Form 941 vs. 944- Which One Should You File, an Annual or Quarterly Form?

When comparing Form 941 vs. 944, businesses with higher tax liabilities file Form 941 quarterly, while those with lower annual liabilities file Form 944 annually.

Usually, employers fill out Form 941 every quarter. However, if a small employer’s total tax responsibility for the year is less than $2,500, they get to file Form 944 just once a year, instead of the usual quarterly hustle with Form 941. 

Employers, when it comes to managing payroll taxes—the ones taken from your employees’ pay and contributions—the IRS wants you to deposit and report them using either Form 944 or Form 941. However, understanding the distinction between Forms 944 and 941 is crucial. 

As an employer, your payroll responsibilities encompass federal tax obligations, including: 

• Withholding federal income tax 
• Withholding and contributing to Social Security tax 
• Withholding and contributing to Medicare tax 
• Contributing to federal unemployment tax 

It’s important to note that depending on your location, you may be responsible for additional state and local taxes (e.g., state and local income taxes). 

After withholding and contributing federal taxes, the crucial next step is to report them to the IRS. Utilize Form 940, known as the ‘Employer’s Annual Federal Unemployment (FUTA) Tax Return,’ to report federal unemployment tax. For federal income, Social Security, and Medicare taxes, the appropriate forms for reporting are either Form 944 or Form 941. 

What is Form 944, Employer’s Annual Federal Tax Return? 

Form 944 simplifies tax tasks for the smaller employers. If your combined yearly tax for Social Security, Medicare, and withheld federal income taxes is $2,500 or less, you can file and manage these taxes annually instead of quarterly. It’s like a streamlined approach for the less complex tax scenario. 

What is Form 941, Employer’s Quarterly Federal Tax Return 

The IRS Form 941 is a quarterly tax return for employers. Employers use Tax Form 941 to record the federal income tax, social security tax, and Medicare tax deducted from each employee’s wage (FICA taxes). This form is also used to determine the employer’s Social Security, Medicare, and other withholding taxes. 

Employers or business owners responsible for employee wages must submit IRS Tax Form 941 on a quarterly basis. However, there are a few exemptions, including seasonal business employers, household employers, and employers of farm workers.

Choosing the Right Form for Your Business 

When evaluating Form 941 vs. 944, employers with substantial payroll tax obligations must file Form 941 every quarter, whereas those with minimal annual tax liabilities can opt for Form 944 once a year. Let’s consider the following factors-

Factors to Consider:

• Annual Employment Tax Liability: 

If your estimated annual employment tax liability is $2,500 or less, you may be eligible to file Form 944 annually. 

• Notification from the IRS: 

The IRS will notify eligible employers to file Form 944 annually if they meet the criteria. 

• Obligatory Quarterly Filing: 

If you do not meet the eligibility criteria for Form 944, you are required to file Form 941 quarterly. 

E-file Form 941 and Form 944 with Tax1099 

Effortlessly e-file Form 941 and Form 944 using Tax1099 within just a few minutes. Our platform ensures automatic tax calculations, and error checks based on IRS Business Rules, built-in worksheets, and 941 Schedule B for precise filing. 

FAQs About Form 941 and Form 944

1. Form 941: what is it and who files it?

Form 941 is the quarterly payroll tax return most employers file. It reports federal income tax withheld and both the employee and employer shares of Social Security and Medicare (FICA).

Who files? Almost every employer with employees. You file each quarter: Q1 due April 30, 2026; Q2 due July 31, 2026; Q3 due October 31, 2026; Q4 due February 2, 2027. If you made all required deposits on time and in full, you may file by the 10th day of the next month (May 10, August 10, November 10, February 10).

What you do: If you pay wages subject to income tax withholding or FICA, you (the payer) will have to file 941 unless the IRS specifically tells you to use another form (e.g., 944).

2. Form 944: what’s it for and who qualifies?

Form 944 is for very small employers whose total annual employment tax liability is $1,000 or less. It lets those employers file once per year instead of quarterly.

You don’t choose 944 on your own. The IRS must notify you in writing that you are eligible (or approve your request).

If the IRS hasn’t told you to use 944, you should keep filing 941 each quarter.

Heads-up: The $2,500 figure you might see elsewhere relates to deposit rules for Form 941 (if your quarterly liability is under $2,500, you may be allowed to pay with the return). It’s not the eligibility threshold for Form 944.

What you do: If you think you qualify, you can ask the IRS for 944 filing before April 1 of the year you want to switch—but wait for written approval before you stop filing 941.

3. As an employer, what taxes am I responsible for?

You are responsible for:

• Withholding federal income tax from employee pay,
• Withholding employee FICA and paying your matching FICA (Social Security + Medicare),
• Paying FUTA (federal unemployment) on Form 940 annually,
• Meeting state and local payroll tax rules (income tax withholding, state unemployment, local taxes where applicable). What you do: Set up payroll correctly, deposit on time (usually via EFTPS), and file the right returns (941 quarterly or 944 annually if authorized; 940 annually).

4. How will the IRS tell me which form to file?

The IRS mails a notice if it wants you to file Form 944. If you don’t receive that notice (or an approval to switch), you file Form 941 each quarter. Seasonal, household, and agricultural employers may have different rules (e.g., Schedule H, Form 943).

What you do: Follow the most recent IRS notice you have received. When in doubt, file 941 and call the IRS or your payroll provider to confirm.

5. Can I e-file these forms?

Yes. Platforms like Tax1099 support e-filing for Form 941 and Form 944. E-filing can:

• Do calculations automatically,
• Run basic error checks,
• Produce confirmations you can save for your records.

What you do: If you e-file, keep your deposit history and payroll reports handy so totals reconcile.

6. What happens if I don’t file or pay on time?

Penalties and interest add up quickly for late filing, late payment, or missing deposits. The IRS can also assess penalties for inaccurate returns.

What you do:

• File the return as soon as possible (even if you can’t pay everything today).
• Pay what you can now to cut interest and penalties.
• Consider a payment plan with the IRS if needed.
• Fix process gaps (calendar reminders, deposit schedules, and payroll controls) so it doesn’t happen again.

Choose the correct form based on tax liability to adhere to IRS regulations and reduce penalty risks.

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