Form 940, 941, or 944 Comes Down to Your Workforce, Your Liability, and a Written IRS Notice
Employers that pay wages subject to federal income tax withholding or Social Security and Medicare taxes file Form 941 each quarter (Form 941 instructions, Rev. 03/2026). Employers meeting the federal unemployment tax (FUTA) wage test also file Form 940 each year. Form 944 replaces Form 941 only for an employer the IRS has notified in writing, and a Form 944 filer that meets the FUTA test still files Form 940.
Three facts about your payroll decide the answer. They are who you employ (household, farm, or other business workers), your annual liability against the $1,000 Form 944 line, and whether the IRS has given you written notice about Form 944.
What each form reports and what triggers it
Form 941 is the quarterly return that reports the wages, tips, withheld income tax, any Additional Medicare Tax withheld, and both the employer and employee shares of Social Security and Medicare taxes for an employer that pays wages subject to withholding or those taxes (Form 941 instructions, Rev. 03/2026). An employer files one Form 941 per quarter however many locations or divisions it has (Publication 15 (2026)).
Form 940 is the annual return for FUTA, a tax that only employers pay. An employer files it when it paid $1,500 or more in wages in any calendar quarter, or had at least one employee for some part of a day in any 20 or more different weeks, in the current or preceding year (Form 940 instructions (2025 edition)).
As of October 2026, the FUTA rate for 2026 is 6.0% on the first $7,000 paid to each employee, with a credit of up to 5.4% when state unemployment tax was paid in full, on time, and on the same wages in a state that is not a credit reduction state (Publication 15 (2026)). That leaves 0.6% for an employer entitled to the maximum credit, or $42 per employee on the $7,000 wage base. State unemployment tax rules and wage bases vary by state, so confirm yours with your state agency.
Form 944 is the annual substitute for Form 941, reporting the same taxes once a year, and it is available only to an employer the IRS has notified (Form 944 instructions (2025 edition)). Backup withholding and withholding on pensions, annuities, and gambling winnings go on Form 945, household wages go on Schedule H, and farm wages go on Form 943 (Form 941 instructions, Rev. 03/2026).
Your workforce decides which return carries which wages
Wages go on different returns depending on whether the work is household, farm, or other business work.
Household wages go on Schedule H, but a household employer that files Form 941 for business employees may include household employees on that Form 941 (Publication 15 (2026)). Household employers test FUTA at $1,000 or more in cash wages in a quarter in the current or preceding year, and they generally report that FUTA on Schedule H instead of Form 940 (Form 940 instructions (2025 edition)).
A seasonal employer files no Form 941 for a quarter in which it pays no wages, but it must check the seasonal employer box on line 18 of every Form 941 it files, because otherwise the IRS expects a return for each quarter. Any other employer that files Form 941 keeps filing for quarters with no wages until it files a final return (Form 941 instructions, Rev. 03/2026).
A farm employer files Form 943 for farm wages, which reports Social Security, Medicare, and withheld income tax on farm work, and still files Form 940 when it paid $20,000 or more in cash farm wages in any calendar quarter, or had 10 or more farmworkers in 20 or more different weeks, in the current or preceding year. An employer with both farm and nonfarm workers files Form 941 for the nonfarm wages (Publication 15 (2026)).
Business structure decides who signs the return
The Form 941 filing requirement turns on paying wages subject to withholding or Social Security and Medicare taxes, and a sole proprietor with employees meets it (Form 941 instructions, Rev. 03/2026). Structure matters at the signature line, where Part 5 names who may sign. For a sole proprietorship, that is the owner. For a corporation, including an LLC treated as one, it is a duly authorized principal officer. For a partnership, including an LLC treated as one, it is a responsible and duly authorized partner, member, or officer. A single-member disregarded LLC uses its owner or a principal officer, a trust or estate uses its fiduciary, and an agent may sign under a valid power of attorney (Form 941 instructions, Rev. 03/2026).
Your liability and a written notice decide Form 944
An employer files Form 944 only after the IRS has notified it in writing (Form 944 instructions (2025 edition)). The IRS designed the form for the smallest employers, those with annual liability of $1,000 or less, counting income tax withheld plus both the employer and employee shares of Social Security and Medicare taxes (Form 944 instructions (2025 edition)).
Can an employer with annual liability of $1,000 or less simply choose Form 944? Not without a written IRS notice, because eligibility alone does not authorize it. An employer with only household employees or only agricultural employees cannot file Form 944. A notified filer keeps filing Form 944 even when liability later passes $1,000, until the IRS notifies it to file quarterly Forms 941 or confirms a request in writing (Form 944 instructions (2025 edition)). A Form 944 filer that meets the FUTA test still files Form 940, because Form 944 does not replace it (Publication 15 (2026)).
Each year, an employer that expects $1,000 or less in annual liability can ask the IRS to let it file Form 944, and a Form 944 filer can ask to file quarterly Form 941, by calling 800-829-4933 by April 1 or sending a written request postmarked by mid-March (IRS page on employers filing employment taxes annually). For 2026, the Form 941 instructions set the windows at January 1 to April 1 by phone and January 1 to March 16 for a postmarked written request (Form 941 instructions, Rev. 03/2026). A change takes effect only on written IRS notice, and until then the employer stays on its current form. An employer unsure which form applies can call the same number (Form 944 instructions (2025 edition)).
Due dates and penalties for 2026 returns
As of October 2026, Form 941 for the third quarter of 2026 is due Monday, November 2, 2026 (October 31 is a Saturday), or Tuesday, November 10, 2026, if all deposits were made on time and in full. Form 941 for the fourth quarter, Form 940, and Form 944 for 2026 are due Monday, February 1, 2027 (January 31 is a Sunday), or Wednesday, February 10, 2027, if all deposits were made on time and in full, which for Form 940 means all FUTA tax was deposited when due (IRS employment tax due dates page). The same IRS page says depositing the taxes alone does not report them or relieve you of the requirement to file a return. A due date that falls on a Saturday, Sunday, or legal holiday moves to the next business day (Form 941 instructions, Rev. 03/2026).
A return that is required but not filed draws a failure-to-file penalty of 5% of the unpaid tax due with the return for each whole or part month, generally up to 25% of the tax due (Publication 15 (2026)). Late deposits draw tiered penalties of 2% for deposits 1 to 5 days late, 5% for 6 to 15 days late, 10% for 16 or more days late, and 15% for amounts unpaid more than 10 days after the first IRS notice or on the day the IRS demands immediate payment. The tiers are not cumulative, and days are calendar days counted from the due date (IRS failure-to-deposit penalty page). A required deposit paid with the return draws 10% (Publication 15 (2026)).
AsureCentral covers payroll tax filing for growing employers (25 to 500 employees, with reach to 1,000-plus) who run payroll themselves. AsureWorks runs on AsureCentral, with Asure specialists doing the work, including payroll tax filing and reporting. AsureWorks is a managed service and a PEO alternative, with no co-employment. You remain the employer of record, and statutory liability stays with you as the employer.
Frequently asked questions
Do I have to file both Form 940 and Form 941?
An employer that pays wages subject to withholding or Social Security and Medicare taxes and meets the Form 940 test files Form 940 in addition to Form 941 or Form 944. The two report different taxes. Form 941 covers withheld income tax plus Social Security and Medicare, while Form 940 covers FUTA, which only employers pay. Form 944 can replace Form 941 but not Form 940 (Form 944 instructions (2025 edition) and Publication 15 (2026)).
Who files Form 944 instead of Form 941?
Only an employer the IRS has notified in writing files Form 944 instead of Form 941, and the form is meant for annual liability of $1,000 or less. An employer that is eligible but has no notice does not choose Form 944 on its own. The $1,000 line counts income tax withheld plus both shares of Social Security and Medicare taxes (Form 944 instructions (2025 edition)).
Does a sole proprietor have to file Form 941?
A sole proprietor files Form 941 when it pays employees wages subject to withholding or Social Security and Medicare taxes, unless the IRS has notified it to file Form 944 or its only employees are household or farm employees. The owner signs Part 5 of Form 941 for a sole proprietorship. For an LLC, the signer depends on whether the IRS treats it as a corporation, a partnership, or a disregarded entity (Form 941 instructions, Rev. 03/2026).
Who does not file Form 941?
An employer does not file Form 941 when it has filed a final return, has been notified to file Form 944, has only household employees (Schedule H), or pays only farm wages (Form 943). A seasonal employer files no Form 941 for a quarter without wages but must check the seasonal box on line 18 of every Form 941 it does file, or the IRS expects all four (Form 941 instructions, Rev. 03/2026). An employer with both farm and nonfarm workers files Form 941 for the nonfarm wages (Publication 15 (2026)).
What is the threshold for Form 940, and who must file it?
An employer owes Form 940 when it paid $1,500 or more in wages in any calendar quarter, or had at least one employee for some part of a day in any 20 or more different weeks, in the current or preceding year. Household employers use a $1,000 cash-wage quarterly test, and farm employers use $20,000 in cash wages in a quarter or 10 or more farmworkers in 20 or more different weeks, each over the same current or preceding year. FUTA is paid by the employer alone, on the first $7,000 paid to each employee for 2026, and Form 940 is not a substitute for Form 941 or Form 944 (Publication 15 (2026)).
Talk to an expert at Asure
An Asure expert can walk you through running payroll yourself in AsureCentral or having Asure specialists do the work through AsureWorks. It is one platform either way, and the choice of who does the work is yours.
