Form 941 or 944: Which Federal Form Should You Use?

Taxes are a universal aspect that no business can avoid. When it comes to the USA different, the number of taxes based on the eligibility can easily confuse entities. And Federal Income Tax Return is one of the mandatory forms issued by the IRS for businesses in the USA. This includes Form 941 and Form 944 as well.

Even though both the forms fulfill similar purpose, there are many differences in the two. An employer must be aware of these distinctions in order to file the appropriate form. However, before getting to the changes, let us first understand the forms separately to have a clear idea.


What is Form 941?

Form 941, also known as Employer’s Quarterly Tax Form, is essential for filing taxes such as Federal Income Tax, Social Security Tax, and Medicare Tax. Most US employers are required to file quarterly federal tax returns, unlike individuals who file taxes on a yearly basis. Businesses with higher tax liabilities are used to file this form. 


What is Form 944?

Form 944, on the other hand, is designed for small employers who have fewer employees and lesser annual tax liability. It is also used to report taxes such as Social Security Tax, Medicare Tax, and Federal Income Taxes. Because the amount is lower, it is filed once a year.


Differences between Form 941 and Form 944

Form 941 and Form 944 report employment taxes as well as FICA taxes (mentioned above); however, the size of the business plays a significant role in choosing one. The differences between the forms can be highlighted on several bases. A few have been listed below so that, by the end of this blog, you will be able to identify which form should you file.


Eligibility Criteria

Form 941 is responsible to report employment taxes if liability is $1,000 or more for any given quarter it is reporting. Whereas, Form 944 helps the businesses report taxes with a tax liability of $1,000 or less throughout the year. Thus, the firms having lower amount to pay can choose the annual method of Federal Tax Returns Filing than filing Form 941 for every quarter.


Necessity to Report

Form-941 is proven to be useful for small employers having minimal tax liability. In the quarters in which the employer is having no tax liability, they are not required to file the form. The IRS notifies that if the final return has also not been filed by the business, it must file a Form 941 each quarter even if the payment of the wages is not made by the employer during the quarter. It also notifies about the approval to file Form-944.

One can choose to file Form 941 instead of Form 944; however, an approval from IRS is required.


Reporting Deadline

The usual due date to file Form-941 is 30 days following the end of each quarter of the year. These are April 30, July 31, October 31, and January 31. And last date to file Form-944 is January 31st of every year.

If required, an extension of the due date is possible till February 10, 2023, which is for this year. That too if you have made deposits on time with full payment of the taxes due for the year.

NOTE: If the last date falls on any federal holiday then the next business day would be considered as due date. The IRS will recognize a filed Form if mailed and postmarked by the U.S. Postal Service on or prior to the due date. Businesses can also follow the electronic means to file employment taxes and pay through the Electronic Federal Tax Payment System (EFTPS).  



If someone fails to file the returns, the penalties for both the forms remain the same.

   The penalty can range anywhere between 5% of the tax owed for each month the return is late, which caps at 25%.

   When you pay the tax late or don’t pay the full amount, you will be charged 2% to 15% of the unpaid tax which is determined by the number of days the amount remains unpaid.


It’s important for employers to determine their eligibility and filing requirements based on the payment that they make to their employees. You must go through the official IRS guidelines or seek professional advice. This can prove to be essential for complying with tax obligations. Remember, any mistakes can lead to late submits, eventually costing pocket-wrecking penalties.

If you fit in the criteria to file Form 941, check out Form 941: Essential Tax Filing for US Federal Taxpayers.


Written by – Priyanka Rampal


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