Annual Payroll Tax Return Available for Small Employers

Final regulations and procedures were issued regarding payroll tax returns for "qualified" (very small) employers, those whose estimated annual employment tax liability is $1,000 or less. An employer's annual employment tax liability includes social security, Medicare, and withheld federal income taxes. Qualified employers are eligible to file Form 944 (Employer's Annual Federal Tax Return), rather than Form 941 (Employer's Quarterly Federal Tax Return). Prior Notification – Some employers may have already been notified that they are eligible to file Form 944. If the employer prefers to file Form 944, no further action is required with the IRS. The taxpayer should file the Form 944 as instructed in the notice. Choosing to File Form 944 – If an employer has not been contacted by the IRS about filing Form 944, and the employer wants to file Form 944, the employer may request from the IRS a notification letter confirming the employer may file Form 944 by calling 1-800-829-4933 before April 1, 2009. Choosing Not to File Form 944 – If an employer received notification from the IRS with instructions to file Form 944, the employer is required to file Form 944 unless the employer opts-out because one of the following two conditions are met: (1) The employer anticipates that its employment tax liability for tax year 2009 will be more than $1,000; or (2) The employer wants to file electronically quarterly Forms 941 for tax year 2009 If these conditions are met, the employer may opt-out of filing Form 944 by following the specific procedures of Rev. Proc. 2009-13, which are available from ThomasYork by request.