2020
Instructions for Form 944
Employer's ANNUAL Federal Tax Return
Department of the Treasury
Internal Revenue Service
Section references are to the Internal Revenue Code
unless otherwise noted.
Future Developments
For the latest information about developments related to
Form 944 and its instructions, such as legislation enacted
after they were published, go to IRS.gov/Form944.
What's New
Changes to Form 944 for coronavirus (COVID-19) re-
lated employment tax credits and other tax relief.
The following significant changes have been made to
Form 944 to allow for the reporting of new employment tax
credits and other tax relief related to COVID-19.
• The new credit for qualified sick and family leave wages
is reported on line 8b and, if applicable, line 10d. The
employee share of social security tax on qualified sick and
family leave wages is reported on lines 4a(i) and 4a(ii).
Qualified sick and family leave wages aren’t subject to the
employer share of social security tax. Qualified sick and
family leave wages not included on lines 4a(i) and 4a(ii)
because the wages reported on that line are limited by the
social security wage base are included on line 4c.
Qualified health plan expenses allocable to qualified sick
and family leave wages are reported on lines 15 and 16.
See the instructions for line 8b for information about the
new credit for qualified sick and family leave wages.
• The new employee retention credit is reported on
line 8c and, if applicable, line 10e. Qualified wages
(excluding qualified health plan expenses) for the
employee retention credit are reported on line 17 (these
amounts should also be included as wages on lines 4a
and 4c, and, if applicable, line 4d). Qualified health plan
expenses allocable to the qualified wages for the
employee retention credit are reported on line 18. See the
instructions for line 8c for information about the new
employee retention credit.
• Employers, including government employers, can defer
the deposit of the employer share of social security tax
due on or after March 27, 2020, and before January 1,
2021, as well as payment due for the employer share of
social security tax for wages paid on or after March 27,
2020, and before January 1, 2021. The amount of deferral
is reported on line 10b. See the instructions for line 10b for
more information.
• Employers could defer the withholding and payment of
the employee share of social security tax on wages paid
on or after September 1, 2020, and before January 1,
2021, but only if the amount of wages for a biweekly pay
period were less than $4,000 (or an equivalent amount for
other pay periods). The amount of deferral is reported on
line 10c. See the instructions for line 10c for more
information.
• Employers that requested an advance of the sick and
family leave credit and/or the employee retention credit
would have filed Form 7200, Advance Payment of
Employer Credits Due to COVID-19. The amount of all
advances received from Forms 7200 filed for the year is
reported on line 10g. See the instructions for line 10g for
more information.
• The credit for qualified sick and family leave wages
(reported on lines 8b and 10d) and the employee retention
credit (reported on lines 8c and 10e) are figured on
Worksheet 1.
New filing addresses. The filing addresses have
changed for some employers. See Where Should You
File, later, before filing your return.
Social security and Medicare tax for 2020. The rate of
social security tax on taxable wages, except for qualified
sick leave wages and qualified family leave wages, is
6.2% (0.062) each for the employer and employee or
12.4% (0.124) for both. Qualified sick leave wages and
qualified family leave wages aren't subject to the employer
share of social security tax; therefore, the tax rate on
these wages is 6.2% (0.062). The social security wage
base limit is $137,700.
The Medicare tax rate is 1.45% (0.0145) each for the
employee and employer, unchanged from 2019. There is
no wage base limit for Medicare tax.
Social security and Medicare taxes apply to the wages
of household workers you pay $2,200 or more in cash
wages in 2020. Social security and Medicare taxes apply
to election workers who are paid $1,900 or more in cash
or an equivalent form of compensation in 2020.
Reminders
Qualified small business payroll tax credit for in-
creasing research activities. For tax years beginning
after 2015, a qualified small business may elect to claim
up to $250,000 of its credit for increasing research
activities as a payroll tax credit against the employer
share of social security tax. The payroll tax credit election
must be made on or before the due date of the originally
filed income tax return (including extensions). The portion
of the credit used against the employer share of social
security tax is allowed in the first calendar quarter
beginning after the date that the qualified small business
filed its income tax return. The first Form 944 that you
could claim this credit on was Form 944 filed for calendar
year 2017. The election and determination of the credit
amount that will be used against the employer share of
social security tax are made on Form 6765, Credit for
Increasing Research Activities. The amount from Form
6765, line 44, must then be reported on Form 8974,
Qualified Small Business Payroll Tax Credit for Increasing
Research Activities. Form 8974 is used to determine the
amount of the credit that can be used in the current year.
The amount from Form 8974, line 12, is reported on Form
Nov 20, 2020
Cat. No. 39820A
944, line 8a. If you’re claiming the research payroll tax
credit on your Form 944, you must attach Form 8974 to
Form 944. For more information about the payroll tax
credit, see Notice 2017-23, 2017-16 I.R.B. 1100, available
at IRS.gov/irb/2017-16_IRB#NOT-2017-23, and IRS.gov/
ResearchPayrollTC. Also see Adjusting tax liability for
nonrefundable credits claimed on lines 8a, 8b, and 8c,
later.
Work opportunity tax credit for qualified tax-exempt
organizations hiring qualified veterans. Qualified
tax-exempt organizations that hire eligible unemployed
veterans may be able to claim the work opportunity tax
credit against their payroll tax liability using Form 5884-C.
For more information, go to IRS.gov/WOTC.
Employers can request to file Forms 941, 941-SS, or
941-PR instead of Form 944. Employers required to file
Form 944, who want to file Forms 941, 941-SS, or 941-PR
instead, must contact the IRS to request to file quarterly
Forms 941, 941-SS, or 941-PR and opt out of filing Form
944. See What if You Want To File Forms 941, 941-SS, or
941-PR Instead of Form 944, later.
Correcting a previously filed Form 944. If you
discover an error on a previously filed Form 944, make the
correction using Form 944-X. Form 944-X is filed
separately from Form 944. For more information, see the
Instructions for Form 944-X, section 13 of Pub. 15, or go
to IRS.gov/CorrectingEmploymentTaxes.
Federal tax deposits must be made by electronic
funds transfer (EFT). You must use EFT to make all
federal tax deposits. Generally, an EFT is made using the
Electronic Federal Tax Payment System (EFTPS). If you
don't want to use EFTPS, you can arrange for your tax
professional, financial institution, payroll service, or other
trusted third party to make electronic deposits on your
behalf. Also, you may arrange for your financial institution
to initiate a same-day wire payment on your behalf.
EFTPS is a free service provided by the Department of the
Treasury. Services provided by your tax professional,
financial institution, payroll service, or other third party
may have a fee.
For more information on making federal tax deposits,
see section 11 of Pub. 15; section 8 of Pub. 80, Federal
Tax Guide for Employers in the U.S. Virgin Islands, Guam,
American Samoa, and the Commonwealth of the Northern
Mariana Islands; or section 11 of Pub. 179, Guía
Contributiva Federal para Patronos Puertorriqueños. To
get more information about EFTPS or to enroll in EFTPS,
go to EFTPS.gov or call one of the following numbers.
• 800-555-4477
• 800-733-4829 (TDD)
• 800-244-4829 (Spanish)
• 303-967-5916 if you're outside the United States (toll
call)
Additional information about EFTPS is also available in
Pub. 966 or Pub. 966 (SP).
For an EFTPS deposit to be on time, you must
submit the deposit by 8 p.m. Eastern time the day
before the date the deposit is due.
Same-day wire payment option. If you fail to submit a
deposit transaction on EFTPS by 8 p.m. Eastern time the
CAUTION
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day before the date a deposit is due, you can still make
your deposit on time by using the Federal Tax Collection
Service (FTCS) to make a same-day wire payment. To
use the same-day wire payment method, you will need to
make arrangements with your financial institution ahead of
time. Please check with your financial institution regarding
availability, deadlines, and costs. Your financial institution
may charge you a fee for payments made this way. To
learn more about the information you will need to give
your financial institution to make a same-day wire
payment, go to IRS.gov/SameDayWire.
Timeliness of federal tax deposits. If a deposit is
required to be made on a day that isn't a business day, the
deposit is considered timely if it is made by the close of
the next business day. A business day is any day other
than a Saturday, Sunday, or legal holiday. The term “legal
holiday” for deposit purposes includes only those legal
holidays in the District of Columbia. Legal holidays in the
District of Columbia are provided in Pub. 15, Pub. 80, and
Pub. 179.
Electronic filing and payment. Businesses can enjoy
the benefits of filing tax returns and paying their federal
taxes electronically. Whether you rely on a tax
professional or handle your own taxes, the IRS offers you
convenient programs to make filing and paying easier.
Spend less time worrying about taxes and more time
running your business. Use e-file and EFTPS to your
benefit.
• For e-file, go to IRS.gov/EmploymentEfile for more
information. A fee may be charged to file electronically.
• For EFTPS, go to EFTPS.gov or call EFTPS at one of
the numbers provided under Federal tax deposits must be
made by electronic funds transfer (EFT), earlier.
• For electronic filing of Forms W-2, Wage and Tax
Statement, go to SSA.gov/employer. You may be required
to file Forms W-2 electronically. For details, see the
General Instructions for Forms W-2 and W-3.
If you’re filing your tax return or paying your
federal taxes electronically, a valid employer
identification number (EIN) is required at the time
the return is filed or the payment is made. If a valid EIN
isn't provided, the return or payment won't be processed.
This may result in penalties. See Employer identification
number (EIN), later, for information about applying for an
EIN.
Electronic funds withdrawal (EFW). If you file Form
944 electronically, you can e-file and use EFW to pay the
balance due in a single step using tax preparation
software or through a tax professional. However, don't use
EFW to make federal tax deposits. For more information
on paying your taxes using EFW, go to IRS.gov/EFW.
Credit or debit card payments. You can pay the
balance due shown on Form 944 by credit or debit card.
Your payment will be processed by a payment processor
who will charge a processing fee. Don't use a credit or
debit card to make federal tax deposits. For more
information on paying your taxes with a credit or debit
card, go to IRS.gov/PayByCard.
Online payment agreement. You may be eligible to
apply for an installment agreement online if you can’t pay
the full amount of tax you owe when you file your return.
CAUTION
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Instructions for Form 944 (2020)
For more information, see What if you can't pay in full,
later.
Paid preparers. If you use a paid preparer to complete
Form 944, the paid preparer must complete and sign the
paid preparer's section of the form.
Outsourcing payroll duties. You’re responsible to
ensure that tax returns are filed and deposits and
payments are made, even if you contract with a third party
to perform these acts. You remain responsible if the third
party fails to perform any required action. Before you
choose to outsource any of your payroll and related tax
duties (that is, withholding, reporting, and paying over
social security, Medicare, FUTA, and income taxes) to a
third-party payer, such as a payroll service provider or
reporting agent, go to IRS.gov/OutsourcingPayrollDuties
for helpful information on this topic. For more information
on the different types of third-party payer arrangements,
see section 16 of Pub. 15.
Where can you get telephone help? For answers to
your questions about completing Form 944 or tax deposit
rules, call the IRS at one of the numbers listed below.
• 800-829-4933 (Business and Specialty Tax Line) or
800-829-4059 (TDD/TTY for persons who are deaf, hard
of hearing, or have a speech disability), Monday–Friday
from 7:00 a.m. to 7:00 p.m. local time (Alaska and Hawaii
follow Pacific time; employers in Puerto Rico receive
service from 8:00 a.m. to 8:00 p.m. local time).
• 267-941-1000 if you're outside the United States (toll
call), Monday–Friday from 6:00 a.m. to 11:00 p.m. Eastern
time.
Photographs of missing children. The IRS is a proud
partner with the National Center for Missing & Exploited
Children® (NCMEC). Photographs of missing children
selected by the Center may appear in instructions on
pages that would otherwise be blank. You can help bring
these children home by looking at the photographs and
calling 1-800-THE-LOST (1-800-843-5678) if you
recognize a child.
General Instructions
Purpose of Form 944
Form 944 is designed so the smallest employers (those
whose annual liability for social security, Medicare, and
withheld federal income taxes is $1,000 or less) will file
and pay these taxes only once a year instead of every
quarter. These instructions give you some background
information about Form 944. They tell you who must file
Form 944, how to complete it line by line, and when and
where to file it.
If you want more in-depth information about payroll tax
topics relating to Form 944, see Pub. 15, Pub. 80, Pub.
179, or go to IRS.gov/EmploymentTaxes.
Federal law requires you, as an employer, to withhold
certain taxes from your employees' pay. Each time you
pay wages, you must withhold—or take out of your
employees' pay—certain amounts for federal income tax,
social security tax, and Medicare tax. You must also
withhold Additional Medicare Tax from wages you pay to
an employee in excess of $200,000 in a calendar year.
Under the withholding system, taxes withheld from your
employees are credited to your employees in payment of
their tax liabilities.
References to federal income tax withholding
don't apply to employers in American Samoa,
Guam, the Commonwealth of the Northern
Mariana Islands, the U.S. Virgin Islands, and Puerto Rico,
unless you have employees who are subject to U.S.
income tax withholding.
Federal law also requires you to pay any liability for the
employer share of social security tax and Medicare tax.
This share of social security tax and Medicare tax isn't
withheld from employees.
For more information about annual employment tax
filing and tax deposit rules, see Treasury Decision 9566,
2012-8 I.R.B. 389, at IRS.gov/irb/2012-08_IRB#TD-9566.
Who Must File Form 944?
In general, if the IRS has notified you to file Form 944, you
must file Form 944 instead of Forms 941, 941-SS, or
941-PR to report the following amounts.
• Wages you have paid.
• Tips your employees reported to you.
• Federal income tax you withheld.
• Both the employer and the employee share of social
security and Medicare taxes.
• Additional Medicare Tax withheld from employees.
• Current year's adjustments to social security and
Medicare taxes for fractions of cents, sick pay, tips, and
group-term life insurance.
• Deferred amount of the employer share of social
security tax.
• Deferred amount of the employee share of social
security tax.
• Qualified small business payroll tax credit for increasing
research activities.
• Credit for qualified sick and family leave wages.
• Employee retention credit.
If you received notification to file Form 944, you must
file Form 944 to report your social security, Medicare, and
withheld federal income taxes for the 2020 calendar year
unless you called the IRS between January 1, 2020, and
April 1, 2020, or sent a written request postmarked
between January 1, 2020, and March 16, 2020, to request
to file Forms 941, 941-SS, or 941-PR quarterly instead
and received written confirmation that your filing
requirement was changed. You must file Form 944 even if
you have no taxes to report (or you have taxes in excess
of $1,000 to report) unless you filed a final return for the
prior year. See If Your Business Has Closed..., later. Also
see What if You Want To File Forms 941, 941-SS, or
941-PR Instead of Form 944, later.
If the IRS notified you in writing to file Form 944,
you must file Form 944 (and not Forms 941,
941-SS, or 941-PR) even if your tax liability for
2020 exceeds $1,000. Once your annual tax liability
exceeds $1,000, the IRS will notify you that you're no
longer eligible to file Form 944 in future years and that you
must file Form 941, 941-SS, or 941-PR quarterly.
However, until you receive the notice, continue to file
CAUTION
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CAUTION
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Instructions for Form 944 (2020)
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Form 944 annually. If you’re unsure of your current filing
requirement, call 800-829-4933. If you're outside the
United States, call 267-941-1000 (toll call).
What if You Want To File Form 944 in Future
Years Instead of Forms 941, 941-SS, or 941-PR?
If you haven't received notification to file Form 944 for
2021 but estimate your employment tax liability for
calendar year 2021 will be $1,000 or less and would like
to file Form 944 instead of Forms 941, 941-SS, or 941-PR,
you can contact the IRS to request to file Form 944 for
2021. To file Form 944 for calendar year 2021, you must
call the IRS at 800-829-4933 (267-941-1000 (toll call) if
you're outside the United States) between January 1,
2021, and April 1, 2021, or send a written request
postmarked between January 1, 2021, and March 15,
2021. The mailing addresses for written requests are
provided under What if You Want To File Forms 941,
941-SS, or 941-PR Instead of Form 944, later. The IRS
will send you a written notice that your filing requirement
has been changed to Form 944. If you don't receive this
notice, you must file Forms 941, 941-SS, or 941-PR for
calendar year 2021.
New Employers
New employers are also eligible to file Form 944 if they
will meet the eligibility requirements. New employers filing
Form SS-4, Application for Employer Identification
Number, or Form SS-4PR, Solicitud de Número de
Identificación Patronal (EIN), must complete line 13 of
Form SS-4 or SS-4PR, indicating the highest number of
employees expected in the next 12 months, and must
check the box on line 14 of Form SS-4 or SS-4PR to
indicate whether they expect to have $1,000 or less in
employment tax liability for the calendar year and would
like to file Form 944. Based on current tax rates, if you pay
$5,000 or less in wages subject to social security and
Medicare taxes and federal income tax withholding during
the calendar year, you’re generally likely to pay $1,000 or
less in employment taxes. Generally, if you’re an
employer in Puerto Rico, American Samoa, Guam, the
Commonwealth of the Northern Mariana Islands, or the
U.S. Virgin Islands and you pay $6,536 or less in wages
subject to social security and Medicare taxes during the
calendar year, you’re likely to pay $1,000 or less in
employment taxes. New employers are advised of their
employment tax filing requirement when they are issued
their EIN.
What if You Want To File Forms 941, 941-SS, or
941-PR Instead of Form 944?
You must file Form 944 if the IRS has notified you to do
so, unless the IRS notifies you to file quarterly Forms 941,
941-SS, or 941-PR instead, or you contact the IRS to
request to file those forms. To request to file quarterly
Forms 941, 941-SS, or 941-PR to report your social
security, Medicare, and withheld federal income taxes for
the 2021 calendar year, call the IRS at 800-829-4933
(267-941-1000 (toll call) if you're outside the United
States) between January 1, 2021, and April 1, 2021, or
send a written request postmarked between January 1,
2021, and March 15, 2021. Written requests should be
sent to:
Department of the Treasury
Department of the Treasury
Internal Revenue Service
or
Internal Revenue Service
Ogden, UT 84201-0038
Cincinnati, OH 45999-0038
If you would mail your return filed without a payment to
Ogden, as shown under Where Should You File, later,
send your request to the Ogden address shown above. If
you would mail your return filed without a payment to
Kansas City, send your request to the address for
Cincinnati shown above. After you contact the IRS, the
IRS will send you a written notice that your filing
requirement has been changed. If you don't receive this
notice, you must file Form 944 for calendar year 2021. For
more information about these procedures, see Rev. Proc.
2009-51, 2009-45 I.R.B. 625, available at IRS.gov/irb/
2009-45_IRB#RP-2009-51.
Who Can't File Form 944?
The following employers can't file Form 944.
• Employers who aren't notified. If the IRS doesn't
notify you to file Form 944, don't file Form 944. If you
would like to file Form 944 instead of Forms 941, 941-SS,
or 941-PR, see What if You Want To File Form 944 in
Future Years Instead of Forms 941, 941-SS, or 941-PR,
earlier.
• Household employers. If you employ only household
employees, don't file Form 944. For more information, see
Pub. 926 and Schedule H (Form 1040), or Pub. 179 and
Schedule H-PR.
• Agricultural employers. If you employ only
agricultural employees, don't file Form 944. For more
information, see Pub. 51 and Form 943, or Pub. 179 and
Form 943-PR.
What if You Reorganize or Close Your
Business?
If You Sell or Transfer Your Business...
If you sell or transfer your business during the year, you
and the new owner must each file a Form 944, 941,
941-SS, or 941-PR, whichever is required, for the year in
which the transfer occurred. Report only the wages you
paid.
When two businesses merge, the continuing firm must
file a return for the year in which the change took place
and the other firm should file a final return.
Changing from one form of business to another—such
as from a sole proprietorship to a partnership or
corporation—is considered a transfer. If a transfer occurs,
you may need a new EIN. See Pub. 1635 and section 1 of
Pub. 15 for more information.
Attach a statement to your return with all the following
information.
• The new owner's name (or the new name of the
business).
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Instructions for Form 944 (2020)
• Whether the business is now a sole proprietorship,
partnership, or corporation.
• The kind of change that occurred (a sale or transfer).
• The date of the change.
• The name of the person keeping the payroll records
and the address where those records will be kept.
If Your Business Has Closed...
If you permanently go out of business or stop paying
wages to your employees, you must file a final return. To
tell the IRS that Form 944 for a particular year is your final
return, check the box on line 14 and enter the final date
you paid wages. Also attach a statement to your return
showing the name of the person keeping the payroll
records and the address where those records will be kept.
If you participated in a statutory merger or
consolidation, or qualify for predecessor-successor status
due to an acquisition, you should generally file
Schedule D (Form 941), Report of Discrepancies Caused
by Acquisitions, Statutory Mergers, or Consolidations.
See the Instructions for Schedule D (Form 941) to
determine whether you should file Schedule D (Form 941)
and when you should file it.
When Must You File?
For 2020, file Form 944 by February 1, 2021. However, if
you made deposits on time in full payment of the taxes
due for the year, you may file the return by February 10,
2021.
File Form 944 only once for each calendar year. If you
filed Form 944 electronically, don't file a paper Form 944.
For more information about filing Form 944 electronically,
see Electronic filing and payment, earlier.
If we receive Form 944 after the due date, we will treat
Form 944 as filed on time if the envelope containing Form
944 is properly addressed, contains sufficient postage,
and is postmarked by the U.S. Postal Service on or before
the due date, or sent by an IRS-designated private
delivery service (PDS) on or before the due date. If you
don't follow these guidelines, we will generally consider
Form 944 filed when it is actually received. For more
information about PDSs, see Where Should You File,
later.
How Should You Complete Form 944?
Enter your EIN, name, and address in the spaces
provided. Also enter your name and EIN at the top of
pages 2 and 3. Don't use your social security number
(SSN) or individual taxpayer identification number (ITIN).
Generally, enter the business (legal) name that you used
when you applied for your EIN. For example, if you’re a
sole proprietor, enter “Tyler Smith” on the Name line and
“Tyler's Cycles” on the Trade name line. Leave the Trade
name line blank if it is the same as your Name line.
If you use a tax preparer to complete Form 944, make
sure the preparer uses your correct business name and
EIN.
Employer identification number (EIN). To make sure
that businesses comply with federal tax laws, the IRS
monitors tax filings and payments by using a numerical
system to identify taxpayers. A unique nine-digit EIN is
assigned to all corporations, partnerships, and some sole
proprietors. Businesses needing an EIN must apply for a
number and use it throughout the life of the business on all
tax returns, payments, and reports.
Your business should have only one EIN. If you have
more than one and aren't sure which one to use, write to
the IRS office where you file your returns (using the
Without a payment address under Where Should You
File, later) or call the IRS at 800-829-4933. If you're
outside the United States, call 267-941-1000 (toll call).
If you don't have an EIN, you may apply for one online
by visiting IRS.gov/EIN. You may also apply for an EIN by
faxing or mailing Form SS-4 or SS-4PR to the IRS. If the
principal business was created or organized outside of the
United States or U.S. territories, you may also apply for an
EIN by calling 267-941-1099 (toll call). If you have applied
for an EIN but don't have your EIN by the time a return is
due, file a paper return and write “Applied For” and the
date you applied in the space shown for the number.
If you’re filing your tax return electronically, a valid
EIN is required at the time the return is filed. If a
valid EIN isn't provided, the return won't be
accepted. This may result in penalties.
Always be sure the EIN on the form you file
exactly matches the EIN the IRS assigned to your
business. Don't use your SSN or ITIN on forms
that ask for an EIN. Filing a Form 944 with an incorrect
EIN or using another business's EIN may result in
penalties and delays in processing your return.
If you change your business name, business ad-
dress, or responsible party. Notify the IRS immediately
if you change your business name, business address, or
responsible party.
• Write to the IRS office where you file your returns (using
the Without a payment address under Where Should You
File, later) to notify the IRS of any business name change.
See Pub. 1635 to see if you need to apply for a new EIN.
• Complete and mail Form 8822-B to notify the IRS of a
business address or responsible party change. Don't mail
Form 8822-B with your Form 944. For a definition of
"responsible party," see the Instructions for Form SS-4.
Completing and Filing Form 944
Make entries on Form 944 as follows to enable accurate
processing.
• Use 12-point Courier font (if possible) for all entries if
you’re typing or using a computer to complete Form 944.
Portable Document Format (PDF) forms on IRS.gov have
fillable fields with acceptable font specifications.
• Don't enter dollar signs and decimal points. Commas
are optional. Report dollars to the left of the preprinted
decimal point and cents to the right of it. Don’t round
entries to whole dollars. Always show an amount for
cents, even if it is zero.
• Leave blank any data field with a value of zero (except
line 9).
• Enter negative amounts using a minus sign (if possible).
Otherwise, use parentheses.
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Instructions for Form 944 (2020)
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• Enter your name and EIN on all pages.
• Enter your name, EIN, “Form 944,” and tax period on all
attachments.
• Staple multiple sheets in the upper left corner when
filing.
Complete all three pages. You must complete all three
pages of Form 944 and sign on page 3. Failure to do so
may delay processing of your return.
Required Notice to Employees About the
Earned Income Credit (EIC)
To notify employees about the EIC, employers in the
United States must give the employees one of the
following items.
• Form W-2 which has the required information about the
EIC on the back of Copy B.
• A substitute Form W-2 with the same EIC information
on the back of the employee's copy that is on the back of
Copy B of the IRS Form W-2.
• Notice 797, Possible Federal Tax Refund Due to the
Earned Income Credit (EIC).
• Your written statement with the same wording as
Notice 797.
For more information, see section 10 of Pub. 15, Pub.
596, and IRS.gov/EIC.
Reconciling Form 944 and Form W-3, W-3SS, or
W-3PR
The IRS matches amounts reported on your Form 944
with Form W-2, W-2AS, W-2GU, W-2CM, W-2VI, or Form
499R-2/W-2PR amounts totaled on your Form W-3 or
W-3SS, Transmittal of Wage and Tax Statements, or
Form W-3PR, Informe de Comprobantes de Retención. If
the amounts don't agree, you may be contacted by the
IRS or the SSA. The following amounts are reconciled.
• Federal income tax withholding, if applicable.
• Social security wages.
• Social security tips.
• Medicare wages and tips.
For more information, see section 12 of Pub. 15.
Where Should You File?
You’re encouraged to file Form 944 electronically. Go to
IRS.gov/EmploymentEfile for more information on
electronic filing. If you file a paper return, where you file
depends on whether you include a payment with Form
944. Mail your return to the address listed for your location
in the table that follows.
PDSs can't deliver to P.O. boxes. You must use the
U.S. Postal Service to mail an item to a P.O. box address.
Go to IRS.gov/PDS for the current list of PDSs. For the
IRS mailing address to use if you’re using a PDS, go to
IRS.gov/PDSstreetAddresses. Select the mailing address
listed on the webpage that is in the same state as the
address to which you would mail returns filed without a
payment, as shown next.
Mailing Addresses for Form 944
If you’re in . . .
Without a payment . . .
With a payment . . .
Connecticut, Delaware, District of Columbia, Georgia, Illinois, Indiana,
Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire,
New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode
Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia,
Wisconsin
Department of the Treasury
Internal Revenue Service
Kansas City, MO 64999-0044
Internal Revenue Service
P.O. Box 806532
Cincinnati, OH 45280-6532
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida,
Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi,
Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota,
Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, Wyoming
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0044
Internal Revenue Service
P.O. Box 932100
Louisville, KY 40293-2100
No legal residence or principal place of business in any state
Internal Revenue Service
P.O. Box 409101
Ogden, UT 84409
Internal Revenue Service
P.O. Box 932100
Louisville, KY 40293-2100
Special filing address for exempt organizations; federal, state, and
local governmental entities; and Indian tribal governmental entities,
regardless of location
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0044
Internal Revenue Service
P.O. Box 932100
Louisville, KY 40293-2100
Your filing address may have changed from that
used to file your employment tax return in prior
years. Don't send Form 944 or any payments to
the Social Security Administration (SSA).
Must You Deposit Your Taxes?
If your liability for withheld federal income tax and social
security and Medicare taxes (Form 944, line 9) is less
than $2,500 for the year, you can pay the taxes with your
return. To avoid a penalty, you should pay in full and file
CAUTION
!
on time. You don't have to deposit the taxes. However,
you may choose to make deposits of these taxes even if
your liability is less than $2,500. If your liability for these
taxes is $2,500 or more, you’re generally required to
deposit the taxes instead of paying them when you file
Form 944. See the Federal Tax Deposit Requirements for
Form 944 Filers chart, later. If you don't deposit the taxes
when required, you may be subject to penalties and
interest.
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Instructions for Form 944 (2020)
The $2,500 threshold at which federal tax deposits
must be made is different from the amount of annual tax
liability ($1,000 or less) that makes an employer eligible to
file Form 944. Form 944 filers whose businesses grow
during the year may be required to make federal tax
deposits (see chart next), but they will still file Form 944
for the year.
Federal Tax Deposit Requirements for Form 944
Filers
If Your Tax Liability is:
Your Deposit Requirement is:
Less than $2,500 for the year
No deposit required. You may
pay the tax with your return. If
you’re unsure that your tax liability
for the year will be less than
$2,500, deposit under the rules
below.
$2,500 or more for the year, but
less than $2,500 for the quarter
You can deposit by the last day of
the month after the end of a
quarter. However, if your fourth
quarter tax liability is less than
$2,500, you may pay the fourth
quarter's tax liability with Form
944.
$2,500 or more for the quarter
You must deposit monthly or
semiweekly depending on your
deposit schedule. But, if you
accumulate $100,000 or more of
taxes on any day, you must
deposit the tax by the next
business day. See section 11 of
Pub. 15, section 8 of Pub. 80, or
section 11 of Pub. 179.
See section 11 of Pub. 15, section 8 of Pub. 80, or
section 11 of Pub. 179 for information about payments
made under the accuracy of deposits rule.
Note. When you make deposits depends on your deposit
schedule, which is either monthly or semiweekly,
depending on the amount of your tax liability during the
lookback period. The lookback period for Form 944 filers
is different from the lookback period for Form 941,
941-SS, and 941-PR filers, so your deposit schedule may
have changed. For more information, see section 11 of
Pub. 15, section 8 of Pub. 80, or section 11 of Pub. 179.
The $100,000 tax liability threshold requiring a next-day
deposit is determined before you consider any reduction
of your liability for nonrefundable credits. See
IRS.gov/ETD for more information.
Deferring your deposits. Employers can defer the
deposit of the employer share of social security tax due on
or after March 27, 2020, and before January 1, 2021, as
well as payment due for the employer share of social
security tax for wages paid on or after March 27, 2020,
and before January 1, 2021. The deferral applies before
any of the nonrefundable credits claimed on line 8a, 8b, or
8c. However, the deferral doesn't reduce the amount of
the employer share of social security tax used to figure
those nonrefundable credits. See the instructions for
line 10b for more information about the deferral of the
employer share of social security tax. Employers could
also defer the withholding and payment of the employee
share of social security tax on wages paid on or after
September 1, 2020, and on or before December 31, 2020,
but only if the amount of social security wages for a
biweekly pay period was less than $4,000 (or an
equivalent amount for other pay periods). The amount of
the employee deferral is reported on line 10c. See the
instructions for line 10c for more information.
Reducing your deposits for COVID-19 credits.
Employers eligible to claim the credit for qualified sick and
family leave wages and/or the employee retention credit
can reduce their deposits by the amount of their
anticipated credits. Employers won’t be subject to a
failure-to-deposit (FTD) penalty for reducing their deposits
if certain conditions are met. See the instructions for
line 8b and line 8c for more information on these credits.
This reduction in deposits is in addition to the ability
employers have to reduce their deposits by the amount of
the employer share of social security tax they defer. For
more information on reducing deposits, see Notice 2020-
22, 2020-17 I.R.B. 664, available at IRS.gov/irb/
2020-17_IRB#NOT-2020-22, and IRS.gov/ETD. Also see
IRS.gov/ERC and IRS.gov/PLC for more information,
including examples, about reducing deposits. See the
instructions for line 13, later, for instructions on how to
adjust your tax liabilities reported on line 13 or Form 945-A
for nonrefundable credits.
What About Penalties and Interest?
Avoiding Penalties and Interest
You can avoid paying penalties and interest if you do all of
the following.
• Deposit or pay your taxes when they are due, unless
you meet the requirements discussed in Notice 2020-22
or IRS.gov/ETD, or you have chosen to use the relief
provided in Notice 2020-65, 2020-38 I.R.B. 567, available
at IRS.gov/irb/2020-38_IRB#NOT-2020-65.
• File your fully completed Form 944 on time.
• Report your tax liability accurately.
• Submit valid checks for tax payments.
• Give accurate Forms W-2, W-2AS, W-2GU, W-2CM,
W-2VI, or Form 499R-2/W-2PR to employees.
• File Form W-3, W-3SS, or W-3PR and Copies A of
Forms W-2, W-2AS, W-2GU, W-2CM, W-2VI, or Form
499R-2/W-2PR with the SSA on time and accurately. Go
to SSA.gov/employer for information on how to file Forms
W-2 electronically.
Penalties and interest are charged on taxes paid late
and returns filed late at a rate set by law. See sections 11
and 12 of Pub. 15, section 8 of Pub. 80, or section 11 of
Pub. 179 for details. Use Form 843 to request abatement
of assessed penalties or interest. Don't request
abatement of assessed penalties or interest on Form 944,
944-X, 944-X (SP), 941-X, or 941-X (PR).
If you receive a notice about a penalty after you file
your return, reply to the notice with an explanation and we
will determine if you meet reasonable-cause criteria. Don't
include an explanation when you file your return.
If federal income, social security, and Medicare
taxes that must be withheld (that is, trust fund
taxes) aren't withheld or aren't deposited or paid
CAUTION
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Instructions for Form 944 (2020)
-7-
to the United States Treasury, the trust fund recovery
penalty may apply. The penalty is 100% of the unpaid
trust fund tax. If these unpaid taxes can't be immediately
collected from the employer or business, the trust fund
recovery penalty may be imposed on all persons who are
determined by the IRS to be responsible for collecting,
accounting for, or paying over these taxes, and who acted
willfully in not doing so. For more information, see section
11 of Pub. 15, section 8 of Pub. 80, or section 11 of Pub.
179. The trust fund recovery penalty won't apply to any
amount of trust fund taxes an employer holds back in
anticipation of any credits they are entitled to. It also won't
apply to applicable taxes properly deferred under Notice
2020-65 before May 1, 2021.
Specific Instructions
Part 1: Answer These Questions for
This Year
Employers in American Samoa, Guam, the
Commonwealth of the Northern Mariana Islands,
the U.S. Virgin Islands, and Puerto Rico may skip
lines 1 and 2, unless you have employees who are subject
to U.S. income tax withholding.
For purposes of these instructions, all references
to "sick pay" mean ordinary sick pay, not "qualified
sick leave wages" that are reported on line 4a(i).
1. Wages, Tips, and Other Compensation
Enter amounts on line 1 that would also be included in
box 1 of your employees' Forms W-2. See Box
1—Wages, tips, other compensation in the General
Instructions for Forms W-2 and W-3 for details. Include
sick pay paid by your agent. Also include sick pay paid by
a third party that isn't your agent (for example, an
insurance company) if you were given timely notice of the
payments and the third party transferred liability for the
employer's taxes to you.
If you're a third-party payer of sick pay and not an agent
of the employer, don't include sick pay that you paid to
policyholders' employees here if you gave the
policyholders timely notice of the payments. See section 6
of Pub. 15-A, Employer's Supplemental Tax Guide, for
more information about sick pay reporting and the
procedures for transferring the liability to the employer.
2. Federal Income Tax Withheld From Wages,
Tips, and Other Compensation
Enter the federal income tax that you withheld (or were
required to withhold) from your employees on this year's
wages, including qualified sick leave wages, qualified
family leave wages, and qualified wages (excluding
qualified health plan expenses) for the employee retention
credit; tips; taxable fringe benefits; and supplemental
unemployment compensation benefits. Don't include any
income tax withheld by a third-party payer of sick pay
even if you reported it on Forms W-2. You will reconcile
this difference on Form W-3. For information on the
employment tax treatment of fringe benefits, see Pub.
TIP
TIP
15-B, Employer's Tax Guide to Fringe Benefits. For
information about supplemental unemployment
compensation benefits, see section 5 of Pub. 15-A.
If you're a third-party payer of sick pay, enter the
federal income tax you withheld (or were required to
withhold) on third-party sick pay here.
References to federal income tax withholding
don't apply to employers in American Samoa,
Guam, the Commonwealth of the Northern
Mariana Islands, the U.S. Virgin Islands, and Puerto Rico,
unless you have employees who are subject to U.S.
income tax withholding.
3. If No Wages, Tips, and Other Compensation
Are Subject to Social Security or Medicare
Tax . . .
If no wages, tips, and other compensation on line 1 are
subject to social security or Medicare tax, check the box
on line 3 and go to line 5. If this question doesn't apply to
you, leave the box blank. For more information about
exempt wages, see section 15 of Pub. 15, section 12 of
Pub. 80, or section 15 of Pub. 179. For religious
exemptions, see section 4 of Pub. 15-A. For information
on the employment tax treatment of fringe benefits, see
Pub. 15-B.
4a–4e. Taxable Social Security and Medicare
Wages and Tips
Don't reduce your social security tax reported in
column 2 by the deferred amount of the employer
or employee share of social security tax reported
on line 10b or 10c.
4a. Taxable social security wages. Enter the total
wages, including qualified wages (other than qualified
health plan expenses) for the employee retention credit;
sick pay; and taxable fringe benefits subject to social
security taxes that you paid to your employees during the
year. Don't include the qualified sick leave wages reported
on line 4a(i) or qualified family leave wages reported on
line 4a(ii). For this purpose, sick pay includes payments
made by an insurance company to your employees for
which you received timely notice from the insurance
company. See section 6 of Pub. 15-A for more information
about sick pay reporting. See the instructions for line 6 for
an adjustment that you may need to make on Form 944
for sick pay.
Enter the amount before payroll deductions. Don't
include tips on this line. For information on types of wages
subject to social security taxes, see section 5 of Pub. 15,
section 4 of Pub. 80, or section 5 of Pub. 179.
For 2020, the rate of social security tax on taxable
wages, except for qualified sick leave wages and qualified
family leave wages, is 6.2% (0.062) each for the employer
and employee or 12.4% (0.124) for both. Stop paying
social security tax on and entering an employee's wages
on line 4a when the employee's taxable wages, including
qualified sick leave wages, qualified family leave wages,
and tips, reach $137,700 for the year. However, continue
to withhold income and Medicare taxes for the whole year
on all wages, including qualified sick leave wages,
CAUTION
!
CAUTION
!
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Instructions for Form 944 (2020)
qualified family leave wages, and tips, even when the
social security wage base of $137,700 has been reached.
line 4a (column 1)
x  0.124
line 4a (column 2)
4a(i). Qualified sick leave wages. Enter the qualified
taxable sick leave wages you paid to your employees
during the year. Qualified sick leave wages aren't subject
to the employer share of social security tax; therefore, the
tax rate on these wages is 6.2% (0.062). Stop paying
social security tax on and entering an employee's wages
on line 4a(i) when the employee's taxable wages,
including wages reported on line 4a, qualified sick leave
wages, qualified family leave wages, and tips, reach
$137,700 for the year. See the instructions for line 4c for
reporting Medicare tax on qualified sick leave wages,
including the portion above the social security wage base.
Qualified sick leave wages are wages for social
security and Medicare tax purposes required to be paid
under the Emergency Paid Sick Leave Act (EPSLA) as
enacted under the Families First Coronavirus Response
Act (FFCRA). See the instructions for line 8b for
information about the credit for qualified sick and family
leave wages.
line 4a(i) (column 1)
x    0.062
line 4a(i) (column 2)
Emergency Paid Sick Leave Act (EPSLA). The
EPSLA requires certain government employers and
private employers with fewer than 500 employees to
provide paid sick leave to employees unable to work or
telework after March 31, 2020, and before January 1,
2021, because the employee:
1. Is subject to a federal, state, or local quarantine or
isolation order related to COVID-19;
2. Has been advised by a health care provider to
self-quarantine due to concerns related to COVID-19;
3. Is experiencing symptoms of COVID-19 and
seeking a medical diagnosis;
4. Is caring for an individual subject to an order
described in (1) or who has been advised as described in
(2);
5. Is caring for a child if the school or place of care has
been closed, or the childcare provider is unavailable, due
to COVID-19 precautions; or
6. Is experiencing any other substantially similar
condition specified by the U.S. Department of Health and
Human Services.
Government employers aren't eligible for the
credit for qualified sick and family leave wages;
however, as with any employer, government
employers aren't liable for the employer share of the social
security tax on the qualified sick leave wages paid to
employees.
TIP
Limits on qualified sick leave wages. The EPSLA
provides different limitations for different circumstances
under which qualified sick leave wages are paid. For paid
sick leave qualifying under (1), (2), or (3) above, the
amount of qualified sick leave wages is determined at the
employee's regular rate of pay, but the wages may not
exceed $511 for any day (or portion of a day) for which the
individual is paid sick leave. For paid sick leave qualifying
under (4), (5), or (6) above, the amount of qualified sick
leave wages is determined at two-thirds the employee's
regular rate of pay, but the wages may not exceed $200
for any day (or portion of a day) for which the individual is
paid sick leave. The EPSLA also limits each individual to a
maximum of up to 80 hours of paid sick leave for the year.
Therefore, the maximum amount of paid sick leave wages
for the year can’t exceed $5,110 for an employee for leave
under (1), (2), or (3), and it can’t exceed $2,000 for an
employee for leave under (4), (5), or (6). For more
information from the Department of Labor on these
requirements and limits, see DOL.gov/agencies/whd/
pandemic.
For more information about qualified sick and family
leave wages, go to IRS.gov/PLC.
4a(ii). Qualified family leave wages. Enter the
qualified taxable family leave wages you paid to your
employees during the year. Qualified family leave wages
aren't subject to the employer share of social security tax;
therefore, the tax rate on these wages is 6.2% (0.062).
Stop paying social security tax on and entering an
employee's wages on line 4a(ii) when the employee's
taxable wages, including wages reported on line 4a,
qualified sick leave wages, qualified family leave wages,
and tips, reach $137,700 for the year. See the instructions
for line 4c for reporting Medicare tax on qualified family
leave wages, including the portion above the social
security wage base.
Qualified family leave wages are wages for social
security and Medicare tax purposes required to be paid
under the Emergency Family and Medical Leave
Expansion Act as enacted under the FFCRA. See the
instructions for line 8b for information about the credit for
qualified sick and family leave wages.
line 4a(ii) (column 1)
x    0.062
line 4a(ii) (column 2)
Emergency Family and Medical Leave Expansion
Act. The Emergency Family and Medical Leave
Expansion Act requires certain government employers
and private employers with fewer than 500 employees to
provide paid family leave under the Family and Medical
Leave Act of 1993 to an employee who has been
employed for at least 30 calendar days. The requirement
to provide leave generally applies when an employee is
unable to work or telework after March 31, 2020, and
before January 1, 2021, due to the need to care for a child
because the school or place of care has been closed, or
the childcare provider is unavailable, due to COVID-19
related reasons. The first 10 days for which an employee
takes leave may be unpaid. During this period, employees
may use other forms of paid leave, such as qualified sick
Instructions for Form 944 (2020)
-9-
leave, accrued sick leave, annual leave, or other paid time
off. After an employee takes leave for 10 days, the
employer must provide the employee paid leave (that is,
qualified family leave wages) for up to 10 weeks. For more
information from the Department of Labor on these
requirements, possible exceptions, and the limitations
discussed below, see DOL.gov/agencies/whd/pandemic.
Government employers aren't eligible for the
credit for qualified sick and family leave wages;
however, as with any employer, government
employers aren't liable for the employer share of the social
security tax on the qualified family leave wages paid to
employees.
Rate of pay and limit on wages. The rate of pay must
be at least two-thirds of the employee’s regular rate of pay
(as determined under the Fair Labor Standards Act of
1938), multiplied by the number of hours the employee
otherwise would have been scheduled to work. The
qualified family leave wages can’t exceed $200 per day or
$10,000 in the aggregate per employee for the year.
For more information about qualified sick and family
leave wages, go to IRS.gov/PLC.
4b. Taxable social security tips. Enter all tips your
employees reported to you during the year until the total of
the tips and taxable wages, including qualified sick leave
wages and qualified family leave wages, for an employee
reach $137,700 for the year. Include all tips your
employees reported to you even if you were unable to
withhold the 6.2% employee share of social security tax.
You will reduce your total taxes by the amount of any
uncollected employee share of social security and
Medicare taxes on tips later on line 6; see Adjustments for
tips and group-term life insurance, later. Don’t include
service charges on line 4b. For details about the
difference between tips and service charges, see Rev.
Rul. 2012-18, 2012-26 I.R.B. 1032, available at
IRS.gov/irb/2012-26_IRB#RR-2012-18.
Your employee must report cash tips to you by the 10th
day of the month after the month the tips are received.
Cash tips include tips paid by cash, check, debit card, and
credit card. The report should include charged tips (for
example, credit and debit card charges) you paid over to
the employee for charge customers, tips the employee
received directly from customers, and tips received from
other employees under any tip-sharing arrangement. Both
directly and indirectly tipped employees must report tips to
you. No report is required for months when tips are less
than $20. Employees may use Form 4070 (available only
in Pub. 1244) or Form 4070-PR (available only in Pub.
1244-PR), or submit a written statement or electronic tip
record.
line 4b (column 1)
x   0.124
line 4b (column 2)
For more information on tips, see section 6 of Pub. 15,
section 5 of Pub. 80, or section 6 of Pub. 179.
4c. Taxable Medicare wages and tips. Enter all
wages, including qualified sick leave wages, qualified
family leave wages, and qualified wages (excluding
TIP
qualified health plan expenses) for the employee retention
credit; tips; sick pay; and taxable fringe benefits that are
subject to Medicare tax. Unlike social security wages,
there is no limit on the amount of wages subject to
Medicare tax. See the instructions for line 6 for an
adjustment that you may need to make on Form 944 for
sick pay.
The rate of Medicare tax is 1.45% (0.0145) each for the
employer and employee or 2.9% (0.029) for both. Include
all tips your employees reported during the year, even if
you were unable to withhold the employee tax of 1.45%.
line 4c (column 1)
x   0.029
line 4c (column 2)
4d. Taxable wages & tips subject to Additional
Medicare Tax withholding. Enter all wages, including
qualified sick leave wages, qualified family leave wages,
and qualified wages (excluding qualified health plan
expenses) for the employee retention credit; tips; sick
pay; and taxable fringe benefits that are subject to
Additional Medicare Tax withholding. You’re required to
begin withholding Additional Medicare Tax in the pay
period in which you pay wages in excess of $200,000 to
an employee and continue to withhold it each pay period
until the end of the calendar year. Additional Medicare
Tax is only imposed on the employee. There is no
employer share of Additional Medicare Tax. All wages that
are subject to Medicare tax are subject to Additional
Medicare Tax withholding if paid in excess of the
$200,000 withholding threshold.
For more information on what wages are subject to
Medicare tax, see the chart, Special Rules for Various
Types of Services and Payments, in section 15 of Pub. 15.
For more information on Additional Medicare Tax, go to
IRS.gov/ADMT. See the instructions for line 6 for an
adjustment that you may need to make on Form 944 for
sick pay.
Once wages and tips exceed the $200,000 withholding
threshold, include all tips your employees reported during
the year, even if you were unable to withhold the
employee tax of 0.9%.
line 4d (column 1)
x   0.009
line 4d (column 2)
4e. Total social security and Medicare taxes. Add
the column 2 amounts on lines 4a–4d. Enter the result on
line 4e.
5. Total Taxes Before Adjustments
Add the total federal income tax withheld from wages,
tips, and other compensation from line 2 and the total
social security and Medicare taxes before adjustments
from line 4e. Enter the result on line 5.
6. Current Year's Adjustments
Enter tax amounts that result from current period
adjustments. Use a minus sign (if possible) to show an
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Instructions for Form 944 (2020)
adjustment that decreases the total taxes shown on line 5.
Otherwise, use parentheses.
In certain cases, you must adjust the amounts you
entered as social security and Medicare taxes in column 2
of lines 4a–4d to figure your correct tax liability for this
year's Form 944. See section 13 of Pub. 15, section 9 of
Pub. 80, or section 12 of Pub. 179.
Adjustment for fractions of cents. Enter adjustments
for fractions of cents (due to rounding) relating to the
employee share of social security and Medicare taxes
withheld. The employee share of amounts shown in
column 2 of lines 4a–4d may differ slightly from amounts
actually withheld from employees' pay due to rounding
social security and Medicare taxes based on statutory
rates. This adjustment may be a positive or a negative
adjustment.
Adjustment for sick pay. If your third-party payer of
sick pay that isn't your agent (for example, an insurance
company) transfers the liability for the employer share of
the social security and Medicare taxes to you, enter a
negative adjustment on line 6 for the employee share of
social security and Medicare taxes that were withheld and
deposited by your third-party sick pay payer on the sick
pay. If you're the third-party sick pay payer and you
transferred the liability for the employer share of the social
security and Medicare taxes to the employer, enter a
negative adjustment on line 6 for any employer share of
these taxes required to be paid by the employer. The sick
pay should be included on line 4a, line 4c, and, if the
withholding threshold is met, line 4d.
No adjustment is reported on line 6 for sick pay that is
paid through a third party as an employer's agent. An
employer's agent bears no insurance risk and is
reimbursed on a cost-plus-fee basis for payment of sick
pay and similar amounts. If an employer uses an agent to
pay sick pay, the employer reports the wages on line 4a,
line 4c, and, if the withholding threshold is met, line 4d,
unless the employer has an agency agreement with the
third-party payer that requires the third-party payer to do
the collecting, reporting, and/or paying or depositing
employment taxes on the sick pay. See section 6 of Pub.
15-A for more information about sick pay reporting.
Adjustments for tips and group-term life insurance.
Enter a negative adjustment for:
• Any uncollected employee share of social security and
Medicare taxes on tips, and
• The uncollected employee share of social security and
Medicare taxes on group-term life insurance premiums
paid for former employees.
See the General Instructions for Forms W-2 and W-3
for information on how to report the uncollected employee
share of social security and Medicare taxes on tips and
group-term life insurance on Form W-2.
Prior year's adjustments. If you need to adjust any
amount reported on line 6 from a previously filed Form
944, complete and file Form 944-X. Form 944-X is an
adjusted return or claim for refund and is filed separately
from Form 944. See section 13 of Pub. 15 or section 9 of
Pub. 80.
7. Total Taxes After Adjustments
Combine the amounts shown on lines 5 and 6 and enter
the result on line 7.
8a. Qualified Small Business Payroll Tax Credit
for Increasing Research Activities
Enter the total amount of the credit from Form 8974,
line 12.
If you enter an amount on line 8a, you must attach
Form 8974. The December 2017 revision of Form
8974 instructs you to enter the amount from Form
8974, line 12, on Form 944, line 8. For 2020, the amount
from Form 8974, line 12, should be entered on Form 944,
line 8a.
8b. Nonrefundable Portion of Credit for
Qualified Sick and Family Leave Wages From
Worksheet 1
Form 944 and these instructions use the terms
“nonrefundable” and “refundable” when
discussing credits. The term “nonrefundable”
means the portion of the credit which is limited by law to
the amount of the employer share of social security tax.
The term “refundable” means the portion of the credit
which is in excess of the employer share of social security
tax.
Businesses and tax-exempt organizations with fewer than
500 employees that are required to provide paid sick
leave under the EPSLA and/or to provide paid family
leave under the Emergency Family and Medical Leave
Expansion Act are eligible to claim the credit for qualified
sick and family leave wages for the period after March 31,
2020, and before January 1, 2021. Enter the
nonrefundable portion of the credit for qualified sick and
family leave wages from Worksheet 1, Step 2, line 2j. The
credit for qualified sick and family leave wages consists of
the qualified sick leave wages, the qualified family leave
wages, and the qualified health plan expenses and
employer share of Medicare tax allocable to those wages.
The nonrefundable portion of the credit is limited to the
employer share of social security tax reported on Form
944, lines 4a and 4b, after that share is first reduced by
any credit claimed on Form 8974 for the qualified small
business payroll tax credit for increasing research
activities, or any credit to be claimed on Form 5884-C for
the work opportunity credit for qualified tax-exempt
organizations hiring qualified veterans.
If you're a third-party payer of sick pay that isn't an
agent (for example, an insurance company) and
you're claiming the credit for qualified sick and
family leave wages for amounts paid to your own
employees, the amount of the employer share of social
security tax reported on line 4a must be reduced by any
adjustment you make on line 6 for the employer share of
social security tax transferred to your client. See
Worksheet 1 to figure your credit.
Any credit in excess of the remaining amount of the
employer share of social security tax is refundable and
reported on Form 944, line 10d. For more information on
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Instructions for Form 944 (2020)
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the credit for qualified sick and family leave wages, go to
IRS.gov/PLC.
Qualified health plan expenses allocable to qualified
sick leave and family leave wages. The credit for
qualified sick leave wages and qualified family leave
wages is increased to cover the qualified health plan
expenses that are properly allocable to the qualified leave
wages for which the credit is allowed. These qualified
health plan expenses are amounts paid or incurred by the
employer to provide and maintain a group health plan but
only to the extent such amounts are excluded from the
employees’ income as coverage under an accident or
health plan. The amount of qualified health plan expenses
generally includes both the portion of the cost paid by the
employer and the portion of the cost paid by the employee
with pre-tax salary reduction contributions. However,
qualified health plan expenses don’t include amounts that
the employee paid for with after-tax contributions. For
more information, go to IRS.gov/PLC.
You must include the full amount (both the
nonrefundable and refundable portions) of the
credit for qualified sick and family leave wages in
your gross income for the tax year that includes the last
day of any calendar quarter in which a credit is allowed.
You can't use the same wages for the employee retention
credit and the credits for paid sick and family leave.
8c. Nonrefundable Portion of Employee
Retention Credit From Worksheet 1
An employer may not claim the employee
retention credit if the employer receives a Small
Business Interruption Loan under the Paycheck
Protection Program (PPP) that is authorized under the
Coronavirus Aid, Relief, and Economic Security (CARES)
Act (“Paycheck Protection Loan”). An employer that
receives a Paycheck Protection Loan shouldn’t claim an
employee retention credit. An employer that applied for a
Paycheck Protection Loan, received payment, and repaid
the loan by May 18, 2020, will be treated as though the
employer had not received a covered loan under the PPP
for purposes of the employee retention credit.
Enter the nonrefundable portion of the employee retention
credit from Worksheet 1, Step 3, line 3h. The employee
retention credit is 50% of the qualified wages you paid to
your employees between March 13, 2020, and December
31, 2020. Qualified wages include qualified health plan
expenses for the employee retention credit. The
nonrefundable portion of the credit is limited to the
employer share of social security tax reported on Form
944, lines 4a and 4b, after that share is first reduced by
any credit claimed on Form 8974 for the qualified small
business payroll tax credit for increasing research
activities, or any credit to be claimed on Form 5884-C for
the work opportunity credit for qualified tax-exempt
organizations hiring qualified veterans, and/or any credit
claimed for the nonrefundable portion of the credit for
qualified sick and family leave wages.
If you're a third-party payer of sick pay that isn't an
agent (for example, an insurance company) and
you're claiming the employee retention credit for
amounts paid to your own employees, the amount of the
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employer share of social security tax reported on line 4a
must be reduced by any adjustment you make on line 6
for the employer share of social security tax transferred to
your client. See Worksheet 1 to figure your credit.
Any credit in excess of the remaining amount of the
employer share of social security tax is refundable and
reported on Form 944, line 10e. For more information on
the employee retention credit, go to IRS.gov/ERC.
Qualified wages for the employee retention credit.
The tax credit is equal to 50% of qualified wages paid to
employees between March 13, 2020, and December 31,
2020. Qualified wages, including qualified health plan
expenses, are limited to a maximum of $10,000 for each
employee for the year. Qualified wages are wages for
social security and Medicare tax purposes paid to certain
employees during any period in a quarter in which your
operations are fully or partially suspended due to a
government order or during a quarter in which you have
had a significant decline in gross receipts. The law
provides that the significant decline in gross receipts is the
period beginning with any quarter in which your gross
receipts are less than 50% of what they were in the same
calendar quarter in 2019 and ending with the quarter that
follows the first quarter beginning after the quarter in
which your gross receipts were greater than 80% of what
they were in the same calendar quarter in 2019.
The wages and qualified health plan expenses
considered in calculating your credit depend on the size of
your workforce. Eligible employers that had an average
number of 100 or fewer full-time employees during 2019
count wages paid to all their employees and the qualified
health plan expenses paid or incurred for all employees
during any period in the quarter in which operations are
fully or partially suspended due to a government order or
during a quarter in which there has been a significant
decline in gross receipts. Eligible employers that had an
average number of more than 100 full-time employees in
2019 may count only wages paid to employees for time
that the employees weren't working, and qualified health
plan expenses paid or incurred by the employer allocable
to the time those employees weren't working, due to the
suspension or significant decline in gross receipts; these
eligible employers can count only wages that don’t
exceed what the employer would have paid that employee
for working for the same amount of time during the prior
30 days. More information on the employee retention
credit is available at IRS.gov/ERC.
Qualified health plan expenses for the employee
retention credit. Qualified wages for the employee
retention credit include qualified health plan expenses.
Qualified health plan expenses are amounts paid or
incurred by the employer to provide and maintain a group
health plan but only to the extent such amounts are
excluded from the employees' income as coverage under
an accident or health plan. The amount of qualified health
plan expenses taken into account in determining the
amount of qualified wages generally includes both the
portion of the cost paid by the employer and the portion of
the cost paid by the employee with pre-tax salary
reduction contributions. However, the qualified health plan
expenses shouldn't include amounts that the employee
paid for with after-tax contributions. Generally, the
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Instructions for Form 944 (2020)
qualified health plan expense is the amount that is
allocable to the hours for which the employees receive
qualified wages for the employee retention credit.
However, qualified health plan expenses for purposes of
the employee retention credit may include health plan
expenses allocable to the applicable periods even if the
employer isn’t paying any qualified wages to the
employee. For more information, see the frequently asked
questions for qualified health plan expenses at IRS.gov/
ERC.
8d. Total Nonrefundable Credits
Add lines 8a, 8b, and 8c. Enter the total on line 8d.
9. Total Taxes After Adjustments and
Nonrefundable Credits
Subtract line 8d from line 7 and enter the result on line 9.
• If line 9 is less than $2,500, you may pay the amount
with Form 944 or you may deposit the amount.
• If line 9 is $2,500 or more, you must generally deposit
your tax liabilities by EFT. However, if you deposited all
taxes accumulated in the first 3 quarters of the year and
your fourth quarter liability is less than $2,500, you may
pay taxes accumulated during the fourth quarter with
Form 944. Also see section 11 of Pub. 15, section 8 of
Pub. 80, or section 11 of Pub. 179 for information about
payments made under the accuracy of deposits rule. The
amount shown on line 9 must equal the amount shown on
line 13m or the “Total tax liability for the year” shown on
line M of Form 945-A, Annual Record of Federal Tax
Liability. For more information, see the line 13 instructions,
later.
For more information and rules about federal tax
deposits, see Must You Deposit Your Taxes, earlier, and
section 11 of Pub. 15, section 8 of Pub. 80, or section 11
of Pub. 179. See Notice 2020-22, Notice 2020-65, and
IRS.gov/ETD for information about the reduction and
deferral of certain deposits.
If you’re a semiweekly schedule depositor, you
must complete Form 945-A. If you fail to complete
and submit Form 945-A, the IRS may assert
deposit penalties based on available information.
10a. Total Deposits for This Year
Enter your deposits for this year, including any
overpayment that you applied from filing Form 944-X,
944-X (SP), 941-X, or 941-X (PR) in the current year. Also
include in the amount shown any overpayment from a
previous period that you applied to this return. Don't
include any amount that you didn't deposit because you
chose to defer the employer or employee share of social
security tax. For more information about the deferrals, see
the line 10b and line 10c instructions next. Also, don't
include any amount you didn't deposit because you
reduced your deposits in anticipation of the credit for
qualified sick and family leave wages or the employee
retention credit, as discussed in Notice 2020-22.
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10b. Deferred Amount of the Employer Share of
Social Security Tax
Enter the amount of the employer share of social security
tax that you’re deferring. Employers, including
government employers, can defer the deposit of the
employer share of social security tax due on or after
March 27, 2020, and before January 1, 2021, as well as
payment due for the employer share of social security tax
for wages paid on or after March 27, 2020, and before
January 1, 2021. The employer share of social security
tax is included on lines 4a and 4b along with the employee
share of social security tax. However, you determine the
amount of the employer share of social security tax that
can be deferred by only considering social security tax on
wages related to deposits and payments due on or after
March 27, 2020. Don't include the employee social
security tax reported on lines 4a(i) and 4a(ii) as part of the
deferred amount of the employer share of social security
tax. If you're a third-party payer of sick pay that isn't an
agent (for example, an insurance company), you must
consider any adjustment that you make on line 6 for the
employer share of social security tax transferred to your
client before deciding the employer share of social
security tax that can be deferred. Don’t reduce the amount
reported on line 10b by any credits claimed on line 8a, 8b,
or 8c or any credit to be claimed on Form 5884-C, line 11,
for the work opportunity credit for qualified tax-exempt
organizations hiring qualified veterans. However, you
can’t defer tax that you have already paid; therefore, the
maximum amount of social security tax (both the
employer and employee share of social security tax) that
can be deferred for the year is the lesser of (1) the total of
the employer and employee share of social security tax, or
(2) the excess of (a) line 7 (reduced by the amount, if any,
on line 8a) over (b) line 10a. For more information about
the deferral of employment tax deposits, including
limitations on the maximum amount you can defer, go to
IRS.gov/ETD.
The deferred amount of the employer share of
social security tax is a deferral of deposits and
payments, not a deferral of liability. You won't
receive a refund or credit of any amount of the employer
share of social security tax already deposited or paid for
the year. However, in determining whether any amount of
the employer share of social security tax was already
deposited for this purpose, you can consider prior
deposits on or after March 27, 2020, as first being
deposited for employment taxes other than the employer
share of social security tax. Although employers
depositing taxes using EFTPS identify the subcategory of
separate deposits for the different employment taxes (for
example, social security tax and Medicare tax), those
entries are for informational purposes only. The IRS
doesn't use that information in comparing liabilities
reported on the employment tax return and the total
deposits made.
Paying the deferred amount of the employer share
of social security tax. One-half of the employer share of
social security tax is due by December 31, 2021, and the
remainder is due by December 31, 2022. Any payments
or deposits you make before December 31, 2021, are first
applied against your payment due on December 31, 2021,
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Instructions for Form 944 (2020)
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and then applied against your payment due on December
31, 2022. For example, if your employer share of social
security tax for 2020 is $20,000 and you deposited $5,000
of the $20,000 during 2020 and defer $15,000 on line 10b,
then you must pay $5,000 by December 31, 2021, and
$10,000 by December 31, 2022. However, if your
employer share of social security tax for 2020 was
$20,000 and you deposited $15,000 of the $20,000 during
2020 and defer $5,000 on line 10b, then you don’t need to
pay any deferred amount by December 31, 2021,
because 50% of the amount that could have been
deferred ($10,000) has already been paid and is first
applied against your payment that would be due on
December 31, 2021. Accordingly, you must pay the
$5,000 deferral by December 31, 2022.
If you initially deferred (that is, didn't deposit) the
employer share of social security tax and later decided to
pay or deposit it in 2020, see Adjusting tax liability for the
deferred amount of social security tax that you pay or
deposit in 2020, later. For additional information, go to
IRS.gov/ETD.
How to pay the deferred amount of social security
tax. You may pay the amount you owe electronically
using EFTPS, by credit or debit card, or by a check or
money order. The preferred method of payment is EFTPS.
For more information, visit EFTPS.gov, or call
800-555-4477 or 800-733-4829 (TDD). To pay the
deferred amount using EFTPS, select Form 944 and the
option for payment due on an IRS notice.
To pay by credit or debit card, go to IRS.gov/
PayByCard. If you pay by check or money order, include a
2020 Form 944-V, Payment Voucher. Make the check or
money order payable to “United States Treasury.” Enter
your EIN, “Form 944,” and “2020” on your check or money
order.
Where to send payments. Payments should be sent
to:
Department of the Treasury
Department of the Treasury
Internal Revenue Service
or
Internal Revenue Service
Ogden, UT 84201-0030
Kansas City, MO 64999-0030
Send your payment to the address above that is in the
same state as the address to which you would mail
returns filed without a payment, as shown under Where
Should You File, earlier.
10c. Deferred Amount of the Employee Share of
Social Security Tax
Enter the amount of the employee share of social security
tax that you’re deferring for the year. On August 8, 2020,
the President issued a Presidential Memorandum
directing the Secretary of the Treasury to use his authority
pursuant to section 7508A of the Internal Revenue Code
to defer the withholding, deposit, and payment of certain
payroll tax obligations. In Notice 2020-65, the Secretary
made relief available under section 7508A to employers
required to withhold social security taxes from wages paid
to employees. Specifically, under the notice, the due date
for withholding and payment of the employee share of
social security tax on applicable wages is postponed until
the period beginning on January 1, 2021, and ending on
April 30, 2021. Applicable wages are social security
wages of less than $4,000 in any biweekly pay period (or
the equivalent threshold amount for other pay periods),
paid on a pay date during the period beginning on
September 1, 2020, and ending on December 31, 2020.
The determination of whether the deferral of withholding
or payment of the employee share of social security tax is
available is made on a pay period-by-pay period basis.
Nothing prohibits employers from getting employee input
on whether to apply the relief to postpone the due date for
the withholding and payment of the employee share of
social security tax on applicable wages paid to the
employee.
You can’t defer tax that you have already paid;
therefore, the maximum amount of social security tax
(both the employer and employee share of social security
tax) that can be deferred for the year is the lesser of (1)
the total of the employer and employee share of social
security tax, or (2) the excess of (a) line 7 (reduced by the
amount, if any, on line 8a) over (b) line 10a.
If you paid an employee supplemental wages (for
example, a bonus or commission) and included
the supplemental wages with the employee’s
regular wages in a single payment (that is, in a single
paycheck) for a pay period, but you didn’t specifically
identify the amount of each, then the entire amount of the
payment must be below $4,000 (or equivalent amount for
pay periods other than a biweekly pay period) to be
eligible for the deferral of the withholding and payment of
the employee share of social security tax on the wages. If
the entire amount is below $4,000, then you may defer the
withholding and payment of the employee share of social
security tax on the entire payment of the wages. If you
paid the supplemental wages separately from the
employee’s regular wages (that is, in a separate check),
or you combined the wages in a single payment but you
specifically identified the amount of each, then the
supplemental wages are disregarded for purposes of
determining whether the regular wages are below $4,000
(or equivalent amount), but the supplemental wages aren’t
eligible for the deferral of the withholding and payment of
the employee share of social security tax.
Paying the deferred amount of the employee share
of social security tax. The due date for the withholding
and payment of the employee share of social security tax
is postponed until the period beginning on January 1,
2021, and ending on April 30, 2021. The employer must
withhold and pay the total deferred employee share of
social security tax ratably from wages paid to the
employee between January 1, 2021, and April 30, 2021. If
necessary, the employer may make arrangements to
otherwise collect the total deferred taxes from the
employee. The employer is liable to pay the deferred
taxes to the IRS and must do so before May 1, 2021, to
avoid interest, penalties, and additions to tax on those
amounts. For more information about the deferral of the
employee share of social security tax, see Notice
2020-65. For information on paying the deferred social
security tax, see How to pay the deferred amount of social
security tax, earlier.
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Instructions for Form 944 (2020)
If you initially deferred (that is, didn't deposit) the
employee share of social security tax and later decide to
pay or deposit it in 2020, see Adjusting tax liability for the
deferred amount of social security tax that you pay or
deposit in 2020, later.
For information about how to report the deferred
amount of the employee share of social security
tax on Form W-2 and Form W-2c for 2020, see
IRS.gov/FormW2 and the 2021 General Instructions for
Forms W-2 and W-3 (available in early 2021).
10d. Refundable Portion of Credit for Qualified
Sick and Family Leave Wages From
Worksheet 1
Businesses and tax-exempt organizations with fewer than
500 employees that are required to provide paid sick
leave under the EPSLA and/or to provide paid family
leave under the Emergency Family and Medical Leave
Expansion Act are eligible to claim the credit for qualified
sick and family leave wages. Enter the refundable portion
of the credit for qualified sick and family leave wages from
Worksheet 1, Step 2, line 2k. The credit for qualified sick
and family leave wages consists of the qualified sick leave
wages, the qualified family leave wages, the allocable
qualified health plan expenses, and the employer share of
Medicare tax allocable to those wages. The refundable
portion of the credit is allowed after the employer share of
social security tax is reduced to zero by nonrefundable
credits.
10e. Refundable Portion of Employee Retention
Credit From Worksheet 1
Enter the refundable portion of the employee retention
credit from Worksheet 1, Step 3, line 3i. The employee
retention credit is 50% of the qualified wages you paid to
your employees between March 13, 2020, and December
31, 2020. The refundable portion of the credit is allowed
after the employer share of social security tax is reduced
to zero by nonrefundable credits.
10f. Total Deposits, Deferrals, and Refundable
Credits
Add lines 10a, 10b, 10c, 10d, and 10e. Enter the total on
line 10f.
10g. Total Advances Received From Filing
Form(s) 7200 for the Year
Enter the total advances received from filing Form(s) 7200
for the year. If you filed Form 7200 but you haven’t
received the advance before filing Form 944, don’t include
that amount. Employers were eligible to file Form 7200 if
they paid qualified sick leave wages, qualified family leave
wages, and/or qualified wages for the employee retention
credit and the amount of employment tax deposits they
retained wasn’t sufficient to cover the cost of qualified sick
and family leave wages and the employee retention credit.
Form 7200 may be filed up to the earlier of
February 1, 2021, or the filing of Form 944 for the
year. However, if you file Form 7200 after the end
of the year, it's possible that it may not be processed prior
to the processing of the filed Form 944. Advance payment
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requests on Form 7200 won't be paid after your Form 944
is processed. When the IRS processes Form 944, we will
correct the amount reported on line 10g to match the
amount of advance payments issued or contact you to
reconcile the difference before we finish processing Form
944.
10h. Total Deposits, Deferrals, and Refundable
Credits Less Advances
Subtract line 10g from line 10f. Enter the result on
line 10h.
11. Balance Due
If line 9 is more than line 10h, enter the difference on
line 11. Otherwise, see Overpayment, later. Never make
an entry on both lines 11 and 12.
You don't have to pay if line 11 is less than $1.
Generally, you should have a balance due only if your
total taxes after adjustments and nonrefundable credits
(line 9) are less than $2,500. However, see If line 9 is
$2,500 or more, earlier, for exceptions.
If you were required to make federal tax deposits, pay
the amount shown on line 11 by EFT. If you weren't
required to make federal tax deposits (see the Federal
Tax Deposit Requirements for Form 944 Filers chart,
earlier) or you're a monthly schedule depositor making a
payment under the accuracy of deposits rule, you may
pay the amount shown on line 11 by EFT, credit card,
debit card, check, money order, or EFW. For more
information on electronic payment options, go to IRS.gov/
Payments.
If you pay by EFT, credit card, or debit card, file your
return using the Without a payment address under Where
Should You File, earlier. Don't file Form 944-V, Payment
Voucher.
If you pay by check or money order, make it payable to
“United States Treasury.” Enter your EIN, “Form 944,” and
the tax period on your check or money order. Complete
Form 944-V and enclose it with Form 944.
If you're required to make deposits and instead
pay the taxes with Form 944, you may be subject
to a penalty.
What if you can't pay in full? If you can't pay the full
amount of tax you owe, you can apply for an installment
agreement online. You can apply for an installment
agreement online if:
• You can't pay the full amount shown on line 11,
• The total amount you owe is $25,000 or less, and
• You can pay the liability in full in 24 months.
To apply using the Online Payment Agreement
Application, go to IRS.gov/OPA.
Under an installment agreement, you can pay what you
owe in monthly installments. There are certain conditions
you must meet to enter into and maintain an installment
agreement, such as paying the liability within 24 months,
and making all required deposits and timely filing tax
returns during the length of the agreement.
If your installment agreement is accepted, you will be
charged a fee and you will be subject to penalties and
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Instructions for Form 944 (2020)
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interest on the amount of tax not paid by the due date of
the return.
12. Overpayment
If line 10h is more than line 9, enter the amount on line 12.
Never make an entry on both lines 11 and 12.
If you deposited more than the correct amount for the
year, you can choose to have the IRS either refund the
overpayment or apply it to your next return. Check only
one box on line 12. If you don't check either box or if you
check both boxes, we will generally apply the
overpayment to your next return. Regardless of any boxes
you check or don’t check on line 12, we may apply your
overpayment to any past due tax account that is shown in
our records under your EIN.
If line 12 is less than $1, we will send a refund or apply
it to your next return only if you ask us in writing to do so.
Part 2: Tell Us About Your Deposit
Schedule and Tax Liability for This
Year
13. Check One
If line 9 is less than $2,500, check the first box on line 13
and go to line 14.
If line 9 is $2,500 or more, check the second box on
line 13. If you’re a monthly schedule depositor, enter your
tax liability for each month and figure the total liability for
the year. The amounts entered on line 13 are a summary
of your monthly tax liabilities, not a summary of deposits
you made. The IRS gets deposit data from EFTs. Enter
your tax liabilities in the month that corresponds to the
dates you paid wages to your employees, not the date
payroll liabilities were accrued or deposits were made. If
you don't enter your tax liability for each month, the IRS
won't know when you should have made deposits and
may assess an “averaged” FTD penalty. See section 11 of
Pub. 15, section 8 of Pub. 80, or section 11 of Pub. 179. If
your tax liability for any month is negative after accounting
for your adjustments reported on line 6, don't enter a
negative amount for the month. Instead, enter zero for the
month and subtract that negative amount from your tax
liability for the next month.
The amount shown on line 13m must equal the
amount shown on line 9. If it doesn't, your tax
deposits and payments may not be counted as
timely. Don't reduce your total liability reported on line 13
by the deferred amount of the employer or employee
share of social security tax, the refundable portion of the
credit for qualified sick and family leave wages, or the
refundable portion of the employee retention credit. The
deferred amount of the employer or employee share of
social security tax reported on line 10b and 10c doesn't
reflect deferred liabilities, but instead postponed due
dates for payment. Don't change your current year tax
liability reported on line 13 by adjustments reported on
any Forms 944-X.
If you’re a semiweekly schedule depositor or if you
became one because you accumulated $100,000 or more
in tax liability on any day in a deposit period, you must
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complete Form 945-A and file it with Form 944. See
$100,000 Next-Day Deposit Rule in section 11 of Pub. 15,
section 8 of Pub. 80, or section 11 of Pub. 179. Don't
complete lines 13a–13m if you file Form 945-A.
Adjusting tax liability for nonrefundable credits
claimed on lines 8a, 8b, and 8c. Monthly schedule
depositors and semiweekly schedule depositors must
account for nonrefundable credits claimed on lines 8a, 8b,
and 8c when reporting their tax liabilities on line 13 or
Form 945-A. The total tax liability for the year must equal
the amount reported on line 9. Failure to account for the
nonrefundable credits on line 13 or Form 945-A may
cause line 13 or Form 945-A to report more than the total
tax liability reported on line 9. Don't reduce your monthly
tax liability reported on lines 13a through 13l or your daily
tax liability reported on Form 945-A below zero.
Qualified small business payroll tax credit for
increasing research activities (line 8a). The qualified
small business payroll tax credit for increasing research
activities is limited to the employer share of social security
tax on wages paid in the quarter that begins after the
income tax return electing the credit has been filed. In
completing line 13 or Form 945-A, you take into account
the payroll tax credit against your liability for the employer
share of social security tax starting with the first payroll
payment of the quarter that includes payments of wages
to your employees subject to social security tax. The
credit may be taken to the extent of the employer share of
social security tax on wages associated with the first
payroll payment, and then to the extent of the employer
share of social security tax associated with succeeding
payroll payments in the quarter until the credit is used.
Consistent with the entries on line 13 or Form 945-A, the
payroll tax credit should be taken into account in making
deposits of employment tax. If any payroll tax credit is
remaining at the end of the quarter that has not been used
completely because it exceeds the employer share of
social security tax for the quarter, the excess credit may
be carried forward to the succeeding quarter and allowed
as a payroll tax credit for the succeeding quarter. The
payroll tax credit may not be taken as a credit against
income tax withholding, Medicare tax, or the employee
share of social security tax.
Also, the remaining payroll tax credit may not be
carried back and taken as a credit against wages paid
from preceding quarters that are reported on the same
Form 944 or on Forms 944 for preceding years. If an
amount of payroll tax credit is unused at the end of the
calendar year because it is in excess of the employer
share of social security tax on wages paid during the
applicable quarters in the calendar year, the remaining
payroll tax credit may be carried forward to the first
quarter of the succeeding calendar year as a payroll tax
credit against the employer share of social security tax on
wages paid in that quarter.
Example. Rose Co. is an employer with a calendar tax
year that filed its timely income tax return on April 15,
2020. Rose Co. elected to take the qualified small
business payroll tax credit for increasing research
activities on Form 6765. The third quarter of 2020 is the
first quarter that begins after Rose Co. filed the income tax
return making the payroll tax credit election. Therefore,
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Instructions for Form 944 (2020)
the payroll tax credit applies against Rose Co.'s share of
social security tax on wages paid to employees in the third
quarter of 2020. Rose Co. is a semiweekly schedule
depositor. Rose Co. completes Form 945-A by reducing
the amount of liability entered for the first payroll payment
in the third quarter of 2020 that includes wages subject to
social security tax by the lesser of (1) its share of social
security tax on the wages or (2) the available payroll tax
credit. If the payroll tax credit elected is more than Rose
Co.'s share of social security tax on the first payroll
payment of the quarter, the excess payroll tax credit
would be carried forward to succeeding payroll payments
in the third quarter until it is used. If the amount of the
payroll tax credit exceeds Rose Co.'s share of social
security tax on wages paid to its employees in the third
quarter, the excess credit would be treated as a payroll
tax credit against its share of social security tax on wages
paid in the fourth quarter. If the amount of the payroll tax
credit remaining exceeded Rose Co.'s share of social
security tax on wages paid in the fourth quarter, it could be
carried forward and treated as a payroll tax credit for the
first quarter of 2021.
Nonrefundable portion of credit for qualified sick
and family leave wages (line 8b). The nonrefundable
portion of the credit for qualified sick and family leave
wages is limited to the employer share of social security
tax on wages paid in the year that is remaining after that
share is first reduced by any credit claimed on Form 944,
line 8a, for the qualified small business payroll tax credit
for increasing research activities, and/or any credit to be
claimed on Form 5884-C, line 11, for the work opportunity
credit for qualified tax-exempt organizations hiring
qualified veterans. In completing line 13 or Form 945-A,
you take into account the nonrefundable portion of the
credit for qualified sick and family leave wages (including
the qualified health plan expenses and employer share of
Medicare tax allocable to those wages) against the liability
for the first payroll payment of the year, but not below
zero. Then reduce the liability for each successive payroll
payment of the year until the nonrefundable portion of the
credit is used. Any credit for qualified sick and family
leave wages that is remaining at the end of the year
because it exceeds the employer share of social security
tax is claimed on line 10d as a refundable credit. The
refundable portion of the credit doesn’t reduce the liability
reported on line 13 or Form 945-A.
Example. Maple Co. is a monthly schedule depositor
that pays employees every Friday. In 2020, Maple Co.
had pay dates every Friday of 2020 starting January 3,
2020. Maple Co. paid qualified sick and family leave
wages on May 1 and May 8. The nonrefundable portion of
the credit for qualified sick and family leave wages for the
year is $300. On line 13, Maple Co. will use the $300 to
reduce the liability for the January 3 pay date, but not
below zero. If any nonrefundable portion of the credit
remains, Maple Co. applies it to the liability for the
January 10 pay date, then the January 17 pay date, and
so forth until the entire $300 is used.
Nonrefundable portion of employee retention
credit (line 8c). The nonrefundable portion of the
employee retention credit is limited to the employer share
of social security tax on wages paid in the year that is
remaining after that share is first reduced by any credit
claimed on Form 944, line 8a, for the qualified small
business payroll tax credit for increasing research
activities; any credit to be claimed on Form 5884-C,
line 11, for the work opportunity credit for qualified
tax-exempt organizations hiring qualified veterans; and/or
any credit claimed on Form 944, line 8b, for the
nonrefundable portion of the credit for qualified sick and
family leave wages. In completing line 13 or Form 945-A,
you take into account the nonrefundable portion of the
employee retention credit against the liability for the first
payroll payment of the year, but not below zero. Then
reduce the liability for each successive payroll payment of
the year until the nonrefundable portion of the credit is
used. Any employee retention credit that is remaining at
the end of the year because it exceeds the employer
share of social security tax is claimed on line 10e as a
refundable credit. The refundable portion of the credit
doesn’t reduce the liability reported on line 13 or Form
945-A.
Example. Maple Co. is a monthly schedule depositor
that pays employees every Friday. In 2020, Maple Co.
had pay dates every Friday of 2020 starting January 3,
2020. Maple Co. paid qualified wages for the employee
retention credit on May 1 and May 8. The nonrefundable
portion of the employee retention credit for the year is
$300. On line 13, Maple Co. will use the $300 to reduce
the liability for the January 3 pay date, but not below zero.
If any nonrefundable portion of the credit remains, Maple
Co. applies it to the liability for the January 10 pay date,
then the January 17 pay date, and so forth until the entire
$300 is used.
You may reduce your deposits by the amount of
the nonrefundable and refundable portions of the
credit for qualified sick and family leave wages,
the nonrefundable and refundable portions of the
employee retention credit, and any deferred employment
taxes, as discussed earlier under Reducing your deposits
for COVID-19 credits.
Adjusting tax liability for the deferred amount of so-
cial security tax that you pay or deposit in 2020. If
you defer the employer and/or employee share of social
security tax and subsequently pay or deposit that deferred
amount during 2020, you should report the amount of the
payment or deposit on Form 944, line 13, or Form 945-A
on the date of the payment or deposit and not the date of
liability. You shouldn’t include any portion of the deferred
amount of social security taxes already paid or deposited
by December 31, 2020, on Form 944, line 10b or 10c.
For example, if you're a monthly schedule depositor
that has an employment tax liability of $50 every month in
2020 and you defer $10 of the employer share of social
security tax from your June liability, but deposit your
deferred amount of $10 together with your $50 deposit for
your November tax liability, you would report $40 for your
June tax liability ($50 minus $10) and $60 for your
November liability ($50 plus $10) on line 13. Don’t include
the $10 deferral on Form 944, line 10b.
TIP
Instructions for Form 944 (2020)
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