Form 944 for Eligible Small Employers
Form 944 is now available to Enhanced and Standard Payroll subscribers who use QuickBooks 2007, 2006, and 2005. Form 944 is an annual employment tax filing for certain small employers. The 2006 calendar year is the first applicable period for this new Form 944, and the first filing is due by Jan. 31, 2007.
Qualification for Form 944
The IRS designed this form so the smallest employers will have to file this form only once a year rather than filing Form 941 four times a year. Smallest employers are considered those whose combined annual liability for Social Security, Medicare, and federal income tax withholdings is $1,000 or less. Additional conditions apply, however, so you will want to review the document Instructions for Form 944 (Rev. November 2006) posted on the IRS Web site at www.irs.gov to understand who qualifies.
According to information that Intuit Payroll Services has received from the IRS, the IRS plans to mail a notification letter around Feb. 1 each year to newly identified 944 filers only. If you received this letter in February 2006 and you remain at or below the $1,000 total, you should not receive another letter. If you receive a letter in February of 2007 telling you that you have been identified as a 944 filer, your first 944 filing for tax year 2007 will be January 2008.
If you make Form 941 payments in January 2007, and the IRS changes you to a Form 944 filer for tax year 2007 (sending notification in February 2007), then the payment will be moved or applied to your Form 944 by the IRS internally.
Notification to Change from Annual (Form 944) to Quarterly (Form 941)
According to information that Intuit Payroll Services has received from the IRS, if you timely file and the IRS timely processes your Form 944, and your combined annual liability for Social Security, Medicare, and federal income tax withholdings exceeds $1,000, then the IRS will send you a CP 250A notification toward the end of February 2007. The CP 250A tells you that you exceeded $1,000 and therefore are a Form 941 filer starting with calendar year 2007. The first Form 941 is due April 30, 2007.
If you file a Form 944 at greater than $1,000, but you either file late or the IRS does not process it quickly enough, you will receive a CP 250B from the IRS telling you to stay with Form 944 for 2007 and that you will be changed back to Form 941 in 2008. The CP 250B notice will be sent when your tax return is posted. In December 2007, you will receive a CP 250C reminder notice, advising you to file Form 944 for 2007 and change to 941 for 2008.
If you have any questions about what filing requirement you fall under (941 or 944), the IRS requests that you call the IRS at (800) 829-0115 to confirm. This request especially pertains to taxpayers who have any doubt or who exceed $1,000 as 944 filers.
For more information about Form 944, see http://www.irs.gov/pub/irs-pdf/i944.pdf.
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