What IRS Form 944 (2016) Is For

Form 944 is the Employer's Annual Federal Tax Return designed specifically for the smallest employers whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less (IRS Instructions for Form 944 (2016)). Only employers who received written notification from the IRS to file Form 944 are eligible to use this form instead of quarterly Forms 941, and it allows these small businesses to file and pay employment taxes once per year rather than quarterly.

When You'd Use Form 944 for 2016 (Late or Amended Filing)

You would file a late or amended Form 944 for 2016 if you received IRS notices about unfiled employment tax returns, discovered errors on a previously filed return, or have an outstanding balance due from that tax year. Late filers typically face this situation after receiving CP notices or balance due statements from the IRS. For amended returns, you must use Form 944-X if you need to correct errors on a previously filed Form 944, which can be filed within 3 years of the original filing date or 2 years from when you paid the tax, whichever is later (IRS Instructions for Form 944-X). Note that any refund from an amended return is generally limited to returns filed within three years of the original due date.

Key Rules Specific to 2016

For 2016, the social security tax rate remained 6.2% each for employer and employee with a wage base limit of $118,500, unchanged from 2015 (IRS Instructions for Form 944 (2016)). The Medicare tax rate was 1.45% each for employer and employee with no wage base limit, plus the Additional Medicare Tax of 0.9% on employee wages exceeding $200,000 annually. Form 944 for 2016 was originally due January 31, 2017, or February 10, 2017, if all required deposits were made timely and in full. The $2,500 annual liability threshold for Form 944 eligibility remained separate from the $2,500 quarterly threshold that triggers mandatory electronic deposit requirements.

Step-by-Step (High Level)

• Gather wage and tax transcripts from the IRS to verify previously reported amounts and identify any discrepancies or missing periods
  
  
• Complete the correct 2016 Form 944 using the specific year's form and instructions, ensuring all wage, tip, and tax information is accurate and matches supporting documentation
  
  
• Attach required schedules such as Form 945-A if you were a semiweekly depositor, and prepare Form 944-X separately if correcting a previously filed return
  
  
• Choose proper submission method - mail paper returns to the correct IRS processing center based on your location, or file electronically if available for the 2016 tax year
  
  
• Keep complete copies of all forms, supporting documentation, and proof of mailing or electronic submission for your records
  
  

Common Mistakes and How to Avoid Them

• Filing without IRS notification - Only file Form 944 if the IRS specifically notified you in writing to use this form instead of quarterly Forms 941
  
  
• Using incorrect EIN or formatting - Always use your exact assigned EIN, never your SSN, and avoid entering dollar signs or decimal points in amount fields (IRS Instructions for Form 944 (2016))
  
  
• Ignoring deposit requirements - If your annual liability exceeds $2,500, you must make electronic deposits via EFTPS rather than paying with your return
  
  
• Incomplete reconciliation - Ensure amounts on Form 944 match your Forms W-2 and W-3 to avoid IRS correspondence and potential adjustments
  
  
• Missing signatures or pages - Submit both pages of Form 944 with required signatures, and have paid preparers sign if applicable
  
  
• Assuming payroll service compliance - You remain ultimately responsible for accurate filing and deposits even when using third-party payroll providers
  
  

What Happens After You File

The IRS processes Form 944 returns, though late-filed returns may take longer due to additional verification requirements. If you owe money, expect notices regarding payment options including installment agreements using Form 9465 for amounts you cannot pay immediately (IRS.gov). The IRS may send correspondence if there are discrepancies between your Form 944 and related wage statements, requiring written responses within specified timeframes. Interest and penalties continue to accrue on unpaid balances at rates set by federal law, but you have appeal rights if you disagree with proposed assessments. Processing of amended returns using Form 944-X generally takes additional time, and refunds from corrections are issued if no other issues exist.

FAQs

Can I still file Form 944 for 2016 even though it's years late?

Yes, but you'll owe failure-to-file and failure-to-pay penalties plus interest. File as soon as possible to minimize additional penalties.

What penalties apply to late-filed Form 944 returns?

Penalties and interest are charged on taxes paid late and returns filed late at rates set by federal law (IRS Instructions for Form 944 (2016)). Trust fund recovery penalties may equal 100% of unpaid employment taxes.

Do I need wage transcripts before filing a late Form 944?

While not required, obtaining transcripts from the IRS helps ensure accuracy and identify any previously filed returns or payments the IRS has on record.

How long do I have to claim a refund from an amended 2016 Form 944?

Generally, you must file Form 944-X within 3 years of the original due date to claim refunds, though this deadline may have already passed for 2016.

Should I also amend my state employment tax returns?

State requirements vary, but most states require amended returns when you correct federal employment tax filings. Check with your state tax authority for specific deadlines and procedures.

Can I set up a payment plan for employment tax debt?

Yes, use Form 9465 to request an installment agreement (IRS.gov). Employment taxes may require different payment terms than income taxes.

What if I never received the original IRS notification to file Form 944?

Contact the IRS at 1-800-829-4933 to verify your filing requirement, as you cannot file Form 944 without proper notification unless you specifically requested this filing option (IRS Instructions for Form 944 (2016)).

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