The IRS announced a new Form 944 election process to help reduce the burden of tax filing for small businesses. Form 944 is an employment tax return used to report social security, Medicare, and federal withholding taxes. It is the annual equivalent of Form 941, which is filed quarterly.
Previously, the IRS would notify employers if they were eligible to file Form 944 instead of Form 941. To be eligible, employers had to report less than $1,000 in total tax liability for the first two quarters of the previous year and the last two quarters of the year before that. For example, to be eligible to file Form 944 for 2018, an employer would need to report less than $1,000 total liability for quarter 3 and 4 of 2017 and quarter 1 and 2 of 2016.
Employers who believe their employment taxes for the current calendar year will be less than $1,000 can now request to file Form 944 for the current year. The request can be made by calling the IRS at 1-800-829-4933 by April 1st or by sending a written request, postmarked by March 15th. Filing addresses can be found on the IRS' website.
Employers who receive a notice from the IRS indicating they are a Form 944 filer must file Form 944 rather than Form 941. New employers who have completed their Form SS-4 to obtain an Employer Identification Number will receive a confirmation letter listing the forms they are required to file. If the notice does not specify Form 941 or Form 944, the employer can submit a request to file Form 944 if they believe their tax liability will be less than $1,000.