Instructions For Form 944 - Employer'S Annual Federal Tax Return

2017

Department of the Treasury

Internal Revenue Service

Instructions for Form 944

Employer's ANNUAL Federal Tax Return

Section references are to the Internal Revenue Code

The payroll tax credit must generally be elected on an

unless otherwise noted.

original income tax return that is timely filed (including

extensions). However, Notice 2017-23 provides a limited

Future Developments

exception to that rule, allowing a qualified small business

that timely files its income tax return for a tax year

For the latest information about developments related to

beginning after December 31, 2015, but fails to make the

Form 944 and its instructions, such as legislation enacted

payroll tax credit election, to make the election on an

after they were published, go to IRS.gov/Form944.

amended income tax return filed on or before December

What's New

31, 2017. The Form 6765 filed with that amended income

tax return must meet certain procedural requirements

New filing addresses. The filing addresses for

provided in section 4.02 of Notice 2017-23. If the payroll

employers located in Georgia, Illinois, Kentucky,

tax credit is elected on an amended income tax return

Michigan, Tennessee, and Wisconsin have changed. See

filed under Notice 2017-23, the payroll tax credit is

Where Should You File, later.

allowed against the employer share of social security tax

Social security and Medicare tax for 2017. The social

for the quarter that begins after the amended income tax

security tax rate is 6.2% each for the employee and

return is filed. The payroll tax credit can't be applied to an

employer, unchanged from 2016. The social security

earlier quarter.

wage base limit is $127,200.

Reminders

The Medicare tax rate is 1.45% each for the employee

and employer, unchanged from 2016. There is no wage

Work opportunity tax credit for qualified tax-exempt

base limit for Medicare tax.

organizations hiring qualified veterans. The work

opportunity tax credit is available for eligible unemployed

Social security and Medicare taxes apply to the wages

of household workers you pay $2,000 or more in cash

veterans who begin work on or after November 22, 2011,

and before January 1, 2020. Qualified tax-exempt

wages in 2017. Social security and Medicare taxes apply

to election workers who are paid $1,800 or more in cash

organizations that hire eligible unemployed veterans can

claim the work opportunity tax credit against their payroll

or an equivalent form of compensation in 2017.

tax liability using Form 5884-C. For more information, go

Qualified small business payroll tax credit for in-

to IRS.gov/WOTC.

creasing research activities. For tax years beginning

COBRA premium assistance credit. Effective for tax

after December 31, 2015, a qualified small business may

periods beginning after December 31, 2013, the credit for

elect to claim up to $250,000 of its credit for increasing

COBRA premium assistance payments can't be claimed

research activities as a payroll tax credit against the

on Form 944. Instead, after filing your Form 944, file Form

employer's share of social security tax. The portion of the

944-X, Adjusted Employer's ANNUAL Federal Tax Return

credit used against the employer's share of social security

or Claim for Refund, to claim the COBRA premium

tax is allowed in the first calendar quarter beginning after

assistance credit. Filing a Form 944-X before filing a Form

the date that the qualified small business filed its income

944 for the year may result in errors or delays in

tax return. The first Form 944 that you can claim this credit

processing your Form 944-X. For more information, go to

on is Form 944 filed for calendar year 2017. The election

IRS.gov/COBRACredit.

and determination of the credit amount that will be used

against the employer's share of social security tax are

If you’re entitled to claim the COBRA premium

made on Form 6765, Credit for Increasing Research

assistance credit, but aren't otherwise required to

TIP

Activities. The amount from Form 6765, line 44, must then

file Form 944, file a Form 944 with -0- entered on

be reported on Form 8974, Qualified Small Business

line 11 before filing a Form 944-X to claim the credit.

Payroll Tax Credit for Increasing Research Activities.

Form 8974 is used to determine the amount of the credit

Employers can choose to file Forms 941, 941-SS, or

that can be used in the current year. The amount from

941-PR instead of Form 944. Employers required to file

Form 8974, line 12, is reported on Form 944, line 8. If

Form 944, who want to file Forms 941, 941-SS, or 941-PR

you’re claiming the research payroll tax credit on your

instead, must notify the IRS they’re electing to file

Form 944, you must attach Form 8974 to Form 944. For

quarterly Forms 941, 941-SS, or 941-PR and opting out of

more information about the payroll tax credit, see Notice

filing Form 944. See What if you want to file Forms 941,

2017-23, 2017-16 I.R.B. 1100, available at

IRS.gov/irb/

941-SS, or 941-PR instead of Form 944, later.

2017-16_IRB/ar07.html. Also see Adjusting tax liability for

Correcting a previously filed Form 944. If you

the qualified small business payroll tax credit for

discover an error on a previously filed Form 944, make the

increasing research activities reported on line 8, later.

correction using Form 944-X. Form 944-X is filed

separately from Form 944. For more information, see the

Oct 23, 2017

Cat. No. 39820A

Instructions For Form 944 - Employer'S Annual Federal Tax Return - 2017

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