Form 944 (2015) Checklist: Annual Federal Tax Return
Form 944 reports annual federal employment tax liability, including income tax withholding, Social Security, and Medicare taxes. This form is exclusively for employers who have received written notification from the IRS to file their Form 941s on an annual basis instead of quarterly. For 2015, the Additional Medicare Tax withholding applies to wages exceeding $200,000 per employee during the calendar year, and the $2,500 deposit-with-return threshold remains unchanged from prior years.
Filing Steps
1. Confirm IRS Written Notification
Verify that you received a written IRS notice directing you to file Form 944 instead of quarterly Form 941s. Only employers with this specific notification may file Form 944 for the 2015 tax year. If you have not received written notification, you must continue filing quarterly Form 941, 941-SS, or 941-PR. This form is designed for the smallest employers whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less.
2. Report Line 1: Wages, Tips, and Other Compensation
Enter the total 2015 wages, tips, and other compensation paid to all employees. This is the gross figure before any withholding or adjustments are made. Include all amounts that would appear in box 1 of your employees’ Forms W-2, including sick pay paid by a third party if you were given timely notice and the third party transferred tax liability to you.
3. Report Line 2: Federal Income Tax Withheld
Enter total federal income tax withheld from wages, tips, and other compensation during 2015 using the withholding methods and tables applicable to 2015. Do not include any income tax withheld by a third-party payer of sick pay, even if you reported these amounts on Forms W-2. You will reconcile this difference on Form W-3.
4. Determine Social Security and Medicare Tax Liability (Lines 4a–4d)
Calculate taxable Social Security wages at 12.4 percent (combining both the employer’s 6.2 percent share and the employee’s 6.2 percent share). The Social Security wage base limit for 2015 is $118,500 per employee. Stop paying Social Security tax on an employee’s wages once they reach this threshold.
Calculate taxable Medicare wages at 2.9 percent (combining both the employer’s 1.45 percent share and the employee’s 1.45 percent share). Unlike Social Security, there is no wage base limit for the Medicare tax.
For 2015, apply the Additional Medicare Tax rate of 0.9 percent to wages exceeding $200,000 per employee during the calendar year. This is an employee-only tax with no employer share. Begin withholding Additional Medicare Tax in the pay period when an employee’s wages first exceed $200,000 and continue withholding through the end of the calendar year.
5. Complete Part 2: Deposit Schedule and Tax Liability Details
Monthly Liability Reporting (Lines 13a–13l): If your total taxes on line 7 equal or exceed $2,500 for the year, you must provide details about your tax liability. Monthly schedule depositors should complete lines 13a through 13l, entering the tax liability for each month of 2015.
Form 945-A Requirement: If you are a semiweekly schedule depositor OR if you accumulated $100,000 or more in tax liability on any single day during a deposit period in 2015, you must complete and file Form 945-A (Annual Record of Federal Tax Liability) instead of completing lines 13a through 13m on Form 944. Semiweekly depositors should not complete the monthly liability boxes on Form 944; Form 945-A replaces these lines entirely. Failure to complete and submit Form 945-A when required may result in the IRS asserting deposit penalties.
6. Reconcile Total Deposits Against Tax Liability (Line 8)
Enter all employment tax deposits made during 2015, including any overpayments applied from prior-year returns. Also include overpayments applied from any filed Form 944-X, Form 944-X (PR), Form 944-X (SP), Form 941-X, or Form 941-X (PR). These adjusted return forms can feed overpayments into your current-year reconciliation, helping ensure accurate reporting of your total deposits for the year.
7. Calculate Balance Due or Overpayment (Lines 11–12)
If line 7 (total taxes after adjustments) exceeds line 8 (total deposits), a balance is due. Report this amount on line 11. Use Form 944-V (Payment Voucher) to remit payment with your return only if you qualify under the 2015 payment-with-return rules.
If line 8 exceeds line 7, you have an overpayment. Claim the overpayment on line 12 and elect either a refund or carryforward to apply the credit to your 2016 tax liability.
8. Complete Part 3: Business Closure Notification
If your business closed or ceased paying wages at any time during 2015, check the appropriate box on page 2 of Form 944 and enter the final date you paid wages. This notification alerts the IRS to your changed status and affects your future filing obligations. Attach a statement showing the name of the person keeping the payroll records and the address where those records will be kept.
9. Designate Third-Party Representative (Part 4)
You may optionally authorize an employee, paid preparer, or other representative to discuss the return with the IRS. Provide their name, phone number, and create a five-digit personal identification number (PIN) for verification purposes. This authorization allows the designated person to communicate with the IRS about Form 944 on your behalf.
10. Sign and Date Form 944 (Part 5)
The responsible party—typically the owner, officer, or partner with primary authority over the business—must sign under penalties of perjury. Print your name, title, and daytime phone number clearly. Both pages of Form 944 must be completed, and the form must be signed. The IRS will not process returns that are unsigned. If a paid preparer completed the return, they must also complete and sign the paid preparer section.
11. Prepare Form 944-V Payment Voucher (If Applicable)
Complete Form 944-V only if you qualify to pay with your return. You may pay with your return if your line 7 tax liability is less than $2,500 for the year, or if you meet specific quarterly deposit exceptions. If your liability is $2,500 or more and you don’t meet an exception, you must deposit taxes electronically and cannot use Form 944-V.
Do not staple the voucher to Form 944 or to your payment. Make your check or money order payable to “United States Treasury” and write your EIN, “Form 944,” and “2015” on the payment. Detach Form 944-V from the form before mailing.
12. Assemble and File
Mail Form 944 (both pages), Form 944-V (if you are making a payment), and your payment to the address shown in the 2015 Form 944 instructions. The mailing address depends on your location and whether you are including a payment. File Form 944 by February 1, 2016, or by February 10, 2016, if you made all deposits on time and in full payment of taxes due for the year.
Retain all payroll records supporting wages, withholding, and deposits for at least four years from the due date of the return or the date you filed it, whichever is later.
2015 Year-Specific Guidance
Additional Medicare Tax Withholding: For 2015, withhold Additional Medicare Tax at 0.9 percent on wages paid to an employee that exceed $200,000 in the calendar year. Line 4d requires entry of wages subject to this withholding and calculation at the 0.9 percent rate. This tax applies only to employees—there is no employer portion.
Monthly Liability or Form 945-A Requirement: Employers with a line 7 tax liability of $2,500 or more must provide detailed liability information. Monthly schedule depositors complete lines 13a through 13l showing the month-by-month 2015 liability. Semiweekly schedule depositors must file Form 945-A instead of completing lines 13a through 13m. If you accumulated $100,000 or more on any single day during 2015, you automatically become a next-day depositor for that liability and must also file Form 945-A with your Form 944.
$2,500 Threshold for Payment With Return: You may pay with Form 944 using Form 944-V only if line 7 is less than $2,500, or if you meet specific exceptions based on quarterly liability patterns. Payments not meeting these criteria must be deposited by electronic funds transfer (EFT) through the Electronic Federal Tax Payment System (EFTPS) and are not eligible for Form 944-V submission.
Overpayment Application: Line 8 instructs you to include overpayments from amended returns. For 2015, this includes credits from Forms 944-X, 944-X (PR), 944-X (SP), 941-X, and 941-X (PR) that you elected to apply to your current-year tax liability.
Annual Filer Eligibility Verification: Only employers with a written IRS notification may file Form 944. Quarterly filers not notified to convert must continue filing Form 941 each quarter. This form’s exclusivity to employers with an annual tax liability of $1,000 or less ensures that the smallest businesses benefit from simplified annual reporting rather than the burdens of quarterly filing.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
