid balances.
Late deposits carry their own scale under Pub. 15: 2% for deposits 1 to 5 days late, 5% for 6 to 15 days late, and 10% for 16 or more days late. Paying directly to the IRS when a deposit was required also draws 10%, and amounts still unpaid more than 10 days after the first IRS notice reach 15%.
Withheld income tax and the employee share of FICA are trust fund taxes. If they go unpaid, the IRS can assess the trust fund recovery penalty, equal to 100% of the unpaid amount, against responsible people who acted willfully, as our guide to the trust fund recovery penalty explains. Penalty relief requests go on Form 843, covered in our guide to requesting penalty abatement on Form 843.
Using a payroll service does not move the legal duty. The instructions state that you remain responsible "even if you contract with a third party to perform these acts." That point matters when you weigh the reasons to outsource payroll and when you follow our guide on how to choose a payroll provider for clients who file Form 944.
Can I file Form 944 without an IRS notice? No. Without a written IRS notice, you file quarterly Forms 941. New employers can request it on Form SS-4, and existing employers can request it during the first quarter of the year.
What happens if my Form 944 liability goes over $1,000? You still file Form 944 for that year. If the total reaches $2,500, you must also make deposits during the year and report monthly liabilities on line 13. You can ask the IRS to move you to Form 941 for a later year.
When is the 2026 Form 944 due? Monday, February 1, 2027. The normal January 31 deadline falls on a Sunday in 2027, and the weekend rule moves it to the next business day. If you made all deposits on time and in full, you have until Wednesday, February 10, 2027.
How do I correct a filed Form 944? File Form 944-X separately from your next annual return. It cannot be e-filed at this time, so it goes by mail.
Madras Accountancy supports CPA firms and small businesses with payroll tax reporting, including Form 944 and Form 941 preparation, deposit tracking and year-end reconciliation with Forms W-2 and W-3. To talk through your payroll filings, contact our team.
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