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Form 941 and 944 Overview

Forms 941 and 944 are both used to report payroll expenses and taxes to the IRS. The forms include information such as total wages paid, number of employees, income taxes withheld, group term life insurance, sick pay, tips, Social Security taxes (employer and employee portions), and Medicare taxes (employer and employee portions). These forms report the total liability that the employer owes to the IRS. Both forms have the same purpose, but there are a few differences. 

Even though the forms are used for the same purpose, there is one main difference. Form 941 is filed quarterly and is the standard payroll reporting form that employers use. Form 944 is filed annually and can only be filed by employers who have less than $1,000 in payroll tax liabilities. 

If your organization...

  • Has employees
  • Has more than $1,000 in Federal Tax liability (Federal income withholdings, Medicare, and Social Security)
  • Has not received permission from the IRS to file Form 944
Then you should file Form 941 quarterly. 

If your organization...

  • Has employees
  • Has less than $1,000 in Federal Tax liability
  • Has received permission from the IRS to file Form 944
Then Form 944 can be filed in place of the quarterly Form 941. 

One question we frequently receive is how a ministers wages should be included on the payroll filing. According to IRS Section 1402(e) and 3121(c), ministers are not subject to mandatory income tax withholding. Unless one or more ministerial employees request non-mandatory withholding, church employers with only ministerial employees do not need to file Form 941 or Form 944. The IRS Ministers Audit Technique Guide explains in further detail a minister's treatments for social security, Medicare tax, Federal Insurance Compensation Act taxes, and income tax withholding. Form 941 or 944 must be filed when non-ministerial employees are compensated or ministers request withholding.

If you have any questions or need help with payroll filings please contact our office to discuss how we can help you. 




  

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