Instructions for Form 944, Employer's Annual Federal Tax Return (2021)
Summary
2021 Instructions for Form 944, Employer's ANNUAL Federal Tax Return, from the Department of the Treasury, Internal Revenue Service. The contents list Future Developments, What's New, Reminders, General Instructions on the purpose of Form 944, who must file and where to file, and Specific Instructions for Parts 1 through 5, followed by worksheets for credits for qualified sick and family leave wages. The What's New section states that the social security wage base limit is $142,800, that the Medicare tax rate is 1.45% each for the employee and employer, and that the COVID-19 related credit for qualified sick and family leave wages has been extended and amended, including by the American Rescue Plan Act of 2021.
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“Instructions for Form 944, Employer's Annual Federal Tax Return (2021).”
Original at www.irs.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/internal-revenue-service-form-944-instructions-december-2021-revision-5025d1948e/
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2021 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 family leave wages for leave taken before April 1, 2021,
unless otherwise noted. aren't subject to the employer share of social security tax;
therefore, the tax rate on these wages is 6.2%. The social
Contents Page
security wage base limit is $142,800.
Future Developments . . . . . . . . . . . . . . . . . . . . . . . . 1
What's New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 The Medicare tax rate is 1.45% (0.0145) each for the
employee and employer, unchanged from 2020. There is
Reminders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
no wage base limit for Medicare tax.
General Instructions . . . . . . . . . . . . . . . . . . . . . . . . . 6
Social security and Medicare taxes apply to the wages
Purpose of Form 944 . . . . . . . . . . . . . . . . . . . . . 6 of household workers you pay $2,300 or more in cash
Who Must File Form 944? . . . . . . . . . . . . . . . . . . 6 wages in 2021. Social security and Medicare taxes apply
When Must You File? . . . . . . . . . . . . . . . . . . . . . 8 to election workers who are paid $2,000 or more in cash
How Should You Complete Form 944? . . . . . . . . . 8 or an equivalent form of compensation in 2021.
Where Should You File? . . . . . . . . . . . . . . . . . . . 9 The COVID-19 related credit for qualified sick and
Must You Deposit Your Taxes? . . . . . . . . . . . . . . 9 family leave wages has been extended and amen-
What About Penalties and Interest? . . . . . . . . . . 11 ded. The Families First Coronavirus Response Act
Specific Instructions . . . . . . . . . . . . . . . . . . . . . . . . 11 (FFCRA) was amended by recent legislation. The FFCRA
Part 1: Answer These Questions for This requirement that employers provide paid sick and family
Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 leave for reasons related to COVID-19 (the employer
mandate) expired on December 31, 2020; however, the
Part 2: Tell Us About Your Deposit Schedule
COVID-related Tax Relief Act of 2020 extends the periods
and Tax Liability for This Year . . . . . . . . . . . . 22
for which employers providing leave that otherwise meets
Part 3: Tell Us About Your Business . . . . . . . . . . 24 the requirements of the FFCRA may continue to claim tax
Part 4: May We Speak With Your Third-Party credits for qualified sick and family leave wages paid for
Designee? . . . . . . . . . . . . . . . . . . . . . . . . . . 26 leave taken before April 1, 2021.
Part 5: Sign Here (Approved Roles) . . . . . . . . . . 26 The American Rescue Plan Act of 2021 (the ARP) adds
How To Get Forms, Instructions, and Publications . . . 26 new sections 3131, 3132, and 3133 to the Internal
Worksheet 1. Credit for Qualified Sick and Family Revenue Code to provide credits for qualified sick and
Leave Wages for Leave Taken Before April 1, family leave wages similar to the credits that were
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 previously enacted under the FFCRA and amended and
Worksheet 2. Employee Retention Credit for extended by the COVID-related Tax Relief Act of 2020.
Qualified Wages Paid After December 31, The credits under sections 3131 and 3132 are available
2020, and Before July 1, 2021 . . . . . . . . . . . . . . 28 for qualified leave wages paid for leave taken after March
Worksheet 3. Credit for Qualified Sick and Family 31, 2021, and before October 1, 2021. Below are the
Leave Wages for Leave Taken After March 31, major changes made under the ARP.
2021, and Before October 1, 2021 . . . . . . . . . . . 29 • The ARP keeps the daily wage thresholds that
Worksheet 4. Employee Retention Credit for previously existed. The aggregate cap on qualified sick
Qualified Wages Paid After June 30, 2021, and leave wages remains at 80 hours (10 days), but the
Before January 1, 2022 . . . . . . . . . . . . . . . . . . . 30 limitation on the number of days resets with respect to
leave taken by employees beginning on April 1, 2021. The
Worksheet 5. COBRA Premium Assistance
aggregate cap on qualified family leave wages increases
Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
to $12,000 from the previous cap of $10,000, and the
Future Developments aggregate cap resets with respect to leave taken by
employees beginning on April 1, 2021.
For the latest information about developments related to
Form 944 and its instructions, such as legislation enacted
• The ARP also created a new category of leave under
the Emergency Paid Sick Leave Act (EPSLA) and the
after they were published, go to IRS.gov/Form944.
Expanded Family and Medical Leave Act (Expanded
What's New FMLA) to include the time the employee is seeking or
awaiting the results of a diagnostic test for, or a medical
Social security and Medicare tax for 2021. The rate of diagnosis of, COVID-19 (and the employee has been
social security tax on taxable wages, including qualified exposed to COVID-19 or the employee’s employer has
sick leave wages and qualified family leave wages for requested such test or diagnosis), or the employee is
leave taken after March 31, 2021, and before October 1, obtaining or accompanying an individual who is obtaining
2021, is 6.2% each for the employer and employee or immunizations related to COVID-19 or recovering from or
12.4% for both. Qualified sick leave wages and qualified caring for an individual recovering from an injury,
Dec 17, 2021 Cat. No. 39820A
disability, illness, or condition related to such for leave taken after March 31, 2021, and before October
immunization. Additionally, employers may provide 1, 2021. For more information about the credit for qualified
employees with paid family leave if the employee is sick and family leave wages, go to IRS.gov/PLC.
unable to work due to any of the conditions for which The COVID-19 related employee retention credit has
eligible employers may provide paid sick leave under the been extended and amended. The Coronavirus Aid,
EPSLA. Relief, and Economic Security (CARES) Act was
• The credits are still increased by the qualified health amended by recent legislation. The Taxpayer Certainty
plan expenses allocable to the qualified sick and family and Disaster Tax Relief Act of 2020 modifies the
leave wages, but the credits are now also increased, calculation of the employee retention credit and extends
subject to the qualified leave wage limitations, by certain the date through which the credit may be claimed to
amounts paid under collective bargaining agreements that qualified wages paid before July 1, 2021.
are properly allocable to the qualified leave wages. The
collectively bargained contributions paid by an eligible The ARP adds new section 3134 to the Internal
employer that are eligible for the credit are collectively Revenue Code to provide an employee retention credit
bargained defined benefit pension plan contributions and similar to the credit that was previously enacted under the
collectively bargained apprenticeship program CARES Act and amended and extended by the Taxpayer
contributions that are properly allocable to qualified leave Certainty and Disaster Tax Relief Act of 2020. Generally,
wages. the rules for the employee retention credit for qualified
• Under section 3133, the credits are increased by the wages paid before July 1, 2021, and qualified wages paid
amount of the employer share of social security tax and after June 30, 2021, are substantially similar. However,
Medicare tax on the qualified sick and family leave wages. the Infrastructure Investment and Jobs Act (Infrastructure
• Governmental employers (except for the federal Act) amends section 3134 of the Internal Revenue Code,
government and its agencies and instrumentalities unless as enacted under the ARP, to limit the availability of the
described in section 501(c)(1)) may now claim the credits. employee retention credit in the fourth quarter of 2021 to
• Generally, the same wages can’t be used as both employers that are recovery startup businesses, as
qualified sick leave wages and qualified family leave defined in section 3134(c)(5). Thus, for wages paid after
wages. Additionally, you may not benefit from both the September 30, 2021, and before January 1, 2022, only
credit for qualified sick and family leave wages and the the wages paid by recovery startup businesses can be
employee retention credit with respect to the same wages. qualified wages as described in these instructions. See
The credit for qualified sick leave wages and qualified Recovery startup business, later, for more information
family leave wages doesn't apply to wages taken into about a recovery startup business.
account as payroll costs for a Small Business Interruption Qualified wages for the employee retention credit under
Loan under the Paycheck Protection Program (PPP) that section 3134 don't include wages taken into account for
is forgiven or in connection with shuttered operator grants credits under sections 41, 45A, 45P, 45S, 51, 1396, 3131,
and restaurant revitalization grants. and 3132. Additionally, qualified wages for the employee
• The credit for qualified sick and family leave wages isn’t retention credit can't include amounts used as payroll
allowed if the employer provides the leave in a manner costs for a Small Business Interruption Loan under the
that discriminates in favor of highly compensated PPP that is forgiven or amounts used as payroll costs for
employees, full-time employees, or employees on the shuttered operator grants and restaurant revitalization
basis of employment tenure. See Highly compensated grants.
employee, later, for the definition. For wages paid before July 1, 2021, the nonrefundable
How you report qualified sick and family leave wages portion of the employee retention credit is against the
and the credit for qualified sick and family leave wages employer share of social security tax. However, for wages
has changed. Taxable qualified sick and family leave paid after June 30, 2021, the nonrefundable portion of the
wages for leave taken after March 31, 2021, and before employee retention credit is against the employer share of
October 1, 2021, are included on line 4a and taxed at Medicare tax. The nonrefundable portion of the credit is
12.4% for social security tax purposes. However, if you’re still claimed on line 8c and, if applicable, the refundable
reporting any qualified sick and family leave wages for portion of the credit is still claimed on line 10e. For more
leave taken before April 1, 2021, these wages are information, see the instructions for line 8c and line 10e,
reported on lines 4a(i) and 4a(ii), respectively, and taxed later. Use Worksheet 2 to figure the credit for wages paid
at 6.2% for social security tax purposes. For leave taken before July 1, 2021. Use Worksheet 4 to figure the credit
before April 1, 2021, the credit for qualified sick and family for wages paid after June 30, 2021, and before January 1,
leave wages is reported on line 8b (nonrefundable 2022.
portion) and, if applicable, line 10d (refundable portion). See Notice 2021-23, 2021-16 I.R.B. 1113, available at
For leave taken after March 31, 2021, and before October IRS.gov/irb/2021-16_IRB#NOT-2021-23, for guidance on
1, 2021, the credit for qualified sick and family leave the employee retention credit provided under section
wages is reported on line 8d (nonrefundable portion) and, 2301 of the CARES Act, as amended by section 207 of
if applicable, line 10f (refundable portion); and the the Taxpayer Certainty and Disaster Tax Relief Act of
nonrefundable portion of the credit is against the employer 2020, for qualified wages paid after December 31, 2020,
share of Medicare tax. For more information, see the and before July 1, 2021. See Notice 2021-49, 2021-34
instructions for line 8b, line 8d, line 10d, and line 10f, later. I.R.B. 316, available at IRS.gov/irb/
Use Worksheet 1 to figure the credit for leave taken 2021-34_IRB#NOT-2021-49, for guidance on the
before April 1, 2021. Use Worksheet 3 to figure the credit employee retention credit provided under the ARP for
-2- Instructions for Form 944 (2021)
wages paid after June 30, 2021, and before January 1, credit for the fourth quarter of 2021 may have already
2022. Notice 2021-49 also discusses miscellaneous submitted Form 7200 to request an advance payment of
issues that apply to all of 2021. See Notice 2021-65, the employee retention credit for the fourth quarter of
2021-51 I.R.B. 880, available at IRS.gov/ 2021. If the Form 7200 hasn't been processed, the IRS
2021-51_IRB#NOT-2021-65, for modifications to Notice will use the employer's indication of whether it is a
2021-49 under the Infrastructure Act. For more recovery startup business (Form 7200, Part 1, line H) as
information about the employee retention credit, go to part of the determination regarding whether the Form
IRS.gov/ERC. 7200 claiming the employee retention credit in the fourth
New credit for COBRA premium assistance pay- quarter of 2021 should be accepted or rejected. A refund
ments. Section 9501 of the ARP provides for COBRA or credit of any portion of the employee retention credit to
premium assistance in the form of a full reduction in the a taxpayer in excess of the amount to which the taxpayer
premium otherwise payable by certain individuals and is entitled is an erroneous refund that the employer must
their families who elect COBRA continuation coverage repay, regardless of whether the refund or credit is
due to a loss of coverage as the result of a reduction in advanced. Accordingly, if an employer requested and
hours or an involuntary termination of employment received an advance payment of the employee retention
(assistance eligible individuals). This COBRA premium credit for the fourth calendar quarter of 2021, and the
assistance is available for periods of coverage beginning employer isn't a recovery startup business, the employer
on or after April 1, 2021, through periods of coverage isn't eligible for an employee retention credit and must
beginning on or before September 30, 2021. Some repay the amount of the advance. Employers who need to
multiemployer plans and insurers don't normally file an repay excess advance payments of the employee
employment tax return but will need to file one if they want retention credit must do so by January 31, 2022, by
to claim the COBRA premium assistance credit. In those including the advance payment on their 2021 Form 944,
cases, the insurers may not seek the COBRA premium Part 1, line 10i, and paying any balance due by January
assistance credit using a Form 944 and must do so using 31, 2022.
Form 941. Deferral of the employer share of social security tax
Section 9501(b) of the ARP adds new section 6432 to expired. The CARES Act allowed employers to defer the
the Internal Revenue Code that allows a credit (COBRA deposit and payment of the employer share of social
premium assistance credit) against the employer share of security tax. The deferred amount of the employer share
Medicare tax in an amount equal to the premiums not paid of social security tax was only available for deposits due
by assistance eligible individuals for COBRA continuation on or after March 27, 2020, and before January 1, 2021,
coverage by reason of section 9501(a)(1) of the ARP. The as well as deposits and payments due after January 1,
nonrefundable portion of the credit is reported on line 8e 2021, that are required for wages paid on or after March
and, if applicable, the refundable portion of the credit is 27, 2020, and before January 1, 2021. Therefore, the line
reported on line 10g. If you claim this credit, you must also previously used for the employer deferral has been
report the number of individuals provided COBRA “Reserved for future use.” One-half of the employer share
premium assistance on line 8f. Use Worksheet 5 to figure of social security tax is due by December 31, 2021, and
the credit. For more information, see the instructions for the remainder is due by December 31, 2022. Because
line 8e, line 8f, and line 10g, later. For more information on both December 31, 2021, and December 31, 2022, are
COBRA premium assistance payments and the credit, nonbusiness days, payments made on the next business
see Notice 2021-31, 2021-23 I.R.B. 1173, available at day will be considered timely. Any payments or deposits
IRS.gov/irb/2021-23_IRB#NOT-2021-31, and Notice you make before December 31, 2021, are first applied
2021-46, 2021-33 I.R.B. 303, available at IRS.gov/irb/ against your payment due on December 31, 2021, and
2021-33_IRB#NOT-2021-46. then applied against your payment due on December 31,
2022. For more information about the deferral of
Advance payment of COVID-19 credits extended. employment tax deposits, go to IRS.gov/ETD. See Paying
Based on the extensions of the credit for qualified sick the deferred amount of the employer share of social
and family leave wages and the employee retention credit, security tax and How to pay the deferred amount of the
and the new credit for COBRA premium assistance employer and employee share of social security tax, later,
payments, discussed above, Form 7200, Advance for information about paying the deferred amount of the
Payment of Employer Credits Due to COVID-19, may be employer share of social security tax.
filed to request an advance payment. For more
information, including information on which employers are Deferral of the employee share of social security tax
eligible to request an advance payment, the deadlines for expired. The Presidential Memorandum on Deferring
requesting an advance, and the amount that can be Payroll Tax Obligations in Light of the Ongoing COVID-19
advanced, see the Instructions for Form 7200. Disaster, issued on August 8, 2020, directed the
Secretary of the Treasury to defer the withholding,
The Infrastructure Act amends section 3134 of the
deposit, and payment of the employee share of social
Internal Revenue Code, as enacted under the ARP, to
security tax on wages paid during the period from
limit the availability of the employee retention credit in the
September 1, 2020, through December 31, 2020. The
fourth quarter of 2021 to employers that are recovery
deferral of the withholding and payment of the employee
startup businesses, as defined in section 3134(c)(5). See
share of social security tax was available for employees
Recovery startup business, later, for more information
whose social security wages paid for a biweekly pay
about a recovery startup business. Some employers that
period were less than $4,000, or the equivalent threshold
are no longer eligible to claim the employee retention
Instructions for Form 944 (2021) -3-
amount for other pay periods. The line previously used for Paying the deferred amount of the employee share of
the employee deferral has been “Reserved for future use.” social security tax. The due date for the withholding
The COVID-related Tax Relief Act of 2020 defers the due and payment of the employee share of social security tax
date for the withholding and payment of the employee is postponed until the period beginning on January 1,
share of social security tax until the period beginning on 2021, and ending on December 31, 2021. The employer
January 1, 2021, and ending on December 31, 2021. For must withhold and pay the total deferred employee share
more information about the deferral of employee social of social security tax ratably from wages paid to the
security tax, see Notice 2020-65, 2020-38 I.R.B. 567, employee between January 1, 2021, and December 31,
available at IRS.gov/irb/2020-38_IRB#NOT-2020-65, and 2021. If necessary, the employer may make arrangements
Notice 2021-11, 2021-06 I.R.B. 827, available at to otherwise collect the total deferred taxes from the
IRS.gov/irb/2021-06_IRB#NOT-2021-11. Also see Paying employee. The employer is liable to pay the deferred
the deferred amount of the employee share of social taxes to the IRS and must do so before January 1, 2022,
security tax and How to pay the deferred amount of the to avoid interest, penalties, and additions to tax on those
employer and employee share of social security tax, later, amounts. Because January 1, 2022, is a nonbusiness
for information about paying the deferred amount of the day, payments made on January 3, 2022, will be
employee share of social security tax. considered timely. Payment of the deferral isn't reported
New payroll tax credit for certain tax-exempt organi- on Form 944. For more information about the deferral of
zations affected by qualified disasters. Section 303(d) the employee share of social security tax, see Notice
of the Taxpayer Certainty and Disaster Tax Relief Act of 2020-65 and Notice 2021-11.
2020 allows for a new payroll tax credit for certain How to pay the deferred amount of the employer and
tax-exempt organizations affected by certain qualified employee share of social security tax. You may pay
disasters not related to COVID-19. This new credit will be the amount you owe electronically using the Electronic
claimed on new Form 5884-D (not on Form 944). Form Federal Tax Payment System (EFTPS), by credit or debit
5884-D is filed after the Form 944 for the year for which card, or by a check or money order. The preferred method
the credit is being claimed has been filed. If you will claim of payment is EFTPS. For more information, go to
this credit on Form 5884-D for 2021 and you're also EFTPS.gov, or call 800-555-4477 or 800-733-4829
claiming a credit for qualified sick and family leave wages (TDD). To pay the deferred amount using EFTPS, select
for leave taken before April 1, 2021, and/or the employee Form 944, calendar year 2020, and the option to pay the
retention credit for qualified wages paid before July 1, deferred amount.
2021, you must include any credit that will be claimed on
To pay by credit or debit card, go to IRS.gov/
Form 5884-D on Worksheet 1 and/or Worksheet 2,
PayByCard. If you pay by check or money order, include a
respectively. For more information about this credit, go to
2020 Form 944-V, Payment Voucher. The 2020 Form
IRS.gov/Form5884D.
944-V is on page 5 of Form 944 and is available at
Reminders IRS.gov/Form944 (select the link for “All Form 944
Revisions” under “Other Items You May Find Useful”).
Paying the deferred amount of the employer share of Make the check or money order payable to “United States
social security tax. One-half of the employer share of Treasury.” Enter your EIN, “Form 944,” and “2020” on your
social security tax is due by December 31, 2021, and the check or money order.
remainder is due by December 31, 2022. Because both
Payments should be sent to:
December 31, 2021, and December 31, 2022, are
nonbusiness days, payments made on the next business
Department of the Treasury Department of the Treasury
day will be considered timely. Any payments or deposits
you make before December 31, 2021, are first applied Internal Revenue Service or Internal Revenue Service
against your payment due on December 31, 2021, and Ogden, UT 84201-0030 Kansas City, MO 64999-0030
then applied against your payment due on December 31,
2022. For example, if your employer share of social Send your payment to the address above that is in the
security tax for 2020 was $20,000 and you deposited same state as the address to which you would mail
$5,000 of the $20,000 during 2020 and deferred $15,000 returns filed without a payment, as shown under Where
on Form 944, line 10b, then you must pay $5,000 by Should You File, later. For more information about the
December 31, 2021, and $10,000 by December 31, 2022. deferral of social security tax, go to IRS.gov/ETD and see
However, if your employer share of social security tax for Notice 2020-65 and Notice 2021-11.
2020 was $20,000 and you deposited $15,000 of the
$20,000 during 2020 and deferred $5,000 on Form 944, Qualified small business payroll tax credit for in-
line 10b, then you don’t need to pay any deferred amount creasing research activities. For tax years beginning
by December 31, 2021, because 50% of the amount that after 2015, a qualified small business may elect to claim
could have been deferred ($10,000) has already been up to $250,000 of its credit for increasing research
paid and is first applied against your payment that would activities as a payroll tax credit against the employer
be due on December 31, 2021. Accordingly, you must pay share of social security tax. The payroll tax credit election
the $5,000 deferral by December 31, 2022. Payment of must be made on or before the due date of the originally
the deferral isn't reported on Form 944. For additional filed income tax return (including extensions). The portion
information, go to IRS.gov/ETD. of the credit used against the employer share of social
security tax is allowed in the first calendar quarter
beginning after the date that the qualified small business
-4- Instructions for Form 944 (2021)
filed its income tax return. The first Form 944 that you • 303-967-5916 if you're outside the United States (toll
could claim this credit on was Form 944 filed for calendar call)
year 2017. The election and determination of the credit Additional information about EFTPS is also available in
amount that will be used against the employer share of Pub. 966 or Pub. 966 (SP).
social security tax are made on Form 6765, Credit for For an EFTPS deposit to be on time, you must
Increasing Research Activities. The amount from Form submit the deposit by 8 p.m. Eastern time the day
6765, line 44, must then be reported on Form 8974, !
CAUTION before the date the deposit is due.
Qualified Small Business Payroll Tax Credit for Increasing
Research Activities. Form 8974 is used to determine the Same-day wire payment option. If you fail to submit a
amount of the credit that can be used in the current year. deposit transaction on EFTPS by 8 p.m. Eastern time the
The amount from Form 8974, line 12, is reported on Form day before the date a deposit is due, you can still make
944, line 8a. If you’re claiming the research payroll tax your deposit on time by using the Federal Tax Collection
credit on your Form 944, you must attach Form 8974 to Service (FTCS) to make a same-day wire payment. To
Form 944. For more information about the payroll tax use the same-day wire payment method, you will need to
credit, see Notice 2017-23, 2017-16 I.R.B. 1100, available make arrangements with your financial institution ahead of
at IRS.gov/irb/2017-16_IRB#NOT-2017-23, and IRS.gov/ time. Please check with your financial institution regarding
ResearchPayrollTC. Also see Adjusting tax liability for availability, deadlines, and costs. Your financial institution
nonrefundable credits claimed on lines 8a, 8b, 8c, 8d, and may charge you a fee for payments made this way. To
8e, later. learn more about the information you will need to give
your financial institution to make a same-day wire
Work opportunity tax credit for qualified tax-exempt
payment, go to IRS.gov/SameDayWire.
organizations hiring qualified veterans. Qualified
tax-exempt organizations that hire eligible unemployed Timeliness of federal tax deposits. If a deposit is
veterans may be able to claim the work opportunity tax required to be made on a day that isn't a business day, the
credit against their payroll tax liability using Form 5884-C. deposit is considered timely if it is made by the close of
For more information, go to IRS.gov/WOTC. the next business day. A business day is any day other
than a Saturday, Sunday, or legal holiday. The term “legal
Employers can request to file Forms 941, 941-SS, or holiday” for deposit purposes includes only those legal
941-PR instead of Form 944. Employers required to file holidays in the District of Columbia. Legal holidays in the
Form 944, who want to file Forms 941, 941-SS, or 941-PR District of Columbia are provided in Pub. 15, Pub. 80, and
instead, must contact the IRS to request to file quarterly Pub. 179.
Forms 941, 941-SS, or 941-PR and opt out of filing Form
944. See What if You Want To File Forms 941, 941-SS, or Electronic filing and payment. Businesses can enjoy
941-PR Instead of Form 944, later. the benefits of filing tax returns and paying their federal
taxes electronically. Whether you rely on a tax
Correcting a previously filed Form 944. If you professional or handle your own taxes, the IRS offers you
discover an error on a previously filed Form 944, make the convenient programs to make filing and paying easier.
correction using Form 944-X. Form 944-X is filed Spend less time worrying about taxes and more time
separately from Form 944. For more information, see the running your business. Use e-file and EFTPS to your
Instructions for Form 944-X, section 13 of Pub. 15, or go benefit.
to IRS.gov/CorrectingEmploymentTaxes. • For e-file, go to IRS.gov/EmploymentEfile for more
Federal tax deposits must be made by electronic information. A fee may be charged to file electronically.
funds transfer (EFT). You must use EFT to make all • For EFTPS, go to EFTPS.gov or call EFTPS at one of
federal tax deposits. Generally, an EFT is made using the numbers provided under Federal tax deposits must be
EFTPS. If you don't want to use EFTPS, you can arrange made by electronic funds transfer (EFT), earlier.
for your tax professional, financial institution, payroll • For electronic filing of Forms W-2, Wage and Tax
service, or other trusted third party to make electronic Statement, go to SSA.gov/employer. You may be required
deposits on your behalf. Also, you may arrange for your to file Forms W-2 electronically. For details, see the
financial institution to initiate a same-day wire payment on General Instructions for Forms W-2 and W-3.
your behalf. EFTPS is a free service provided by the If you’re filing your tax return or paying your
Department of the Treasury. Services provided by your federal taxes electronically, a valid employer
tax professional, financial institution, payroll service, or
!
CAUTION identification number (EIN) is required at the time
other third party may have a fee. the return is filed or the payment is made. If a valid EIN
For more information on making federal tax deposits, isn't provided, the return or payment won't be processed.
see section 11 of Pub. 15; section 8 of Pub. 80, Federal This may result in penalties. See Employer identification
Tax Guide for Employers in the U.S. Virgin Islands, Guam, number (EIN), later, for information about applying for an
American Samoa, and the Commonwealth of the Northern EIN.
Mariana Islands; or section 11 of Pub. 179, Guía
Electronic funds withdrawal (EFW). If you file Form
Contributiva Federal para Patronos Puertorriqueños. To
944 electronically, you can e-file and use EFW to pay the
get more information about EFTPS or to enroll in EFTPS,
balance due in a single step using tax preparation
go to EFTPS.gov or call one of the following numbers.
software or through a tax professional. However, don't use
• 800-555-4477 EFW to make federal tax deposits. For more information
• 800-733-4829 (TDD) on paying your taxes using EFW, go to IRS.gov/EFW.
• 800-244-4829 (Spanish)
Instructions for Form 944 (2021) -5-
Credit or debit card payments. You can pay the If you want more in-depth information about payroll tax
balance due shown on Form 944 by credit or debit card. topics relating to Form 944, see Pub. 15, Pub. 80, or Pub.
Your payment will be processed by a payment processor 179, and go to IRS.gov/EmploymentTaxes.
who will charge a processing fee. Don't use a credit or Federal law requires you, as an employer, to withhold
debit card to make federal tax deposits. For more certain taxes from your employees' pay. Each time you
information on paying your taxes with a credit or debit pay wages, you must withhold—or take out of your
card, go to IRS.gov/PayByCard. employees' pay—certain amounts for federal income tax,
Online payment agreement. You may be eligible to social security tax, and Medicare tax. You must also
apply for an installment agreement online if you can’t pay withhold Additional Medicare Tax from wages you pay to
the full amount of tax you owe when you file your return. an employee in excess of $200,000 in a calendar year.
For more information, see What if you can't pay in full, Under the withholding system, taxes withheld from your
later. employees are credited to your employees in payment of
their tax liabilities.
Paid preparers. If you use a paid preparer to complete
Form 944, the paid preparer must complete and sign the References to federal income tax withholding
paid preparer's section of the form. ! don't apply to employers in American Samoa,
CAUTION Guam, the Commonwealth of the Northern
Outsourcing payroll duties. You’re responsible to Mariana Islands, the U.S. Virgin Islands, and Puerto Rico,
ensure that tax returns are filed and deposits and unless you have employees who are subject to U.S.
payments are made, even if you contract with a third party income tax withholding.
to perform these acts. You remain responsible if the third
party fails to perform any required action. Before you Federal law also requires you to pay any liability for the
choose to outsource any of your payroll and related tax employer share of social security tax and Medicare tax.
duties (that is, withholding, reporting, and paying over This share of social security tax and Medicare tax isn't
social security, Medicare, FUTA, and income taxes) to a withheld from employees.
third-party payer, such as a payroll service provider or
reporting agent, go to IRS.gov/OutsourcingPayrollDuties For more information about annual employment tax
for helpful information on this topic. For more information filing and tax deposit rules, see Treasury Decision 9566,
on the different types of third-party payer arrangements, 2012-8 I.R.B. 389, at IRS.gov/irb/2012-08_IRB#TD-9566.
see section 16 of Pub. 15.
Who Must File Form 944?
Where can you get telephone help? For answers to
your questions about completing Form 944 or tax deposit In general, if the IRS has notified you to file Form 944, you
rules, call the IRS at one of the numbers listed below. must file Form 944 instead of Forms 941, 941-SS, or
• 800-829-4933 (Business and Specialty Tax Line) or 941-PR to report the following amounts.
800-829-4059 (TDD/TTY for persons who are deaf, hard • Wages you have paid.
of hearing, or have a speech disability), Monday–Friday • Tips your employees reported to you.
from 7:00 a.m. to 7:00 p.m. local time (Alaska and Hawaii • Federal income tax you withheld.
follow Pacific time; employers in Puerto Rico receive • Both the employer and the employee share of social
service from 8:00 a.m. to 8:00 p.m. local time). security and Medicare taxes.
• 267-941-1000 if you're outside the United States (toll • Additional Medicare Tax withheld from employees.
call), Monday–Friday from 6:00 a.m. to 11:00 p.m. Eastern • Current year's adjustments to social security and
time. Medicare taxes for fractions of cents, sick pay, tips, and
Photographs of missing children. The IRS is a proud group-term life insurance.
partner with the National Center for Missing & Exploited • Qualified small business payroll tax credit for increasing
Children® (NCMEC). Photographs of missing children research activities.
selected by the Center may appear in instructions on • Credit for qualified sick and family leave wages.
pages that would otherwise be blank. You can help bring • Employee retention credit.
these children home by looking at the photographs and • COBRA premium assistance credit.
calling 1-800-THE-LOST (1-800-843-5678) if you • Total advances received from filing Form(s) 7200.
recognize a child. If you received notification to file Form 944, you must
file Form 944 to report your social security, Medicare, and
General Instructions withheld federal income taxes for the 2021 calendar year
unless you called the IRS between January 1, 2021, and
Purpose of Form 944 April 1, 2021, or sent a written request postmarked
Form 944 is designed so the smallest employers (those between January 1, 2021, and March 15, 2021, to request
whose annual liability for social security, Medicare, and to file Forms 941, 941-SS, or 941-PR quarterly instead
withheld federal income taxes is $1,000 or less) will file and received written confirmation that your filing
and pay these taxes only once a year instead of every requirement was changed. You must file Form 944 even if
quarter. These instructions give you some background you have no taxes to report (or you have taxes in excess
information about Form 944. They tell you who must file of $1,000 to report) unless you filed a final return for the
Form 944, how to complete it line by line, and when and prior year. See If Your Business Has Closed..., later. Also
where to file it. see What if You Want To File Forms 941, 941-SS, or
941-PR Instead of Form 944, later.
-6- Instructions for Form 944 (2021)
If the IRS notified you in writing to file Form 944, request to file those forms. To request to file quarterly
! you must file Form 944 (and not Forms 941, Forms 941, 941-SS, or 941-PR to report your social
CAUTION 941-SS, or 941-PR) even if your tax liability for security, Medicare, and withheld federal income taxes for
2021 exceeds $1,000. Once your annual tax liability the 2022 calendar year, call the IRS at 800-829-4933
exceeds $1,000, the IRS will notify you that you're no (267-941-1000 (toll call) if you're outside the United
longer eligible to file Form 944 in future years and that you States) between January 1, 2022, and April 1, 2022, or
must file Form 941, 941-SS, or 941-PR quarterly. send a written request postmarked between January 1,
However, until you receive the notice, continue to file 2022, and March 15, 2022. Written requests should be
Form 944 annually. If you’re unsure of your current filing sent to:
requirement, call 800-829-4933. If you're outside the
United States, call 267-941-1000 (toll call). Department of the Treasury Department of the Treasury
Internal Revenue Service or Internal Revenue Service
What if You Want To File Form 944 in Future Ogden, UT 84201-0038 Cincinnati, OH 45999-0038
Years Instead of Forms 941, 941-SS, or 941-PR?
If you haven't received notification to file Form 944 for
If you would mail your return filed without a payment to
2022 but estimate your employment tax liability for
Ogden, as shown under Where Should You File, later,
calendar year 2022 will be $1,000 or less and would like
send your request to the Ogden address shown above. If
to file Form 944 instead of Forms 941, 941-SS, or 941-PR,
you would mail your return filed without a payment to
you can contact the IRS to request to file Form 944 for
Kansas City, send your request to the address for
2022. To file Form 944 for calendar year 2022, you must
Cincinnati shown above. After you contact the IRS, the
call the IRS at 800-829-4933 (267-941-1000 (toll call) if
IRS will send you a written notice that your filing
you're outside the United States) between January 1,
requirement has been changed. If you don't receive this
2022, and April 1, 2022, or send a written request
notice, you must file Form 944 for calendar year 2022. For
postmarked between January 1, 2022, and March 15,
more information about these procedures, see Rev. Proc.
2022. The mailing addresses for written requests are
2009-51, 2009-45 I.R.B. 625, available at IRS.gov/irb/
provided under What if You Want To File Forms 941,
2009-45_IRB#RP-2009-51.
941-SS, or 941-PR Instead of Form 944, later. The IRS
will send you a written notice that your filing requirement Who Can't File Form 944?
has been changed to Form 944. If you don't receive this
The following employers can't file Form 944.
notice, you must file Forms 941, 941-SS, or 941-PR for
calendar year 2022. • Employers who aren't notified. If the IRS doesn't
notify you to file Form 944, don't file Form 944. If you
New Employers would like to file Form 944 instead of Forms 941, 941-SS,
New employers are also eligible to file Form 944 if they or 941-PR, see What if You Want To File Form 944 in
will meet the eligibility requirements. New employers filing Future Years Instead of Forms 941, 941-SS, or 941-PR,
Form SS-4, Application for Employer Identification earlier.
Number, or Form SS-4PR, Solicitud de Número de • Household employers. If you employ only household
Identificación Patronal (EIN), must complete line 13 of employees, don't file Form 944. For more information, see
Form SS-4 or SS-4PR, indicating the highest number of Pub. 926 and Schedule H (Form 1040), or Pub. 179 and
employees expected in the next 12 months, and must Schedule H-PR.
check the box on line 14 of Form SS-4 or SS-4PR to • Agricultural employers. If you employ only
indicate whether they expect to have $1,000 or less in agricultural employees, don't file Form 944. For more
employment tax liability for the calendar year and would information, see Pub. 51 and Form 943, or Pub. 179 and
like to file Form 944. Based on current tax rates, if you pay Form 943-PR.
$5,000 or less in wages subject to social security and
Medicare taxes and federal income tax withholding during What if You Reorganize or Close Your
the calendar year, you’re generally likely to pay $1,000 or Business?
less in employment taxes. Generally, if you’re an If You Sell or Transfer Your Business...
employer in Puerto Rico, American Samoa, Guam, the
If you sell or transfer your business during the year, you
Commonwealth of the Northern Mariana Islands, or the
and the new owner must each file a Form 944, 941,
U.S. Virgin Islands and you pay $6,536 or less in wages
941-SS, or 941-PR, whichever is required, for the year in
subject to social security and Medicare taxes during the
which the transfer occurred. Report only the wages you
calendar year, you’re likely to pay $1,000 or less in
paid.
employment taxes. New employers are advised of their
employment tax filing requirement when they are issued When two businesses merge, the continuing firm must
their EINs. file a return for the year in which the change took place
and the other firm should file a final return.
What if You Want To File Forms 941, 941-SS, or
941-PR Instead of Form 944? Changing from one form of business to another—such
You must file Form 944 if the IRS has notified you to do as from a sole proprietorship to a partnership or
so, unless the IRS notifies you to file quarterly Forms 941, corporation—is considered a transfer. If a transfer occurs,
941-SS, or 941-PR instead, or you contact the IRS to you may need a new EIN. See Pub. 1635 and section 1 of
Pub. 15 for more information.
Instructions for Form 944 (2021) -7-
Attach a statement to your return with all the following If you use a tax preparer to complete Form 944, make
information. sure the preparer uses your correct business name and
EIN.
• The new owner's name (or the new name of the Employer identification number (EIN). To make sure
business). that businesses comply with federal tax laws, the IRS
• Whether the business is now a sole proprietorship, monitors tax filings and payments by using a numerical
partnership, or corporation. system to identify taxpayers. A unique nine-digit EIN is
• The kind of change that occurred (a sale or transfer). assigned to all corporations, partnerships, and some sole
• The date of the change. proprietors. Businesses needing an EIN must apply for a
• The name of the person keeping the payroll records number and use it throughout the life of the business on all
and the address where those records will be kept. tax returns, payments, and reports.
Your business should have only one EIN. If you have
If Your Business Has Closed...
more than one and aren't sure which one to use, write to
If you permanently go out of business or stop paying the IRS office where you file your returns (using the
wages to your employees, you must file a final return. To Without a payment address under Where Should You
tell the IRS that Form 944 for a particular year is your final File, later) or call the IRS at 800-829-4933. If you're
return, check the box on line 14 and enter the final date outside the United States, call 267-941-1000 (toll call).
you paid wages. Also attach a statement to your return If you don't have an EIN, you may apply for one online
showing the name of the person keeping the payroll by visiting IRS.gov/EIN. You may also apply for an EIN by
records and the address where those records will be kept. faxing or mailing Form SS-4 or SS-4PR to the IRS. If the
principal business was created or organized outside of the
If you participated in a statutory merger or United States or U.S. territories, you may also apply for an
consolidation, or qualify for predecessor-successor status EIN by calling 267-941-1099 (toll call). If you have applied
due to an acquisition, you should generally file for an EIN but don't have your EIN by the time a return is
Schedule D (Form 941), Report of Discrepancies Caused due, file a paper return and write “Applied For” and the
by Acquisitions, Statutory Mergers, or Consolidations. date you applied in the space shown for the number.
See the Instructions for Schedule D (Form 941) to
determine whether you should file Schedule D (Form 941) If you’re filing your tax return electronically, a valid
and when you should file it. ! EIN is required at the time the return is filed. If a
CAUTION valid EIN isn't provided, the return won't be
When Must You File? accepted. This may result in penalties.
For 2021, file Form 944 by January 31, 2022. However, if Always be sure the EIN on the form you file
you made deposits on time in full payment of the taxes TIP exactly matches the EIN the IRS assigned to your
due for the year, you may file the return by February 10, business. Don't use your SSN or ITIN on forms
2022. that ask for an EIN. If you used an EIN (including a prior
owner's EIN) on Form 944 that is different from the EIN
File Form 944 only once for each calendar year. If you reported on Form W-3, see Box h—Other EIN used this
filed Form 944 electronically, don't file a paper Form 944. year in the General Instructions for Forms W-2 and W-3.
For more information about filing Form 944 electronically, Filing a Form 944 with an incorrect EIN or using another
see Electronic filing and payment, earlier. business's EIN may result in penalties and delays in
If we receive Form 944 after the due date, we will treat processing your return.
Form 944 as filed on time if the envelope containing Form
If you change your business name, business ad-
944 is properly addressed, contains sufficient postage,
dress, or responsible party. Notify the IRS immediately
and is postmarked by the U.S. Postal Service on or before
if you change your business name, business address, or
the due date, or sent by an IRS-designated private
responsible party.
delivery service (PDS) on or before the due date. If you
don't follow these guidelines, we will generally consider
• Write to the IRS office where you file your returns (using
the Without a payment address under Where Should You
Form 944 filed when it is actually received. For more
File, later) to notify the IRS of any business name change.
information about PDSs, see Where Should You File,
See Pub. 1635 to see if you need to apply for a new EIN.
later.
• Complete and mail Form 8822-B to notify the IRS of a
How Should You Complete Form 944? business address or responsible party change. Don't mail
Form 8822-B with your Form 944. For a definition of
Enter your EIN, name, and address in the spaces "responsible party," see the Instructions for Form SS-4.
provided. Also enter your name and EIN at the top of
pages 2 and 3. Don't use your social security number Completing and Filing Form 944
(SSN) or individual taxpayer identification number (ITIN). Make entries on Form 944 as follows to enable accurate
Generally, enter the business (legal) name that you used processing.
when you applied for your EIN. For example, if you’re a
sole proprietor, enter “Tyler Smith” on the Name line and • Use 12-point Courier font (if possible) for all entries if
“Tyler's Cycles” on the Trade name line. Leave the Trade you’re typing or using a computer to complete Form 944.
name line blank if it is the same as your Name line. Portable Document Format (PDF) forms on IRS.gov have
fillable fields with acceptable font specifications.
-8- Instructions for Form 944 (2021)
• Don't enter dollar signs and decimal points. Commas IRS mailing address to use if you’re using a PDS, go to
are optional. Report dollars to the left of the preprinted IRS.gov/PDSstreetAddresses. Select the mailing address
decimal point and cents to the right of it. Don’t round listed on the webpage that is in the same state as the
entries to whole dollars. Always show an amount for address to which you would mail returns filed without a
cents, even if it is zero. payment, as shown next.
• Leave blank any data field with a value of zero (except Without a
line 9). If you’re in . . . payment . . . With a payment . . .
• Enter negative amounts using a minus sign (if possible). Connecticut New Jersey Department of the Internal Revenue
Delaware New York Treasury Service
Otherwise, use parentheses. District of North Carolina Internal Revenue P.O. Box 806532
• Enter your name and EIN on all pages. Columbia Ohio Service Cincinnati, OH
• Enter your name, EIN, “Form 944,” and tax period on all Georgia Pennsylvania Kansas City, MO 45280-6532
attachments. Illinois Rhode Island 64999-0044
• Staple multiple sheets in the upper left corner when Indiana
Kentucky
South Carolina
Tennessee
filing. Maine Vermont
Maryland Virginia
Complete all three pages. You must complete all three Massachusetts West Virginia
pages of Form 944 and sign on page 3. Failure to do so Michigan Wisconsin
may delay processing of your return. New Hampshire
Alabama Missouri Department of the Internal Revenue
Required Notice to Employees About the Alaska Montana Treasury Service
Earned Income Credit (EIC) Arizona Nebraska Internal Revenue P.O. Box 932100
Arkansas Nevada Service Louisville, KY
To notify employees about the EIC, employers in the California New Mexico Ogden, UT 40293-2100
United States must give the employees one of the Colorado North Dakota 84201-0044
following items. Florida Oklahoma
• Form W-2 which has the required information about the Hawaii Oregon
Idaho South Dakota
EIC on the back of Copy B. Iowa Texas
• A substitute Form W-2 with the same EIC information Kansas Utah
on the back of the employee's copy that is on the back of Louisiana Washington
Copy B of the IRS Form W-2. Minnesota Wyoming
• Notice 797, Possible Federal Tax Refund Due to the Mississippi
Earned Income Credit (EIC). No legal residence or principal Internal Revenue Internal Revenue
• Your written statement with the same wording as place of business in any state Service Service
P.O. Box 409101 P.O. Box 932100
Notice 797. Ogden, UT 84409 Louisville, KY
40293-2100
For more information, see section 10 of Pub. 15, Pub.
596, and IRS.gov/EIC. Special filing address for Department of the Internal Revenue
exempt organizations; federal, Treasury Service
Reconciling Form 944 and Form W-3, W-3SS, or state, and local governmental Internal Revenue P.O. Box 932100
entities; and Indian tribal Service Louisville, KY
W-3PR governmental entities, Ogden, UT 40293-2100
The IRS matches amounts reported on your Form 944 regardless of location 84201-0044
with Form W-2, W-2AS, W-2GU, W-2CM, W-2VI, or Form
499R-2/W-2PR amounts totaled on your Form W-3 or
W-3SS, Transmittal of Wage and Tax Statements, or Your filing address may have changed from that
Form W-3PR, Informe de Comprobantes de Retención. If ! used to file your employment tax return in prior
CAUTION years. Don't send Form 944 or any payments to
the amounts don't agree, you may be contacted by the
IRS or the SSA. The following amounts are reconciled. the Social Security Administration (SSA).
• Federal income tax withholding, if applicable. Must You Deposit Your Taxes?
• Social security wages.
• Social security tips. If your liability for withheld federal income tax and social
• Medicare wages and tips. security and Medicare taxes (Form 944, line 9) is less
than $2,500 for the year, you can pay the taxes with your
For more information, see section 12 of Pub. 15. return. To avoid a penalty, you should pay in full and file
Where Should You File? on time. You don't have to deposit the taxes. However,
you may choose to make deposits of these taxes even if
You’re encouraged to file Form 944 electronically. Go to your liability is less than $2,500. If your liability for these
IRS.gov/EmploymentEfile for more information on taxes is $2,500 or more, you’re generally required to
electronic filing. If you file a paper return, where you file deposit the taxes instead of paying them when you file
depends on whether you include a payment with Form Form 944. See the Federal Tax Deposit Requirements for
944. Mail your return to the address listed for your location Form 944 Filers chart, later. If you don't deposit the taxes
in the table that follows. when required, you may be subject to penalties and
interest.
PDSs can't deliver to P.O. boxes. You must use the
U.S. Postal Service to mail an item to a P.O. box address. The $2,500 threshold at which federal tax deposits
Go to IRS.gov/PDS for the current list of PDSs. For the must be made is different from the amount of annual tax
Instructions for Form 944 (2021) -9-
liability ($1,000 or less) that makes an employer eligible to requiring a next-day deposit is determined before you
file Form 944. Form 944 filers whose businesses grow consider any reduction of your liability for nonrefundable
during the year may be required to make federal tax credits. For more information, including an example, see
deposits (see chart next), but they will still file Form 944 frequently asked question 17 at IRS.gov/ETD.
for the year. Reducing your deposits for COVID-19 credits.
Employers eligible to claim the credit for qualified sick and
Federal Tax Deposit Requirements for Form 944 family leave wages, the employee retention credit, and/or
Filers the COBRA premium assistance credit can reduce their
deposits by the amount of their anticipated credits. You
If your tax liability is: Your deposit requirement is: may reduce your deposits of federal employment taxes in
Less than $2,500 for the year No deposit required. You may
anticipation of the COBRA premium assistance credit with
pay the tax with your return. If regard to a period of coverage as of the date you are
you’re unsure that your tax liability entitled to the credit. Employers won’t be subject to an
for the year will be less than FTD penalty for reducing their deposits if certain
$2,500, deposit under the rules conditions are met. See the instructions for line 8b,
below. line 8c, line 8d, and line 8e for more information on these
$2,500 or more for the year, but You can deposit by the last day of credits. For more information on reducing deposits, see
less than $2,500 for the quarter the month after the end of a Notice 2020-22, 2020-17 I.R.B. 664, available at
quarter. However, if your fourth IRS.gov/irb/2020-17_IRB#NOT-2020-22, and Notice
quarter tax liability is less than 2021-24, 2021-18 I.R.B. 1122, available at IRS.gov/irb/
$2,500, you may pay the fourth 2021-18_IRB#NOT-2021-24. See the instructions for
quarter's tax liability with Form
line 13, later, for instructions on how to adjust your tax
944.
liabilities reported on line 13 or Form 945-A for
$2,500 or more for the quarter You must deposit monthly or nonrefundable credits.
semiweekly depending on your
deposit schedule. But, if you
Due to the termination of the employee retention credit
accumulate $100,000 or more of for the fourth quarter of 2021 for employers that aren't
taxes on any day, you must recovery startup businesses, the IRS will no longer waive
deposit the tax by the next FTD penalties for employers that reduce deposits in
business day. See section 11 of anticipation of the employee retention credit after
Pub. 15, section 8 of Pub. 80, or December 20, 2021, unless the employer is a recovery
section 11 of Pub. 179. startup business. Some employers that are no longer
eligible to claim the employee retention credit for the
See section 11 of Pub. 15, section 8 of Pub. 80, or fourth quarter of 2021 may have already reduced their
section 11 of Pub. 179 for information about payments employment tax deposits in anticipation of claiming the
made under the accuracy of deposits rule. employee retention credit for the fourth quarter of 2021.
Note. When you make deposits depends on your deposit For deposits due on or before December 20, 2021, with
schedule, which is either monthly or semiweekly, respect to wages paid on or after October 1, 2021, an
depending on the amount of your tax liability during the employer that isn't a recovery startup business won't be
lookback period. The lookback period for Form 944 filers subject to an FTD penalty for the fourth quarter of 2021 if
is different from the lookback period for Form 941, the employer:
941-SS, and 941-PR filers, so your deposit schedule may • Reduced its deposits in anticipation of the employee
have changed. For more information, see section 11 of retention credit, consistent with the rules provided by
Pub. 15, section 8 of Pub. 80, or section 11 of Pub. 179. If section 3.b. of Notice 2021-24;
you're a monthly schedule depositor and accumulate a • Deposits the amounts initially retained in anticipation of
$100,000 tax liability on any day during the deposit period, the employee retention credit on or before the due date of
you become a semiweekly schedule depositor on the next the deposit for wages paid on December 31, 2021
day and remain so for at least the rest of the calendar year (regardless of whether wages are actually paid on that
and for the following calendar year. If you become a date); and
semiweekly schedule depositor under this rule solely as a • Reports the tax liability associated with the termination
result of the relief provided in Notice 2021-65 regarding of the employer's employee retention credit on their 2021
the early termination of the employee retention credit for Form 944, line 13l, or, if a semiweekly schedule depositor,
the fourth quarter of 2021, you may be converted back to on Form 945-A for the applicable day or days in
a monthly schedule depositor by contacting the IRS. You December. For more information, see the line 13
may continue to deposit in accordance with your status as instructions, later.
a monthly schedule depositor, but you may receive a Example. Reducing deposits for COBRA premium
system-generated failure-to-deposit (FTD) penalty notice assistance. Maple Co. has a semimonthly payroll period.
after you file your Form 944 for 2022. Contact the IRS at Sophie Rose elected COBRA premium assistance on
the toll-free number on your FTD penalty notice to request May 17, 2021. Maple Co. became entitled to a COBRA
abatement of the FTD penalty and to be converted back to premium assistance credit as of May 17, 2021, for the
a monthly schedule depositor. Aside from this exception, premiums not paid by Sophie (an assistance eligible
ordinary rules for determining deposit frequency will individual) for the periods of coverage of April 1, 2021,
continue to apply. The $100,000 tax liability threshold through April 30, 2021, and May 1, 2021, through May 31,
-10- Instructions for Form 944 (2021)
2021. Maple Co. could have reduced its federal
employment tax deposits as of May 17, 2021, in Specific Instructions
anticipation of the credit to which Maple Co. became
entitled. Part 1: Answer These Questions for
What About Penalties and Interest? This Year
Employers in American Samoa, Guam, the
Avoiding Penalties and Interest TIP Commonwealth of the Northern Mariana Islands,
You can avoid paying penalties and interest if you do all of the U.S. Virgin Islands, and Puerto Rico may skip
the following. lines 1 and 2, unless you have employees who are subject
to U.S. income tax withholding.
• Deposit or pay your taxes when they are due, unless
you meet the requirements discussed in Notice 2020-22
For purposes of these instructions, all references
and Notice 2021-24. See Notice 2021-65 for modifications
to Notice 2021-24 under the Infrastructure Act.
TIP to "sick pay" mean ordinary sick pay, not "qualified
sick leave wages" that are reported on line 4a(i)
• File your fully completed Form 944 on time. for leave taken before April 1, 2021, or reported on line 4a
• Report your tax liability accurately. for leave taken after March 31, 2021, and before October
• Submit valid checks for tax payments. 1, 2021.
• Give accurate Forms W-2, W-2AS, W-2GU, W-2CM,
W-2VI, or Form 499R-2/W-2PR to employees.
• File Form W-3, W-3SS, or W-3PR and Copies A of 1. Wages, Tips, and Other Compensation
Forms W-2, W-2AS, W-2GU, W-2CM, W-2VI, or Form Enter amounts on line 1 that would also be included in
499R-2/W-2PR with the SSA on time and accurately. Go box 1 of your employees' Forms W-2. See Box
to SSA.gov/employer for information on how to file Forms 1—Wages, tips, other compensation in the General
W-2 electronically. Instructions for Forms W-2 and W-3 for details. Include
sick pay paid by your agent. Also include sick pay paid by
Penalties and interest are charged on taxes paid late a third party that isn't your agent (for example, an
and returns filed late at a rate set by law. See sections 11 insurance company) if you were given timely notice of the
and 12 of Pub. 15, section 8 of Pub. 80, or section 11 of payments and the third party transferred liability for the
Pub. 179 for details. Use Form 843 to request abatement employer's taxes to you.
of assessed penalties or interest. Don't request
abatement of assessed penalties or interest on Form 944, If you're a third-party payer of sick pay and not an agent
944-X, 944-X (SP), 941-X, or 941-X (PR). of the employer, don't include sick pay that you paid to
policyholders' employees here if you gave the
If you receive a notice about a penalty after you file policyholders timely notice of the payments. See section 6
your return, reply to the notice with an explanation and we of Pub. 15-A, Employer's Supplemental Tax Guide, for
will determine if you meet reasonable-cause criteria. Don't more information about sick pay reporting and the
include an explanation when you file your return. procedures for transferring the liability to the employer.
If federal income, social security, and Medicare
taxes that must be withheld (that is, trust fund 2. Federal Income Tax Withheld From Wages,
!
CAUTION taxes) aren't withheld or aren't deposited or paid Tips, and Other Compensation
to the United States Treasury, the trust fund recovery Enter the federal income tax that you withheld (or were
penalty may apply. The penalty is 100% of the unpaid required to withhold) from your employees on this year's
trust fund tax. If these unpaid taxes can't be immediately wages, including qualified sick leave wages, qualified
collected from the employer or business, the trust fund family leave wages, and qualified wages (excluding
recovery penalty may be imposed on all persons who are qualified health plan expenses) for the employee retention
determined by the IRS to be responsible for collecting, credit; tips; taxable fringe benefits; and supplemental
accounting for, or paying over these taxes, and who acted unemployment compensation benefits. Don't include any
willfully in not doing so. For more information, see section income tax withheld by a third-party payer of sick pay
11 of Pub. 15, section 8 of Pub. 80, or section 11 of Pub. even if you reported it on Forms W-2. You will reconcile
179. The trust fund recovery penalty won't apply to any this difference on Form W-3. For information on the
amount of trust fund taxes an employer holds back in employment tax treatment of fringe benefits, see Pub.
anticipation of any credits they are entitled to. It also won't 15-B, Employer's Tax Guide to Fringe Benefits. For
apply to applicable taxes properly deferred under section information about supplemental unemployment
2302 of the CARES Act or applicable taxes deferred compensation benefits, see section 5 of Pub. 15-A.
under Notice 2020-65 and Notice 2021-11 if paid by the
due date. If you're a third-party payer of sick pay, enter the
federal income tax you withheld (or were required to
withhold) on third-party sick pay here.
Instructions for Form 944 (2021) -11-
References to federal income tax withholding that an employer pays that otherwise meet the
! don't apply to employers in American Samoa, requirements of the EPSLA or the Expanded FMLA, as
CAUTION Guam, the Commonwealth of the Northern enacted under the FFCRA and amended for purposes of
Mariana Islands, the U.S. Virgin Islands, and Puerto Rico, the ARP. However, don't include any wages otherwise
unless you have employees who are subject to U.S. excluded under section 3121(b) when reporting qualified
income tax withholding. sick and family leave wages on lines 4a, 4a(i), 4a(ii), 4c,
and, if applicable, 4d. See the instructions for line 8d for
3. If No Wages, Tips, and Other Compensation information about the credit for qualified sick and family
Are Subject to Social Security or Medicare leave wages for leave taken after March 31, 2021, and
before October 1, 2021.
Tax . . .
If no wages, tips, and other compensation on line 1 are line 4a (column 1)
subject to social security or Medicare tax, check the box x 0.124
on line 3 and go to line 5. If this question doesn't apply to line 4a (column 2)
you, leave the box blank. For more information about
exempt wages, see section 15 of Pub. 15, section 12 of
Pub. 80, or section 15 of Pub. 179. For religious EPSLA. Employers with fewer than 500 employees
exemptions, see section 4 of Pub. 15-A. For information and, for leave taken after March 31, 2021, and before
on the employment tax treatment of fringe benefits, see October 1, 2021, certain governmental employers without
Pub. 15-B. regard to number of employees (except for the federal
government and its agencies and instrumentalities unless
4a–4e. Taxable Social Security and Medicare described in section 501(c)(1)) are entitled to a credit if
Wages and Tips they provide paid sick leave to employees that otherwise
meets the requirements of the EPSLA. Under the EPSLA,
4a. Taxable social security wages. Enter the total
as amended for purposes of the ARP, wages are qualified
wages, including qualified sick leave wages and qualified
sick leave wages if paid to employees that are unable to
family leave wages for leave taken after March 31, 2021,
work or telework before October 1, 2021, because the
and before October 1, 2021; qualified wages (other than
employee:
qualified health plan expenses) for the employee retention
credit; sick pay; and taxable fringe benefits subject to 1. Is subject to a federal, state, or local quarantine or
social security taxes that you paid to your employees isolation order related to COVID-19;
during the year. Don't include the qualified sick leave 2. Has been advised by a health care provider to
wages reported on line 4a(i) or qualified family leave self-quarantine due to concerns related to COVID-19;
wages reported on line 4a(ii) for leave taken before April 3. Is experiencing symptoms of COVID-19 and
1, 2021. For this purpose, sick pay includes payments seeking a medical diagnosis; or, for leave taken after
made by an insurance company to your employees for March 31, 2021, and before October 1, 2021, is seeking
which you received timely notice from the insurance or awaiting the results of a diagnostic test for, or a medical
company. See section 6 of Pub. 15-A for more information diagnosis of, COVID-19 (and the employee has been
about sick pay reporting. See the instructions for line 6 for exposed to COVID-19 or the employee's employer has
an adjustment that you may need to make on Form 944 requested such test or diagnosis), or the employee is
for sick pay. obtaining immunizations related to COVID-19 or
Enter the amount before payroll deductions. Don't recovering from an injury, disability, illness, or condition
include tips on this line. For information on types of wages related to such immunization;
subject to social security taxes, see section 5 of Pub. 15, 4. Is caring for an individual subject to an order
section 4 of Pub. 80, or section 5 of Pub. 179. described in (1) or who has been advised as described in
For 2021, the rate of social security tax on taxable (2);
wages, except for qualified sick leave wages and qualified 5. Is caring for a son or daughter because the school
family leave wages for leave taken before April 1, 2021, is or place of care for that child has been closed, or the
6.2% (0.062) each for the employer and employee or childcare provider for that child is unavailable, due to
12.4% (0.124) for both. Stop paying social security tax on COVID-19 precautions; or
and entering an employee's wages on line 4a when the
employee's taxable wages, including qualified sick leave 6. Is experiencing any other substantially similar
wages reported on line 4a(i), qualified family leave wages condition specified by the U.S. Department of Health and
reported on line 4a(ii), and tips, reach $142,800 for the Human Services, which for leave taken after March 31,
year. However, continue to withhold income and Medicare 2021, and before October 1, 2021, includes to
taxes for the whole year on all wages, including qualified accompany an individual to obtain immunization related to
sick leave wages, qualified family leave wages, and tips, COVID-19, or to care for an individual who is recovering
even when the social security wage base of $142,800 has from any injury, disability, illness, or condition related to
been reached. the immunization.
For purposes of the credit for qualified sick and family Son or daughter. A son or daughter must generally
leave wages, qualified sick leave and family leave wages have been under 18 years of age or incapable of self-care
are wages for social security and Medicare tax purposes, because of a mental or physical disability. A son or
determined without regard to the exclusions from the daughter includes a biological child, adopted child,
definition of employment under sections 3121(b)(1)–(22), stepchild, foster child, legal ward, or child for whom the
-12- Instructions for Form 944 (2021)
employee assumes parental status and carries out the Rate of pay and limit on wages. The rate of pay must
obligations of a parent. be at least two-thirds of the employee’s regular rate of pay
Limits on qualified sick leave wages. The EPSLA, (as determined under the Fair Labor Standards Act of
as amended for purposes of the ARP, provides different 1938), multiplied by the number of hours the employee
limitations for different circumstances under which otherwise would have been scheduled to work. For leave
qualified sick leave wages are paid. For paid sick leave taken after March 31, 2020, and before April 1, 2021, the
qualifying under (1), (2), or (3) above, the amount of total qualified leave wages can't exceed $200 per day or
qualified sick leave wages is determined at the $10,000 in the aggregate per employee. For leave taken
employee's regular rate of pay, but the wages may not after March 31, 2021, and before October 1, 2021, the
exceed $511 for any day (or portion of a day) for which the limit resets and the total qualified leave wages can't
individual is paid sick leave. For paid sick leave qualifying exceed $200 per day or $12,000 in the aggregate per
under (4), (5), or (6) above, the amount of qualified sick employee.
leave wages is determined at two-thirds the employee's For more information about qualified sick and family
regular rate of pay, but the wages may not exceed $200 leave wages, go to IRS.gov/PLC.
for any day (or portion of a day) for which the individual is 4a(i). Qualified sick leave wages. Enter the qualified
paid sick leave. The EPSLA also limits each individual to a taxable (subject to social security tax) sick leave wages
maximum of up to 80 hours of paid sick leave in total for you paid to your employees during the year for leave
leave taken after March 31, 2020, and before April 1, taken before April 1, 2021. Qualified sick leave wages for
2021. The ARP resets this limit at 80 hours of paid sick leave taken before April 1, 2021, aren't subject to the
leave for leave taken after March 31, 2021, and before employer share of social security tax; therefore, the tax
October 1, 2021. Therefore, for leave taken after March rate on these wages is 6.2% (0.062). Stop paying social
31, 2020, and before April 1, 2021, the maximum amount security tax on and entering an employee's wages on
of paid sick leave wages can’t exceed $5,110 for an line 4a(i) when the employee's taxable wages, including
employee for leave under (1), (2), or (3), and it can’t wages reported on line 4a, qualified sick leave wages
exceed $2,000 for an employee for leave under (4), (5), or reported on line 4a(i), qualified family leave wages
(6). These maximum amounts also reset and apply to reported on line 4a(ii), and tips, reach $142,800 for the
leave taken after March 31, 2021, and before October 1, year. See the instructions for line 4c for reporting
2021. Medicare tax on qualified sick leave wages, including the
For more information about qualified sick and family portion above the social security wage base.
leave wages, go to IRS.gov/PLC. For purposes of the credit for qualified sick and family
Expanded FMLA. Employers with fewer than 500 leave wages, qualified sick leave wages are wages for
employees and, for leave taken after March 31, 2021, and social security and Medicare tax purposes, determined
before October 1, 2021, certain governmental employers without regard to the exclusions from the definition of
without regard to number of employees (except for the employment under sections 3121(b)(1)–(22), that an
federal government and its agencies and instrumentalities employer pays that otherwise meet the requirements of
unless described in section 501(c)(1)) are entitled to a the EPSLA, as enacted under the FFCRA and amended
credit under the FFCRA, as amended for purposes of the by the COVID-related Tax Relief Act of 2020. However,
ARP, if they provide paid family leave to employees that don't include any wages otherwise excluded under
otherwise meets the requirements of the Expanded section 3121(b) when reporting qualified sick leave wages
FMLA. For leave taken before April 1, 2021, wages are on lines 4a(i), 4c, and, if applicable, 4d. See the
qualified family leave wages if paid to an employee who instructions for line 8b for information about the credit for
has been employed for at least 30 calendar days when an qualified sick and family leave wages for leave taken
employee is unable to work or telework due to the need to before April 1, 2021.
care for a son or daughter under 18 years of age or
incapable of self-care because of a mental or physical line 4a(i) (column 1)
disability because the school or place of care for that child x 0.062
has been closed, or the childcare provider for that child is line 4a(i) (column 2)
unavailable, due to a public health emergency. See Son
or daughter, earlier, for more information. For leave taken
after March 31, 2021, and before October 1, 2021, the 4a(ii). Qualified family leave wages. Enter the
leave can be granted for any other reason provided by the qualified taxable (subject to social security tax) family
EPSLA, as amended for purposes of the ARP. leave wages you paid to your employees during the year
for leave taken before April 1, 2021. Qualified family leave
For leave taken before April 1, 2021, the first 10 days
wages for leave taken before April 1, 2021, aren't subject
for which an employee takes leave may be unpaid. During
to the employer share of social security tax; therefore, the
this period, employees may use other forms of paid leave,
tax rate on these wages is 6.2% (0.062). Stop paying
such as qualified sick leave, accrued sick leave, annual
social security tax on and entering an employee's wages
leave, or other paid time off. After an employee takes
on line 4a(ii) when the employee's taxable wages,
leave for 10 days, the employer provides the employee
including wages reported on line 4a, qualified sick leave
paid leave (that is, qualified family leave wages) for up to
wages reported on line 4a(i), qualified family leave wages
10 weeks. For leave taken after March 31, 2021, and
reported on line 4a(ii), and tips, reach $142,800 for the
before October 1, 2021, the 10-day rule discussed above
year. See the instructions for line 4c for reporting
doesn't apply and the paid leave can be provided for up to
12 weeks.
Instructions for Form 944 (2021) -13-
Medicare tax on qualified family leave wages, including qualified health plan expenses) for the employee retention
the portion above the social security wage base. credit; tips; sick pay; and taxable fringe benefits that are
For purposes of the credit for qualified sick and family subject to Medicare tax. Unlike social security wages,
leave wages, qualified family leave wages are wages for there is no limit on the amount of wages subject to
social security and Medicare tax purposes, determined Medicare tax. See the instructions for line 6 for an
without regard to the exclusions from the definition of adjustment that you may need to make on Form 944 for
employment under sections 3121(b)(1)–(22), that an sick pay.
employer pays that otherwise meet the requirements of The rate of Medicare tax is 1.45% (0.0145) each for the
the Expanded FMLA, as enacted under the FFCRA and employer and employee or 2.9% (0.029) for both. Include
amended by the COVID-related Tax Relief Act of 2020. all tips your employees reported during the year, even if
However, don't include any wages otherwise excluded you were unable to withhold the employee tax of 1.45%.
under section 3121(b) when reporting qualified family
leave wages on lines 4a(ii), 4c, and, if applicable, 4d. See line 4c (column 1)
the instructions for line 8b for information about the credit x 0.029
for qualified sick and family leave wages for leave taken line 4c (column 2)
before April 1, 2021.
line 4a(ii) (column 1) 4d. Taxable wages & tips subject to Additional
x 0.062 Medicare Tax withholding. Enter all wages, including
line 4a(ii) (column 2) qualified sick leave wages, qualified family leave wages,
and qualified wages (excluding qualified health plan
expenses) for the employee retention credit; tips; sick
4b. Taxable social security tips. Enter all tips your pay; and taxable fringe benefits that are subject to
employees reported to you during the year until the total of Additional Medicare Tax withholding. You’re required to
the tips and taxable wages, including wages reported on begin withholding Additional Medicare Tax in the pay
line 4a, qualified sick leave wages reported on line 4a(i), period in which you pay wages in excess of $200,000 to
and qualified family leave wages reported on line 4a(ii), for an employee and continue to withhold it each pay period
an employee reach $142,800 for the year. Include all tips until the end of the calendar year. Additional Medicare
your employees reported to you even if you were unable Tax is only imposed on the employee. There is no
to withhold the 6.2% employee share of social security employer share of Additional Medicare Tax. All wages that
tax. You will reduce your total taxes by the amount of any are subject to Medicare tax are subject to Additional
uncollected employee share of social security and Medicare Tax withholding if paid in excess of the
Medicare taxes on tips later on line 6; see Adjustments for $200,000 withholding threshold.
tips and group-term life insurance, later. Don’t include For more information on what wages are subject to
service charges on line 4b. For details about the Medicare tax, see the chart, Special Rules for Various
difference between tips and service charges, see Rev. Types of Services and Payments, in section 15 of Pub. 15.
Rul. 2012-18, 2012-26 I.R.B. 1032, available at For more information on Additional Medicare Tax, go to
IRS.gov/irb/2012-26_IRB#RR-2012-18. IRS.gov/ADMT. See the instructions for line 6 for an
Your employee must report cash tips to you by the 10th adjustment that you may need to make on Form 944 for
day of the month after the month the tips are received. sick pay.
Cash tips include tips paid by cash, check, debit card, and Once wages and tips exceed the $200,000 withholding
credit card. The report should include charged tips (for threshold, include all tips your employees reported during
example, credit and debit card charges) you paid over to the year, even if you were unable to withhold the
the employee for charge customers, tips the employee employee tax of 0.9%.
received directly from customers, and tips received from
other employees under any tip-sharing arrangement. Both line 4d (column 1)
directly and indirectly tipped employees must report tips to x 0.009
you. No report is required for months when tips are less line 4d (column 2)
than $20. Employees may use Form 4070 (available only
in Pub. 1244) or Form 4070-PR (available only in Pub.
1244-PR), or submit a written statement or electronic tip 4e. Total social security and Medicare taxes. Add
record. the column 2 amounts on lines 4a–4d. Enter the result on
line 4e.
line 4b (column 1)
x 0.124 5. Total Taxes Before Adjustments
line 4b (column 2) Add the total federal income tax withheld from wages,
tips, and other compensation from line 2 and the total
social security and Medicare taxes before adjustments
For more information on tips, see section 6 of Pub. 15, from line 4e. Enter the result on line 5.
section 5 of Pub. 80, or section 6 of Pub. 179.
4c. Taxable Medicare wages and tips. Enter all 6. Current Year's Adjustments
wages, including qualified sick leave wages, qualified Enter tax amounts that result from current period
family leave wages, and qualified wages (excluding adjustments. Use a minus sign (if possible) to show an
-14- Instructions for Form 944 (2021)
adjustment that decreases the total taxes shown on line 5. 7. Total Taxes After Adjustments
Otherwise, use parentheses. Combine the amounts shown on lines 5 and 6 and enter
In certain cases, you must adjust the amounts you the result on line 7.
entered as social security and Medicare taxes in column 2
of lines 4a–4d to figure your correct tax liability for this 8a. Qualified Small Business Payroll Tax Credit
year's Form 944. See section 13 of Pub. 15, section 9 of for Increasing Research Activities
Pub. 80, or section 12 of Pub. 179. Enter the total amount of the credit from Form 8974,
Adjustment for fractions of cents. Enter adjustments line 12.
for fractions of cents (due to rounding) relating to the If you enter an amount on line 8a, you must attach
employee share of social security and Medicare taxes Form 8974. The December 2017 revision of Form
withheld. The employee share of amounts shown in !
CAUTION 8974 instructs you to enter the amount from Form
column 2 of lines 4a–4d may differ slightly from amounts 8974, line 12, on Form 944, line 8. For 2021, the amount
actually withheld from employees' pay due to rounding from Form 8974, line 12, should be entered on Form 944,
social security and Medicare taxes based on statutory line 8a.
rates. This adjustment may be a positive or a negative
adjustment. Form 944 and these instructions use the terms
Adjustment for sick pay. If your third-party payer of TIP “nonrefundable” and “refundable” when
sick pay that isn't your agent (for example, an insurance discussing credits. The term “nonrefundable”
company) transfers the liability for the employer share of means the portion of the credit which is limited by law to
the social security and Medicare taxes to you, enter a the amount of certain taxes. The term “refundable” means
negative adjustment on line 6 for the employee share of the portion of the credit which is in excess of those taxes.
social security and Medicare taxes that were withheld and
deposited by your third-party sick pay payer on the sick 8b. Nonrefundable Portion of Credit for
pay. If you're the third-party sick pay payer and you
transferred the liability for the employer share of the social Qualified Sick and Family Leave Wages for
security and Medicare taxes to the employer, enter a Leave Taken Before April 1, 2021
negative adjustment on line 6 for any employer share of Certain private employers with fewer than 500 employees
these taxes required to be paid by the employer. The sick that provide paid sick leave under the EPSLA and/or
pay should be included on line 4a, line 4c, and, if the provide paid family leave under the Expanded FMLA are
withholding threshold is met, line 4d. eligible to claim the credit for qualified sick and family
No adjustment is reported on line 6 for sick pay that is leave wages for leave taken before April 1, 2021. For
paid through a third party as an employer's agent. An purposes of this credit, qualified sick leave wages and
employer's agent bears no insurance risk and is qualified family leave wages are wages for social security
reimbursed on a cost-plus-fee basis for payment of sick and Medicare tax purposes, determined without regard to
pay and similar amounts. If an employer uses an agent to the exclusions from the definition of employment under
pay sick pay, the employer reports the wages on line 4a, sections 3121(b)(1)–(22), that an employer pays that
line 4c, and, if the withholding threshold is met, line 4d, otherwise meet the requirements of the EPSLA or
unless the employer has an agency agreement with the Expanded FMLA. Enter the nonrefundable portion of the
third-party payer that requires the third-party payer to do credit for qualified sick and family leave wages from
the collecting, reporting, and/or paying or depositing Worksheet 1, Step 2, line 2j. The credit for qualified sick
employment taxes on the sick pay. See section 6 of Pub. and family leave wages consists of the qualified sick leave
15-A for more information about sick pay reporting. wages, the qualified family leave wages, the qualified
Adjustments for tips and group-term life insurance. health plan expenses allocable to those wages, and the
Enter a negative adjustment for: employer share of Medicare tax allocable to those wages.
The nonrefundable portion of the credit is limited to the
• Any uncollected employee share of social security and employer share of social security tax reported on Form
Medicare taxes on tips, and 944, lines 4a and 4b, after that share is first reduced by
• The uncollected employee share of social security and any credit claimed on Form 8974 for the qualified small
Medicare taxes on group-term life insurance premiums business payroll tax credit for increasing research
paid for former employees. activities, any credit to be claimed on Form 5884-C for the
See the General Instructions for Forms W-2 and W-3 work opportunity credit for qualified tax-exempt
for information on how to report the uncollected employee organizations hiring qualified veterans, and/or any credit
share of social security and Medicare taxes on tips and to be claimed on Form 5884-D for the disaster credit for
group-term life insurance on Form W-2. qualified tax-exempt organizations.
Prior year's adjustments. If you need to adjust any If you're a third-party payer of sick pay that isn't an
amount reported on line 6 from a previously filed Form ! agent (for example, an insurance company) and
944, complete and file Form 944-X. Form 944-X is an CAUTION you're claiming the credit for qualified sick and
adjusted return or claim for refund and is filed separately family leave wages for amounts paid to your own
from Form 944. See section 13 of Pub. 15 or section 9 of employees, the amount of the employer share of social
Pub. 80. security tax reported on line 4a must be reduced by any
adjustment you make on line 6 for the employer share of
Instructions for Form 944 (2021) -15-
social security tax transferred to your client. See claimed for the nonrefundable portion of the credit for
Worksheet 1 to figure your credit. qualified sick and family leave wages for leave taken
before April 1, 2021.
Any credit in excess of the remaining amount of the
employer share of social security tax is refundable and If you're a third-party payer of sick pay that isn't an
reported on Form 944, line 10d. For more information on ! agent (for example, an insurance company) and
CAUTION you're claiming the employee retention credit for
the credit for qualified sick and family leave wages, go to
IRS.gov/PLC. amounts paid to your own employees, the amount of the
employer share of social security tax reported on line 4a
Qualified health plan expenses allocable to qualified must be reduced by any adjustment you make on line 6
sick and family leave wages. The credit for qualified for the employer share of social security tax transferred to
sick leave wages and qualified family leave wages is your client. See Worksheet 2 to figure your credit.
increased to cover the qualified health plan expenses that
are properly allocable to the qualified leave wages for
Any credit in excess of the remaining amount of the
which the credit is allowed. These qualified health plan
employer share of social security tax is refundable and
expenses are amounts paid or incurred by the employer
reported on Form 944, line 10e. For more information on
to provide and maintain a group health plan but only to the
the employee retention credit for qualified wages paid
extent such amounts are excluded from the employees’
after December 31, 2020, and before July 1, 2021, see
income as coverage under an accident or health plan. The
Notice 2021-23.
amount of qualified health plan expenses generally
includes both the portion of the cost paid by the employer Qualified wages for the employee retention credit
and the portion of the cost paid by the employee with pre- paid after December 31, 2020, and before July 1,
tax salary reduction contributions. However, qualified 2021. The tax credit is equal to 70% of qualified wages
health plan expenses don’t include amounts that the paid to employees after December 31, 2020, and before
employee paid for with after-tax contributions. For more July 1, 2021. Qualified wages, including qualified health
information, go to IRS.gov/PLC. plan expenses, are limited to a maximum of $10,000 for
each employee in each of the first quarter and the second
You must include the full amount (both the
quarter of 2021 ($20,000 in total). Qualified wages are
TIP nonrefundable and refundable portions) of the wages for social security and Medicare tax purposes (for
credit for qualified sick and family leave wages in
government entities, determined without regard to section
your gross income for the tax year that includes the last
3121(b)(5), (6), (7), (10), or (13), except for services
day of any calendar quarter in which a credit is allowed.
performed by an inmate at a penal institution) paid to
You can't use the same wages for the employee retention
certain employees during any period in a quarter in which
credit and the credits for paid sick and family leave.
your business operations are fully or partially suspended
due to a governmental order or during a quarter in which
8c. Nonrefundable Portion of Employee your gross receipts (within the meaning of section 448(c)
Retention Credit or, if you're a tax-exempt organization, section 6033) are
Certain government entities are entitled to the less than 80% of the gross receipts for the same calendar
quarter in calendar year 2019.
TIP credit for 2021, including (1) federal
instrumentalities described in section 501(c)(1) The wages and qualified health plan expenses
and exempt from tax under section 501(a); and (2) any considered in calculating your credit depend on the size of
government, agency, or instrumentality that is a college or your workforce. Eligible employers that had an average
university or the principal purpose or function of the entity number of 500 or fewer full-time employees during 2019
is providing medical or hospital care. count wages paid to all their employees and the qualified
health plan expenses paid or incurred for all employees
during any period in the first and second quarters of 2021,
Instructions for Qualified Wages Paid After in which business operations are fully or partially
December 31, 2020, and Before July 1, 2021 suspended due to a governmental order or during a
Enter the nonrefundable portion of the employee retention quarter in which gross receipts are less than 80% of the
credit from Worksheet 2, Step 2, line 2h. The employee gross receipts for the same calendar quarter in calendar
retention credit is 70% of the qualified wages you paid to year 2019. Eligible employers that had an average
your employees after December 31, 2020, and before July number of more than 500 full-time employees in 2019 may
1, 2021. Qualified wages include qualified health plan count only wages paid to employees for time that the
expenses for the employee retention credit. The employees weren't providing services, and qualified
nonrefundable portion of the credit is limited to the health plan expenses paid or incurred by the employer
employer share of social security tax reported on Form allocable to the time those employees weren't providing
944, lines 4a and 4b, after that share is first reduced by services, due to the suspension or decline in gross
any credit claimed on Form 8974 for the qualified small receipts.
business payroll tax credit for increasing research Qualified wages don't include wages for which the
activities, any credit to be claimed on Form 5884-C for the employer receives a credit for qualified sick and family
work opportunity credit for qualified tax-exempt leave, and any wages taken into account in determining
organizations hiring qualified veterans, any credit to be the employee retention credit can't be taken into account
claimed on Form 5884-D for the disaster credit for as wages for purposes of the credits under sections 41,
qualified tax-exempt organizations, and/or any credit 45A, 45P, 45S, 51, and 1396. Employers can receive both
-16- Instructions for Form 944 (2021)
a Small Business Interruption Loan under the PPP and the If you're a third-party payer of sick pay that isn't an
employee retention credit; however, employers can't ! agent (for example, an insurance company) and
receive both loan forgiveness and a credit for the same CAUTION you're claiming the employee retention credit for
wages. amounts paid to your own employees, the amount of the
Qualified health plan expenses for the employee employer share of Medicare tax reported on line 4c must
retention credit. Qualified wages for the employee be reduced by any adjustment you make on line 6 for the
retention credit include qualified health plan expenses. employer share of Medicare tax transferred to your client.
Qualified health plan expenses are amounts paid or See Worksheet 4 to figure your credit.
incurred by the employer to provide and maintain a group
health plan but only to the extent such amounts are Any credit in excess of the remaining amount of the
excluded from the employees' income as coverage under employer share of Medicare tax is refundable and
an accident or health plan. The amount of qualified health reported on Form 944, line 10e. For more information on
plan expenses taken into account in determining the the employee retention credit for qualified wages paid
amount of qualified wages generally includes both the after June 30, 2021, and before January 1, 2022, see
portion of the cost paid by the employer and the portion of Notice 2021-49.
the cost paid by the employee with pre-tax salary
reduction contributions. However, the qualified health plan Qualified wages for the employee retention credit
expenses shouldn't include amounts that the employee paid after June 30, 2021, and before January 1, 2022.
paid for with after-tax contributions. Generally, qualified The tax credit is equal to 70% of qualified wages paid to
health plan expenses are those which are allocable to an employees after June 30, 2021, and before January 1,
employee (and to a period) in which your business 2022. Qualified wages, including qualified health plan
operations are fully or partially suspended due to a expenses, are limited to a maximum of $10,000 for each
governmental order or experience a decline in gross employee in each of the third quarter and the fourth
receipts. The allocation will be treated as proper if made quarter of 2021 ($20,000 in total). Qualified wages are
on the basis of being pro rata among periods of coverage. wages for social security and Medicare tax purposes (for
government entities, determined without regard to section
If you complete Worksheet 2 because you paid 3121(b)(5), (6), (7), (10), or (13), except for services
TIP qualified wages for the employee retention credit performed by an inmate at a penal institution) paid to
after December 31, 2020, and before July 1, certain employees during any period in the third and fourth
2021, and you also complete Worksheet 4 because you quarters of 2021 in which your business operations are
paid qualified wages for the employee retention credit fully or partially suspended due to a governmental order or
after June 30, 2021, and before January 1, 2022, you during a quarter in which your gross receipts (within the
must add the amounts from Worksheet 2, Step 2, line 2h, meaning of section 448(c) or, if you're a tax-exempt
and Worksheet 4, Step 2, line 2h, together and report the organization, section 6033) are less than 80% of the gross
total on Form 944, line 8c. receipts for the same calendar quarter in calendar year
2019; or wages paid by a recovery startup business. See
Recovery startup business, later, for more information
Instructions for Qualified Wages Paid After June
about a recovery startup business. A recovery startup
30, 2021, and Before January 1, 2022 business must enter the total of any amounts included in
The Infrastructure Act amends section 3134 of the lines 8c and 10e on lines 25 and 26, as applicable, for
! Internal Revenue Code, as enacted under the wages paid after June 30, 2021, and before January 1,
CAUTION ARP, to limit the availability of the employee 2022. The recovery startup business is limited to a
retention credit in the fourth quarter of 2021 to employers $50,000 employee retention credit in each of the third
that are recovery startup businesses, as defined in section quarter and fourth quarter of 2021 ($100,000 in total for
3134(c)(5). Thus, for wages paid after September 30, the year). For more information, see the instructions for
2021, and before January 1, 2022, only the wages paid by line 25 and line 26, later.
recovery startup businesses can be qualified wages as Unless you’re a severely financially distressed
described in these instructions. See Recovery startup employer, the wages and qualified health plan expenses
business, later, for more information about a recovery considered in calculating your credit depend on the size of
startup business. your workforce. Eligible employers that had an average
Enter the nonrefundable portion of the employee retention number of 500 or fewer full-time employees during 2019
credit from Worksheet 4, Step 2, line 2h. The employee count wages paid to all their employees and the qualified
retention credit is 70% of the qualified wages you paid to health plan expenses paid or incurred for all employees
your employees after June 30, 2021, and before January during any period in the third and fourth quarters of 2021,
1, 2022. Qualified wages include qualified health plan in which business operations are fully or partially
expenses for the employee retention credit. The suspended due to a governmental order or during a
nonrefundable portion of the credit is limited to the quarter in which gross receipts are less than 80% of the
employer share of Medicare tax reported on Form 944, gross receipts in the same calendar quarter in calendar
line 4c, after that share is first reduced by any credit year 2019. Eligible employers that had an average
claimed for the nonrefundable portion of the credit for number of more than 500 full-time employees in 2019 may
qualified sick and family leave wages for leave taken after count only wages paid to employees for time that the
March 31, 2021. employees weren't providing services, and qualified
health plan expenses paid or incurred by the employer
Instructions for Form 944 (2021) -17-
allocable to the time those employees weren't providing otherwise meet the requirements of the EPSLA or
services, due to the suspension or decline in gross Expanded FMLA, as enacted under the FFCRA and
receipts. amended for purposes of the ARP. Enter the
Qualified wages under section 3134 for the employee nonrefundable portion of the credit for qualified sick and
retention credit don't include wages taken into account for family leave wages from Worksheet 3, Step 2, line 2r.
credits under sections 41, 45A, 45P, 45S, 51, 1396, 3131 The credit for qualified sick and family leave wages
(qualified sick leave wages for leave taken after March 31, consists of the:
2021, and before October 1, 2021), and 3132 (qualified • Qualified sick leave wages and/or qualified family leave
family leave wages for leave taken after March 31, 2021, wages;
and before October 1, 2021). Qualified wages also don't • Qualified health plan expenses allocable to qualified
include wages that were used as payroll costs in sick and family leave wages;
connection with a Shuttered Venue Operator Grant under • Collectively bargained defined benefit pension plan
section 324 of the Economic Aid to Hard-Hit Small contributions, subject to the qualified leave wage
Businesses, Nonprofits, and Venues Act; or a restaurant limitations, allocable to the qualified sick and family leave
revitalization grant under section 5003 of the ARP. wages;
Employers can receive both a Small Business Interruption • Collectively bargained apprenticeship program
Loan under the PPP and the employee retention credit; contributions, subject to the qualified leave wage
however, employers can't receive both loan forgiveness limitations, allocable to the qualified sick and family leave
and a credit for the same wages. wages; and
Severely financially distressed employer. Severely • Employer share of social security and Medicare tax
financially distressed employers are eligible employers allocable to the qualified sick and family leave wages.
during the third quarter of 2021 whose gross receipts are
less than 10% of the gross receipts for the same calendar The nonrefundable portion of the credit is limited to the
quarter in calendar year 2019. employer share of Medicare tax reported on Form 944,
Recovery startup business. A recovery startup line 4c. You can’t claim the credit if you provide the leave
business is an employer that: in a manner that discriminates in favor of highly
• Began carrying on a trade or business after February compensated employees, full-time employees, or
15, 2020; employees on the basis of employment tenure when
• Had average annual gross receipts of $1 million or less making qualified sick and/or family leave available to
for the 3 tax years ending with the tax year before the employees. See Highly compensated employee, later, for
calendar quarter in which the employee retention credit is the definition.
claimed; and For qualified sick and family leave wages paid before
• Only for credit claimed in the third quarter of 2021, isn't July 1, 2021, for leave taken after March 31, 2021, and
otherwise eligible for the employee retention credit before July 1, 2021, the credit for qualified sick and family
because business operations weren’t fully or partially leave wages is reduced by the amount of the credit
suspended due to a governmental order or because gross allowed under section 2301 of the CARES Act (for the
receipts (within the meaning of section 448(c) or, if you're employee retention credit) or under section 41 (for the
a tax-exempt organization, section 6033) weren’t less credit for increasing research activities) with respect to
than 80% of the gross receipts for the same calendar wages taken into account for determining both the credit
quarter in calendar year 2019. under section 2301 of the CARES Act or section 41 and
8d. Nonrefundable Portion of Credit for the credit for qualified sick and family leave wages; and
any wages taken into account in determining the credit for
Qualified Sick and Family Leave Wages for qualified sick and family leave wages can't be taken into
Leave Taken After March 31, 2021, and Before account as wages for purposes of the credits under
October 1, 2021 sections 45A, 45P, 45S, and 51. For leave taken after
Employers with fewer than 500 employees and certain June 30, 2021, the credit for qualified sick and family
governmental employers without regard to number of leave wages is reduced by the amount of the credit
employees (except for the federal government and its allowed under section 41 (for the credit for increasing
agencies and instrumentalities unless described in research activities) with respect to wages taken into
section 501(c)(1)) are entitled to a credit if they provide account for determining the credit for qualified sick and
paid sick leave to employees that otherwise meets the family leave wages; and any wages taken into account in
requirements of the EPSLA, as amended for purposes of determining the credit for qualified sick and family leave
the ARP, and/or provide paid family leave to employees wages can't be taken into account as wages for purposes
that otherwise meets the requirements under the of the credits under sections 45A, 45P, 45S, 51, and
Expanded FMLA, as amended for purposes of the ARP, 3134. For leave taken after March 31, 2021, and before
for qualified sick and family leave wages for leave taken October 1, 2021, qualified wages also don't include
after March 31, 2021, and before October 1, 2021. For wages that were used as payroll costs in connection with
purposes of this credit, qualified sick leave wages and a Shuttered Venue Operator Grant under section 324 of
qualified family leave wages are wages for social security the Economic Aid to Hard-Hit Small Businesses,
and Medicare tax purposes, determined without regard to Nonprofits, and Venues Act; or a restaurant revitalization
the exclusions from the definition of employment under grant under section 5003 of the ARP. Employers can
sections 3121(b)(1)–(22), that an employer pays that receive both a Small Business Interruption Loan under the
PPP and the credit for qualified sick and family leave
-18- Instructions for Form 944 (2021)
wages; however, employers can't receive both loan were provided to employees covered under the collective
forgiveness and a credit for the same wages. The same bargaining agreement during the quarter for which you're
wages can’t be treated as both qualified sick leave wages claiming the credit.
and qualified family leave wages. Collectively bargained apprenticeship program con-
If you're a third-party payer of sick pay that isn't an tributions. For purposes of qualified sick and family
! agent (for example, an insurance company) and leave wages, collectively bargained apprenticeship
CAUTION you're claiming the credit for qualified sick and program contributions are contributions during the quarter
family leave wages for amounts paid to your own for which you're claiming the credit that are:
employees, the amount of the employer share of • Paid or incurred by an employer on behalf of its
Medicare tax reported on line 4c must be reduced by any employees to a registered apprenticeship program, which
adjustment you make on line 6 for the employer share of is an apprenticeship registered under the National
Medicare tax transferred to your client. See Worksheet 3 Apprenticeship Act of August 16, 1937, and meets the
to figure your credit. standards of Federal Regulations under subpart A of Part
29 and Part 30 of title 29;
Any credit in excess of the remaining amount of the • Made based on an apprenticeship program contribution
employer share of Medicare tax is refundable and rate; and
reported on Form 944, line 10f. For more information on • Required to be made under the terms of a collective
the credit for qualified sick and family leave wages, go to bargaining agreement in effect during the quarter for
IRS.gov/PLC. which you're claiming the credit.
Apprenticeship program contribution rate. The
Qualified health plan expenses allocable to qualified apprenticeship program contribution rate is the
sick and family leave wages. The credit for qualified contribution rate that the employer is obligated to pay
sick leave wages and qualified family leave wages is under the terms of a collective bargaining agreement for
increased to cover the qualified health plan expenses that benefits under a registered apprenticeship program, as
are properly allocable to the qualified leave wages for the rate is applied to contribution base units, as defined by
which the credit is allowed. These qualified health plan section 4001(a)(11) of ERISA.
expenses are amounts paid or incurred by the employer
Allocation rules. The amount of collectively bargained
to provide and maintain a group health plan but only to the
apprenticeship program contributions allocated to
extent such amounts are excluded from the employees'
qualified sick leave wages and/or qualified family leave
income as coverage under an accident or health plan. The
wages during the quarter for which you're claiming the
amount of qualified health plan expenses generally
credit is the apprenticeship program contribution rate
includes both the portion of the cost paid by the employer
(expressed as an hourly rate) multiplied by the number of
and the portion of the cost paid by the employee with
hours qualified sick leave wages and/or qualified family
pre-tax salary reduction contributions. However, qualified
leave wages were provided to employees covered under
health plan expenses don't include amounts that the
the collective bargaining agreement during the quarter for
employee paid for with after-tax contributions. For more
which you're claiming the credit.
information, go to IRS.gov/PLC.
Highly compensated employee. A highly compensated
Collectively bargained defined benefit pension plan
employee is an employee who meets either of the
contributions. For purposes of qualified sick and family
following tests.
leave wages, collectively bargained defined benefit
pension plan contributions are contributions during the 1. The employee was a 5% owner at any time during
quarter for which you're claiming the credit that are: the year or the preceding year.
• Paid or incurred by an employer on behalf of its 2. The employee received more than $130,000 in pay
employees to a defined benefit plan, as defined in section for the preceding year.
414(j), which meets the requirements of section 401(a);
You can choose to ignore test (2) if the employee
• Made based on a pension contribution rate; and wasn’t also in the top 20% of employees when ranked by
• Required to be made under the terms of a collective pay for the preceding year.
bargaining agreement in effect during the quarter for
which you're claiming the credit. 8e. Nonrefundable Portion of COBRA Premium
Pension contribution rate. The pension contribution Assistance Credit
rate is the contribution rate that the employer is obligated
to pay under the terms of a collective bargaining Enter the COBRA premium assistance that you provided
agreement to a defined benefit plan, as the rate is applied for periods of coverage beginning on or after April 1, 2021,
to contribution base units, as defined by section 4001(a) through periods of coverage beginning on or before
(11) of the Employee Retirement Income Security Act of September 30, 2021. You can claim the credit for a period
1974 (ERISA). of coverage once the individual elects COBRA
Allocation rules. The amount of collectively bargained continuation coverage, and for any period of coverage
defined benefit pension plan contributions allocated to beginning after the election, as of the beginning of such
qualified sick leave wages and/or qualified family leave period of coverage for which the individual doesn't pay the
wages during the quarter for which you're claiming the premiums for the coverage. Don't include any amount that
credit is the pension contribution rate (expressed as an was included as qualified wages for the employee
hourly rate) multiplied by the number of hours qualified retention credit or included as qualified health plan
sick leave wages and/or qualified family leave wages expenses allocable to qualified sick and family leave
Instructions for Form 944 (2021) -19-
wages. Enter the nonrefundable portion of the COBRA If you’re a semiweekly schedule depositor, you
premium assistance credit from Worksheet 5, Step 2, ! must complete Form 945-A. If you fail to complete
line 2g. See COBRA background next for more CAUTION and submit Form 945-A, the IRS may assess
information about COBRA. deposit penalties based on available information.
COBRA background. The Consolidated Omnibus
Budget Reconciliation Act of 1985 (COBRA) provides 10a. Total Deposits for This Year
certain former employees, retirees, spouses, former Enter your deposits for this year, including any
spouses, and dependent children the right to temporary overpayment that you applied from filing Form 944-X,
continuation of health coverage at group rates. COBRA 944-X (SP), 941-X, or 941-X (PR) in the current year. Also
generally covers multiemployer health plans and health include in the amount shown any overpayment from a
plans maintained by private-sector employers (other than previous period that you applied to this return. Don't
churches) with 20 or more full- and part-time employees. include any amount you didn't deposit because you
Parallel requirements apply to these plans under ERISA. reduced your deposits in anticipation of the credit for
Under the Public Health Service Act, COBRA qualified sick and family leave wages, the employee
requirements also apply to health plans covering state or retention credit, and/or the COBRA premium assistance
local government employees. Similar requirements apply credit, as discussed in Notice 2020-22 and Notice
under some state laws. 2021-24.
8f. Number of Individuals Provided COBRA 10d. Refundable Portion of Credit for Qualified
Premium Assistance Sick and Family Leave Wages for Leave Taken
Enter the number of individuals provided COBRA Before April 1, 2021
premium assistance for periods of coverage beginning on Certain private employers with fewer than 500 employees
or after April 1, 2021, through periods of coverage that provided paid sick leave under the EPSLA and/or
beginning on or before September 30, 2021. Count each provided paid family leave under the Expanded FMLA are
assistance eligible individual that received assistance as eligible to claim the credit for qualified sick and family
one individual, whether or not the COBRA coverage was leave wages. Enter the refundable portion of the credit for
for insurance that covered more than one assistance qualified sick and family leave wages from Worksheet 1,
eligible individual. For example, if the coverage was for a Step 2, line 2k. The credit for qualified sick and family
former employee, spouse, and two children, you would leave wages consists of the qualified sick leave wages,
include one individual on line 8f. Further, each individual is the qualified family leave wages, the qualified health plan
reported only once per year. For example, an assistance expenses allocable to those wages, and the employer
eligible individual that received assistance monthly is only share of Medicare tax allocable to those wages. The
reported as one individual. refundable portion of the credit is allowed after the
employer share of social security tax is reduced to zero by
8g. Total Nonrefundable Credits nonrefundable credits that are applied against the
Add lines 8a, 8b, 8c, 8d, and 8e. Enter the total on line 8g. employer share of social security tax.
9. Total Taxes After Adjustments and 10e. Refundable Portion of Employee Retention
Nonrefundable Credits Credit
Subtract line 8g from line 7 and enter the result on line 9. If you complete Worksheet 2 because you paid
The amount entered on line 9 can't be less than zero.
TIP qualified wages for the employee retention credit
• If line 9 is less than $2,500, you may pay the amount after December 31, 2020, and before July 1,
with Form 944 or you may deposit the amount. 2021, and you also complete Worksheet 4 because you
• If line 9 is $2,500 or more, you must generally deposit paid qualified wages for the employee retention credit
your tax liabilities by EFT. However, if you deposited all after June 30, 2021, and before January 1, 2022, you
taxes accumulated in the first 3 quarters of the year and must add the amounts from Worksheet 2, Step 2, line 2i,
your fourth quarter liability is less than $2,500, you may and Worksheet 4, Step 2, line 2i, together and report the
pay taxes accumulated during the fourth quarter with total on Form 944, line 10e.
Form 944. Also see section 11 of Pub. 15, section 8 of
Pub. 80, or section 11 of Pub. 179 for information about Credit for qualified wages paid after December 31,
payments made under the accuracy of deposits rule. The 2020, and before July 1, 2021. Enter the refundable
amount shown on line 9 must equal the amount shown on portion of the employee retention credit from Worksheet 2,
line 13m or the “Total tax liability for the year” shown on Step 2, line 2i. The employee retention credit is 70% of the
line M of Form 945-A, Annual Record of Federal Tax qualified wages for the employee retention credit paid
Liability. For more information, see the line 13 instructions, after December 31, 2020, and before July 1, 2021. The
later. refundable portion of the credit is allowed after the
employer share of social security tax is reduced to zero by
For more information and rules about federal tax
nonrefundable credits that are applied against the
deposits, see Must You Deposit Your Taxes, earlier, and
employer share of social security tax
section 11 of Pub. 15, section 8 of Pub. 80, or section 11
of Pub. 179. See Notice 2020-22 and Notice 2021-24 for The Infrastructure Act amends section 3134 of the
information on reducing deposits for certain credits. ! Internal Revenue Code, as enacted under the
CAUTION ARP, to limit the availability of the employee
-20- Instructions for Form 944 (2021)
retention credit in the fourth quarter of 2021 to employers wages, or qualified wages for the employee retention
that are recovery startup businesses, as defined in section credit, and/or provided COBRA premium assistance and
3134(c)(5). Thus, for wages paid after September 30, the amount of employment tax deposits they retained
2021, and before January 1, 2022, only the wages paid by wasn’t sufficient to cover their anticipated credits. Include
recovery startup businesses can be qualified wages as on line 10i any advance payment of the employee
described in these instructions. See Recovery startup retention credit that you received for the fourth quarter of
business, earlier, for more information about a recovery 2021 even if you're no longer eligible for the employee
startup business. retention credit because you're not a recovery startup
business. See Advance payment of COVID-19 credits
Credit for qualified wages paid after June 30, 2021, extended, earlier, for more information.
and before January 1, 2022. Enter the refundable
Form 7200 may be filed up to the earlier of
portion of the employee retention credit from Worksheet 4,
Step 2, line 2i. The employee retention credit is 70% of the TIP January 31, 2022, or the filing of Form 944 for the
year. However, if you file Form 7200 after the end
qualified wages for the employee retention credit paid
of the year, it's possible that it may not be processed prior
after June 30, 2021, and before January 1, 2022. The
to the processing of the filed Form 944. Advance payment
refundable portion of the credit is allowed after the
requests on Form 7200 won't be paid after your Form 944
employer share of Medicare tax is reduced to zero by
is processed. When the IRS processes Form 944, we will
nonrefundable credits that are applied against the
correct the amount reported on line 10i to match the
employer share of Medicare tax.
amount of advance payments issued or contact you to
10f. Refundable Portion of Credit for Qualified reconcile the difference before we finish processing Form
Sick and Family Leave Wages for Leave Taken 944.
After March 31, 2021, and Before October 1,
2021 10j. Total Deposits and Refundable Credits Less
Advances
Employers with fewer than 500 employees and certain
governmental employers without regard to number of Subtract line 10i from line 10h. Enter the result on line 10j.
employees (except for the federal government and its
11. Balance Due
agencies and instrumentalities unless described in
section 501(c)(1)) are entitled to a credit if they provide If line 9 is more than line 10j, enter the difference on
paid sick leave to employees that otherwise meets the line 11. Otherwise, see Overpayment, later. Never make
requirements of the EPSLA, as amended for purposes of an entry on both lines 11 and 12.
the ARP, and/or provide paid family leave to employees You don't have to pay if line 11 is less than $1.
that otherwise meets the requirements under the Generally, you should have a balance due only if your
Expanded FMLA, as amended for purposes of the ARP, total taxes after adjustments and nonrefundable credits
for leave taken after March 31, 2021, and before October (line 9) are less than $2,500. However, see If line 9 is
1, 2021. Enter the refundable portion of the credit for $2,500 or more under the instructions for line 9, Total
qualified sick and family leave wages from Worksheet 3, Taxes After Adjustments and Nonrefundable Credits,
Step 2, line 2s. The refundable portion of the credit is earlier, for exceptions.
allowed after the employer share of Medicare tax is If you were required to make federal tax deposits, pay
reduced to zero by nonrefundable credits that are applied the amount shown on line 11 by EFT. If you weren't
against the employer share of Medicare tax. required to make federal tax deposits (see the Federal
10g. Refundable Portion of COBRA Premium Tax Deposit Requirements for Form 944 Filers chart,
earlier) or you're a monthly schedule depositor making a
Assistance Credit payment under the accuracy of deposits rule, you may
Enter the refundable portion of the COBRA premium pay the amount shown on line 11 by EFT, credit card,
assistance credit from Worksheet 5, Step 2, line 2h. The debit card, check, money order, or EFW. For more
refundable portion of the credit is allowed after the information on electronic payment options, go to IRS.gov/
employer share of Medicare tax is reduced to zero by Payments.
nonrefundable credits that are applied against the
If you pay by EFT, credit card, or debit card, file your
employer share of Medicare tax.
return using the Without a payment address under Where
10h. Total Deposits and Refundable Credits Should You File, earlier. Don't file Form 944-V, Payment
Voucher.
Add lines 10a, 10d, 10e, 10f, and 10g. Enter the total on
line 10h. If you pay by check or money order, make it payable to
“United States Treasury.” Enter your EIN, “Form 944,” and
10i. Total Advances Received From Filing the tax period on your check or money order. Complete
Form(s) 7200 for the Year Form 944-V and enclose it with Form 944.
Enter the total advances received from filing Form(s) 7200 If you're required to make deposits and instead
for the year. If you filed Form 7200 but you haven’t ! pay the taxes with Form 944, you may be subject
received the advance before filing Form 944, don’t include CAUTION to a penalty.
that amount. Employers were eligible to file Form 7200 if
they paid qualified sick leave wages, qualified family leave What if you can't pay in full? If you can't pay the full
amount of tax you owe, you can apply for an installment
Instructions for Form 944 (2021) -21-
agreement online. You can apply for an installment The amount shown on line 13m must equal the
agreement online if: ! amount shown on line 9. If it doesn't, your tax
• You can't pay the full amount shown on line 11, CAUTION deposits and payments may not be counted as
• The total amount you owe is $25,000 or less, and timely. Don't reduce your total liability reported on line 13
• You can pay the liability in full in 24 months. by the refundable portion of the credit for qualified sick
To apply using the Online Payment Agreement and family leave wages, the refundable portion of the
Application, go to IRS.gov/OPA. employee retention credit, or the refundable portion of the
COBRA premium assistance credit. Don't change your
Under an installment agreement, you can pay what you
current year tax liability reported on line 13 by adjustments
owe in monthly installments. There are certain conditions
reported on any Forms 944-X.
you must meet to enter into and maintain an installment
agreement, such as paying the liability within 24 months, If you’re a semiweekly schedule depositor or if you
and making all required deposits and timely filing tax became one because you accumulated $100,000 or more
returns during the length of the agreement. in tax liability on any day in a deposit period, you must
If your installment agreement is accepted, you will be complete Form 945-A and file it with Form 944. See
charged a fee and you will be subject to penalties and $100,000 Next-Day Deposit Rule in section 11 of Pub. 15,
interest on the amount of tax not paid by the due date of section 8 of Pub. 80, or section 11 of Pub. 179. Don't
the return. complete lines 13a–13m if you file Form 945-A.
Adjusting tax liability for nonrefundable credits
12. Overpayment claimed on lines 8a, 8b, 8c, 8d, and 8e. Monthly
If line 10j is more than line 9, enter the amount on line 12. schedule depositors and semiweekly schedule depositors
Never make an entry on both lines 11 and 12. must account for nonrefundable credits claimed on lines
If you deposited more than the correct amount for the 8a, 8b, 8c, 8d, and 8e when reporting their tax liabilities on
year, you can choose to have the IRS either refund the line 13 or Form 945-A. The total tax liability for the year
overpayment or apply it to your next return. Check only must equal the amount reported on line 9. Failure to
one box on line 12. If you don't check either box or if you account for the nonrefundable credits on line 13 or Form
check both boxes, we will generally apply the 945-A may cause line 13 or Form 945-A to report more
overpayment to your next return. Regardless of any boxes than the total tax liability reported on line 9. Don't reduce
you check or don’t check on line 12, we may apply your your monthly tax liability reported on lines 13a through 13l
overpayment to any past due tax account that is shown in or your daily tax liability reported on Form 945-A below
our records under your EIN. zero.
Qualified small business payroll tax credit for
If line 12 is less than $1, we will send a refund or apply increasing research activities (line 8a). The qualified
it to your next return only if you ask us in writing to do so. small business payroll tax credit for increasing research
activities is limited to the employer share of social security
Part 2: Tell Us About Your Deposit tax on wages paid during the quarter that begins after the
Schedule and Tax Liability for This income tax return electing the credit has been filed. In
completing line 13 or Form 945-A, you take into account
Year the payroll tax credit against your liability for the employer
share of social security tax starting with the first payroll
13. Tax Liability payment of the quarter that includes payments of wages
If line 9 is less than $2,500, check the first box on line 13 to your employees subject to social security tax. The
and go to line 14. credit may be taken to the extent of the employer share of
If line 9 is $2,500 or more, check the second box on social security tax on wages associated with the first
line 13. If you’re a monthly schedule depositor, enter your payroll payment, and then to the extent of the employer
tax liability for each month and figure the total liability for share of social security tax associated with succeeding
the year. The amounts entered on line 13 are a summary payroll payments in the quarter until the credit is used.
of your monthly tax liabilities, not a summary of deposits Consistent with the entries on line 13 or Form 945-A, the
you made. The IRS gets deposit data from EFTs. Enter payroll tax credit should be taken into account in making
your tax liabilities in the month that corresponds to the deposits of employment tax. If any payroll tax credit is
dates you paid wages to your employees, not the date remaining at the end of the quarter that hasn’t been used
payroll liabilities were accrued or deposits were made. If completely because it exceeds the employer share of
you don't enter your tax liability for each month, the IRS social security tax for the quarter, the excess credit may
won't know when you should have made deposits and be carried forward to the succeeding quarter and allowed
may assess an “averaged” FTD penalty. See section 11 of as a payroll tax credit for the succeeding quarter. The
Pub. 15, section 8 of Pub. 80, or section 11 of Pub. 179. If payroll tax credit may not be taken as a credit against
your tax liability for any month is negative after accounting income tax withholding, Medicare tax, or the employee
for your adjustments reported on line 6, don't enter a share of social security tax.
negative amount for the month. Instead, enter zero for the Also, the remaining payroll tax credit may not be
month and subtract that negative amount from your tax carried back and taken as a credit against wages paid
liability for the next month. from preceding quarters that are reported on the same
Form 944 or on Forms 944 for preceding years. If an
amount of payroll tax credit is unused at the end of the
-22- Instructions for Form 944 (2021)
calendar year because it is in excess of the employer Example. Maple Co. is a monthly schedule depositor
share of social security tax on wages paid during the that pays employees every Friday. In 2021, Maple Co.
applicable quarters in the calendar year, the remaining had pay dates every Friday of 2021 starting January 1,
payroll tax credit may be carried forward to the first 2021. Maple Co. paid qualified sick and family leave
quarter of the succeeding calendar year as a payroll tax wages on March 12 and March 19. The nonrefundable
credit against the employer share of social security tax on portion of the credit for qualified sick and family leave
wages paid in that quarter. wages for the year is $300. On line 13, Maple Co. will use
Example. Rose Co. is an employer with a calendar tax the $300 to reduce the liability for the January 1 pay date,
year that filed its timely income tax return on April 15, but not below zero. If any nonrefundable portion of the
2021. Rose Co. elected to take the qualified small credit remains, Maple Co. applies it to the liability for the
business payroll tax credit for increasing research January 8 pay date, then the January 15 pay date, and so
activities on Form 6765. The third quarter of 2021 is the forth until the entire $300 is used.
first quarter that begins after Rose Co. filed the income tax Nonrefundable portion of employee retention
return making the payroll tax credit election. Therefore, credit for wages paid after December 31, 2020, and
the payroll tax credit applies against Rose Co.'s share of before July 1, 2021 (line 8c). The nonrefundable
social security tax on wages paid to employees in the third portion of the employee retention credit is limited to the
quarter of 2021. Rose Co. is a semiweekly schedule employer share of social security tax on wages paid
depositor. Rose Co. completes Form 945-A by reducing during the year that is remaining after that share is first
the amount of liability entered for the first payroll payment reduced by any credit claimed on Form 944, line 8a, for
in the third quarter of 2021 that includes wages subject to the qualified small business payroll tax credit for
social security tax by the lesser of (1) its share of social increasing research activities; any credit to be claimed on
security tax on the wages, or (2) the available payroll tax Form 5884-C, line 11, for the work opportunity credit for
credit. If the payroll tax credit elected is more than Rose qualified tax-exempt organizations hiring qualified
Co.'s share of social security tax on the first payroll veterans; any credit to be claimed on Form 5884-D for the
payment of the quarter, the excess payroll tax credit disaster credit for qualified tax-exempt organizations;
would be carried forward to succeeding payroll payments and/or any credit claimed on Form 944, line 8b, for the
in the third quarter until it is used. If the amount of the nonrefundable portion of the credit for qualified sick and
payroll tax credit exceeds Rose Co.'s share of social family leave wages for leave taken before April 1, 2021. In
security tax on wages paid to its employees in the third completing line 13 or Form 945-A, you take into account
quarter, the excess credit would be treated as a payroll the nonrefundable portion of the employee retention credit
tax credit against its share of social security tax on wages against the liability for the first payroll payment of the year,
paid in the fourth quarter. If the amount of the payroll tax but not below zero. Then reduce the liability for each
credit remaining exceeded Rose Co.'s share of social successive payroll payment of the year until the
security tax on wages paid in the fourth quarter, it could be nonrefundable portion of the credit is used. Any employee
carried forward and treated as a payroll tax credit for the retention credit that is remaining at the end of the year
first quarter of 2022. because it exceeds the employer share of social security
Nonrefundable portion of credit for qualified sick tax is claimed on line 10e as a refundable credit. The
and family leave wages for leave taken before April refundable portion of the credit doesn’t reduce the liability
1, 2021 (line 8b). The nonrefundable portion of the credit reported on line 13 or Form 945-A.
for qualified sick and family leave wages for leave taken Example. Maple Co. is a monthly schedule depositor
before April 1, 2021, is limited to the employer share of that pays employees every Friday. In 2021, Maple Co.
social security tax on wages paid during the year that is had pay dates every Friday of 2021 starting January 1,
remaining after that share is first reduced by any credit 2021. Maple Co. paid qualified wages for the employee
claimed on Form 944, line 8a, for the qualified small retention credit on May 7 and May 14. The nonrefundable
business payroll tax credit for increasing research portion of the employee retention credit for the year is
activities; any credit to be claimed on Form 5884-C, $300. On line 13, Maple Co. will use the $300 to reduce
line 11, for the work opportunity credit for qualified the liability for the January 1 pay date, but not below zero.
tax-exempt organizations hiring qualified veterans; and/or If any nonrefundable portion of the credit remains, Maple
any credit to be claimed on Form 5884-D for the disaster Co. applies it to the liability for the January 8 pay date,
credit for qualified tax-exempt organizations. In then the January 15 pay date, and so forth until the entire
completing line 13 or Form 945-A, you take into account $300 is used.
the nonrefundable portion of the credit for qualified sick The Infrastructure Act amends section 3134 of the
and family leave wages against the liability for the first Internal Revenue Code, as enacted under the
payroll payment of the year, but not below zero. Then !
CAUTION ARP, to limit the availability of the employee
reduce the liability for each successive payroll payment of retention credit in the fourth quarter of 2021 to employers
the year until the nonrefundable portion of the credit is that are recovery startup businesses, as defined in section
used. Any credit for qualified sick and family leave wages 3134(c)(5). Thus, for wages paid after September 30,
for leave taken before April 1, 2021, that is remaining at 2021, and before January 1, 2022, only the wages paid by
the end of the year because it exceeds the employer recovery startup businesses can be qualified wages as
share of social security tax is claimed on line 10d as a described in these instructions. See Recovery startup
refundable credit. The refundable portion of the credit
business, earlier, for more information about a recovery
doesn’t reduce the liability reported on line 13 or Form
startup business.
945-A.
Instructions for Form 944 (2021) -23-
If you're no longer eligible to claim the employee retention Nonrefundable portion of COBRA premium
credit for the fourth quarter of 2021, but you already assistance credit (line 8e). The nonrefundable portion
reduced your employment tax deposits in anticipation of of the COBRA premium assistance credit is limited to the
claiming the employee retention credit for the fourth employer share of Medicare tax on wages paid during the
quarter of 2021, you must deposit the amounts initially year that is remaining after that share is first reduced by
retained in anticipation of the employee retention credit on any credit claimed on Form 944, line 8d, for the
or before the due date of the deposit for wages paid on nonrefundable portion of the credit for qualified sick and
December 31, 2021 (regardless of whether wages are family leave wages for leave taken after March 31, 2021;
actually paid on that date), based on how you choose to and/or any credit claimed on Form 944, line 8c, for the
report the tax liability resulting from the termination of the nonrefundable portion of the employee retention credit for
employee retention credit on Form 945-A or, if a monthly wages paid after June 30, 2021, and before January 1,
depositor, on Form 944, line 13l. In order to obtain the 2022. In completing line 13 or Form 945-A, you take into
relief under Notice 2021-65 and avoid an FTD penalty, account the nonrefundable portion of the COBRA
employers must deposit the amounts in accordance with premium assistance credit against the liability for the first
the due date or dates of the applicable day or days the tax payroll payment of the year, but not below zero. Then
liabilities resulting from the termination of the employee reduce the liability for each successive payroll payment in
retention credit are reported on Form 945-A or Form 944, the year until the nonrefundable portion of the credit is
line 13l, as applicable. However, this relief doesn't apply used. Any COBRA premium assistance credit that is
to deposit payments that were untimely due to any remaining at the end of the year because it exceeds the
circumstance other than the change in eligibility for the employer share of Medicare tax is claimed on line 10g as
employee retention credit or to employers who reduced a refundable credit. The refundable portion of the credit
deposits after December 20, 2021. See Notice 2021-65 doesn’t reduce the liability reported on line 13 or Form
for more information. 945-A.
Nonrefundable portion of employee retention You may reduce your deposits by the amount of
credit for wages paid after June 30, 2021, and before TIP the nonrefundable and refundable portions of the
January 1, 2022 (line 8c). The nonrefundable portion of credit for qualified sick and family leave wages,
the employee retention credit is limited to the employer the nonrefundable and refundable portions of the
share of Medicare tax on wages paid during the year that employee retention credit, and the nonrefundable and
is remaining after that share is first reduced by any credit refundable portions of the COBRA premium assistance
claimed on Form 944, line 8d, for the nonrefundable credit, as discussed earlier under Reducing your deposits
portion of the credit for qualified sick and family leave for COVID-19 credits.
wages for leave taken after March 31, 2021. In completing
line 13 or Form 945-A, you take into account the
nonrefundable portion of the employee retention credit
Part 3: Tell Us About Your Business
against the liability for the first payroll payment of the year, In Part 3, answer only those questions that apply to your
but not below zero. Then reduce the liability for each business. If the questions don't apply, leave them blank
successive payroll payment in the year until the and go to Part 4.
nonrefundable portion of the credit is used. Any employee
retention credit that is remaining at the end of the year 14. If Your Business Has Closed...
because it exceeds the employer share of Medicare tax is If you permanently go out of business or stop paying
claimed on line 10e as a refundable credit. The refundable wages, you must file a final return. To tell the IRS that a
portion of the credit doesn’t reduce the liability reported on particular Form 944 is your final return, check the box on
line 13 or Form 945-A. line 14 and enter the date you last paid wages in the
Nonrefundable portion of credit for qualified sick space provided. For additional filing requirements,
and family leave wages for leave taken after March including information about attaching a statement to your
31, 2021, and before October 1, 2021 (line 8d). The final return, see If Your Business Has Closed..., earlier.
nonrefundable portion of the credit for qualified sick and
family leave wages for leave taken after March 31, 2021, Lines 15 Through 26
and before October 1, 2021, is limited to the employer
The amounts entered on lines 15 through 24 are
share of Medicare tax on wages paid during the year. In
! amounts that you use on the worksheets at the
completing line 13 or Form 945-A, you take into account
CAUTION end of these instructions to figure certain credits.
the nonrefundable portion of the credit for qualified sick
If you’re claiming these credits, you must enter the
and family leave wages against the liability for the first
applicable amounts. Lines 25 and 26 apply only if you're
payroll payment of the year, but not below zero. Then
eligible for the employee retention credit in the third or
reduce the liability for each successive payroll payment in
fourth quarter of 2021 solely because your business is a
the year until the nonrefundable portion of the credit is
recovery startup business.
used. Any credit for qualified sick and family leave wages
for leave taken after March 31, 2021, and before October
1, 2021, that is remaining at the end of the year because it 15. Qualified Health Plan Expenses Allocable to
exceeds the employer share of Medicare tax is claimed on Qualified Sick Leave Wages for Leave Taken
line 10f as a refundable credit. The refundable portion of Before April 1, 2021
the credit doesn’t reduce the liability reported on line 13 or Enter the qualified health plan expenses allocable to
Form 945-A. qualified sick leave wages for leave taken before April 1,
-24- Instructions for Form 944 (2021)
2021. This amount is also entered on Worksheet 1, Step 20. Qualified Health Plan Expenses Allocable to
2, line 2b. Qualified Sick Leave Wages Reported on
16. Qualified Health Plan Expenses Allocable to Line 19
Qualified Family Leave Wages for Leave Taken Enter the qualified health plan expenses allocable to
qualified sick leave wages for leave taken after March 31,
Before April 1, 2021
2021, and before October 1, 2021. This amount is also
Enter the qualified health plan expenses allocable to entered on Worksheet 3, Step 2, line 2b.
qualified family leave wages for leave taken before April 1,
2021. This amount is also entered on Worksheet 1, Step 21. Amounts Under Certain Collectively
2, line 2f. Bargained Agreements Allocable to Qualified
The total amount reported on lines 17 and 18, Sick Leave Wages Reported on Line 19
! discussed next, can't exceed $10,000 per Enter the collectively bargained defined benefit pension
CAUTION employee each quarter.
plan contributions and collectively bargained
apprenticeship program contributions allocable to
17. Qualified Wages for the Employee Retention qualified sick leave wages for leave taken after March 31,
Credit 2021, and before October 1, 2021. This amount is also
Enter the qualified wages for the employee retention entered on Worksheet 3, Step 2, line 2c.
credit (excluding the amount of any qualified health plan 22. Qualified Family Leave Wages for Leave
expenses). For qualified wages paid after December 31,
2020, and before July 1, 2021, the applicable qualified
Taken After March 31, 2021, and Before October
wages from the total entered on line 17 are entered on 1, 2021
Worksheet 2, Step 2, line 2a. For qualified wages paid Enter the qualified family leave wages you paid to your
after June 30, 2021, and before January 1, 2022, the employees for leave taken after March 31, 2021, and
applicable qualified wages from the total on line 17 are before October 1, 2021, including any qualified family
entered on Worksheet 4, Step 2, line 2a. leave wages that were above the social security wage
base and any qualified family leave wages excluded from
18. Qualified Health Plan Expenses for the the definition of employment under sections 3121(b)(1)–
Employee Retention Credit (22). See the instructions for line 8d, earlier, for more
Enter the qualified health plan expenses for the employee information about qualified family leave wages for leave
retention credit. These expenses are generally those taken after March 31, 2021, and before October 1, 2021.
which are allocable to an employee (and to a period) in This amount is also entered on Worksheet 3, Step 2,
which your business operations are fully or partially line 2g.
suspended due to a governmental order or experience a
decline in gross receipts. The allocation will be treated as
23. Qualified Health Plan Expenses Allocable to
proper if made on the basis of being pro rata among Qualified Family Leave Wages Reported on
periods of coverage. For more information, go to IRS.gov/ Line 22
ERC. For qualified health plan expenses allocable to Enter the qualified health plan expenses allocable to
qualified wages paid after December 31, 2020, and before qualified family leave wages for leave taken after March
July 1, 2021, the applicable qualified expenses from the 31, 2021, and before October 1, 2021. This amount is also
total entered on line 18 are entered on Worksheet 2, Step entered on Worksheet 3, Step 2, line 2h.
2, line 2b. For qualified health plan expenses allocable to
qualified wages paid after June 30, 2021, and before 24. Amounts Under Certain Collectively
January 1, 2022, the applicable qualified expenses from Bargained Agreements Allocable to Qualified
the total entered on line 18 are entered on Worksheet 4, Family Leave Wages Reported on Line 22
Step 2, line 2b.
Enter the collectively bargained defined benefit pension
19. Qualified Sick Leave Wages for Leave Taken plan contributions and collectively bargained
apprenticeship program contributions allocable to
After March 31, 2021, and Before October 1, qualified family leave wages for leave taken after March
2021 31, 2021, and before October 1, 2021. This amount is also
Enter the qualified sick leave wages you paid to your entered on Worksheet 3, Step 2, line 2i.
employees for leave taken after March 31, 2021, and
before October 1, 2021, including any qualified sick leave 25. If You’re Eligible for the Employee Retention
wages that were above the social security wage base and Credit in the Third Quarter Solely Because Your
any qualified sick leave wages excluded from the Business Is a Recovery Startup Business . . .
definition of employment under sections 3121(b)(1)–(22).
If you're eligible for the employee retention credit in the
See the instructions for line 8d, earlier, for more
third quarter of 2021 solely because your business is a
information about qualified sick leave wages for leave
recovery startup business, enter the total of any amounts
taken after March 31, 2021, and before October 1, 2021.
included on lines 8c and 10e that are attributable to
This amount is also entered on Worksheet 3, Step 2,
qualified wages paid after June 30, 2021, and before
line 2a.
October 1, 2021.
Instructions for Form 944 (2021) -25-
26. If You’re Eligible for the Employee Retention • Partnership (including an LLC treated as a
Credit in the Fourth Quarter Solely Because partnership) or unincorporated organization—A
Your Business Is a Recovery Startup responsible and duly authorized partner, member, or
officer having knowledge of its affairs.
Business . . . • Single-member LLC treated as a disregarded entity
Under the Infrastructure Act, you must be a recovery for federal income tax purposes—The owner of the
startup business to claim the employee retention credit for LLC or a principal officer duly authorized to sign.
qualified wages paid after September 30, 2021, and • Trust or estate—The fiduciary.
before January 1, 2022 (fourth quarter 2021). If you're
eligible for the employee retention credit in the fourth Form 944 may be signed by a duly authorized agent of
quarter of 2021 solely because your business is a the taxpayer if a valid power of attorney has been filed.
recovery startup business, enter the total of any amounts Alternative signature method. Corporate officers or
included on lines 8c and 10e that are attributable to duly authorized agents may sign Form 944 by rubber
qualified wages paid after September 30, 2021, and stamp, mechanical device, or computer software
before January 1, 2022. program. For details and required documentation, see
Rev. Proc. 2005-39, 2005-28 I.R.B. 82, available at
Part 4: May We Speak With Your IRS.gov/irb/2005-28_IRB#RP-2005-39.
Third-Party Designee?
Paid Preparer Use Only
If you want to allow an employee, a paid tax preparer, or A paid preparer must sign Form 944 and provide the
another person to discuss your Form 944 with the IRS, information in the Paid Preparer Use Only section of Part
check the “Yes” box in Part 4. Enter the name, phone 5 if the preparer was paid to prepare Form 944 and isn't
number, and five-digit personal identification number an employee of the filing entity. Paid preparers must sign
(PIN) of the specific person to speak with—not the name paper returns with a manual signature. The preparer must
of the firm that prepared your tax return. The designee give you a copy of the return in addition to the copy to be
may choose any five numbers as his or her PIN. filed with the IRS.
By checking “Yes,” you authorize the IRS to talk to the
If you’re a paid preparer, enter your Preparer Tax
person you named (your designee) about any questions
Identification Number (PTIN) in the space provided.
we may have while we process your return. You also
Include your complete address. If you work for a firm,
authorize your designee to do all of the following.
enter the firm's name and the EIN of the firm. You can
• Give us any information that is missing from your return. apply for a PTIN online or by filing Form W-12. For more
• Call us for information about processing your return. information about applying for a PTIN online, go to
• Respond to certain IRS notices that you have shared IRS.gov/PTIN. You can't use your PTIN in place of the EIN
with your designee about math errors and return of the tax preparation firm.
preparation. The IRS won't send notices to your designee.
Generally, don't complete this section if you’re filing the
You’re not authorizing your designee to bind you to
return as a reporting agent and have a valid Form 8655 on
anything (including additional tax liability) or to otherwise
file with the IRS. However, a reporting agent must
represent you before the IRS. If you want to expand your
complete this section if the reporting agent offered legal
designee's authorization, see Pub. 947.
advice, for example, advising the client on determining
The authorization will automatically expire 1 year after whether its workers are employees or independent
the due date (without regard to extensions) for filing your contractors for federal tax purposes.
Form 944. If you or your designee wants to terminate the
authorization, write to the IRS office for your location using
the Without a payment address under Where Should You How To Get Forms, Instructions, and
File, earlier. Publications
Part 5: Sign Here (Approved Roles) You can view, download, or print most of the
forms, instructions, and publications you may
Complete all information and sign Form 944. The need at IRS.gov/Forms. Otherwise, you can go to
following persons are authorized to sign the return for IRS.gov/OrderForms to place an order and have forms
each type of business entity. mailed to you.
• Sole proprietorship—The individual who owns the
business.
• Corporation (including a limited liability company
(LLC) treated as a corporation)—The president, vice
president, or other principal officer duly authorized to sign.
-26- Instructions for Form 944 (2021)
Worksheet 1. Credit for Qualified Sick and Family Leave Wages for
Leave Taken Before April 1, 2021 Keep for Your Records
Determine how you will complete this worksheet.
If you paid qualified sick leave wages and/or qualified family leave wages for leave taken before April 1, 2021, complete Step 1 and Step 2.
Caution: Use Worksheet 3 to figure the credit for qualified sick and family leave wages for leave taken after March 31, 2021, and before October
1, 2021.
Step 1. Determine the employer share of social security tax after it is reduced by any credit claimed on Form 8974 and any
credit to be claimed on Form 5884-C and/or Form 5884-D
1a Enter the amount of social security tax from Form 944, Part 1, line 4a,
column 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1a
1b Enter the amount of social security tax from Form 944, Part 1, line 4b,
column 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1b
1c Add lines 1a and 1b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1c
1d Multiply line 1c by 50% (0.50) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1d
1e If you’re a third-party payer of sick pay that isn't an agent and you're claiming credits
for amounts paid to your employees, enter the employer share of social security tax
included on Form 944, Part 1, line 6 (enter as a positive number) . . . . . . . . . . . . . . . . 1e
1f Employer share of social security tax. Subtract line 1e from line 1d . . . . . . . . . . . 1f
1g Enter the amount from Form 944, Part 1, line 8a (credit from Form 8974) . . . . . . . . . . 1g
1h Enter the amount to be claimed on Form 5884-C, line 11, for this year . . . . . . . . . . . . 1h
1i Enter the amount to be claimed on Form 5884-D, line 12, for this year . . . . . . . . . . . . 1i
1j Total nonrefundable credits already used against the employer share of social
security tax. Add lines 1g, 1h, and 1i . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1j
1k Employer share of social security tax remaining. Subtract line 1j
from line 1f . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1k
Step 2. Figure the sick and family leave credit
2a Qualified sick leave wages reported on Form 944, Part 1, line 4a(i), column 1 . . . . . . 2a
2a(i) Qualified sick leave wages included on Form 944, Part 1, line 4c, but not included on
Form 944, Part 1, line 4a(i), column 1, because the wages reported on that line were
limited by the social security wage base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a(i)
2a(ii) Total qualified sick leave wages. Add lines 2a and 2a(i) . . . . . . . . . . . . . . . . . . . . . . . 2a(ii)
2a(iii) Qualified sick leave wages excluded from the definition of employment under sections
3121(b)(1)–(22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a(iii)
2b Qualified health plan expenses allocable to qualified sick leave wages (Form 944, Part
3, line 15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2b
2c Employer share of Medicare tax on qualified sick leave wages. Multiply line 2a(ii) by
1.45% (0.0145) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2c
2d Credit for qualified sick leave wages. Add lines 2a(ii), 2a(iii), 2b, and 2c . . . . . . . . 2d
2e Qualified family leave wages reported on Form 944, Part 1, line 4a(ii),
column 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2e
2e(i) Qualified family leave wages included on Form 944, Part 1, line 4c, but not included on
Form 944, Part 1, line 4a(ii), column 1, because the wages reported on that line were
limited by the social security wage base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2e(i)
2e(ii) Total qualified family leave wages. Add lines 2e and 2e(i) . . . . . . . . . . . . . . . . . . . . . 2e(ii)
2e(iii) Qualified family leave wages excluded from the definition of employment under
sections 3121(b)(1)–(22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2e(iii)
2f Qualified health plan expenses allocable to qualified family leave wages (Form 944,
Part 3, line 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2f
2g Employer share of Medicare tax on qualified family leave wages. Multiply line 2e(ii) by
1.45% (0.0145) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2g
2h Credit for qualified family leave wages. Add lines 2e(ii), 2e(iii), 2f, and 2g . . . . . . . 2h
2i Credit for qualified sick and family leave wages. Add lines 2d and 2h . . . . . . . . . 2i
2j Nonrefundable portion of credit for qualified sick and family leave wages for
leave taken before April 1, 2021. Enter the smaller of line 1k or line 2i. Enter this
amount on Form 944, Part 1, line 8b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2j
2k Refundable portion of credit for qualified sick and family leave wages for leave
taken before April 1, 2021. Subtract line 2j from line 2i and enter this amount on
Form 944, Part 1, line 10d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2k
Instructions for Form 944 (2021) -27-
Worksheet 2. Employee Retention Credit for Qualified Wages Paid
After December 31, 2020, and Before July 1, 2021 Keep for Your Records
Determine how you will complete this worksheet.
If you paid qualified wages after December 31, 2020, and before July 1, 2021, for purposes of the employee retention credit, complete Step 1 and Step
2. If you're claiming a credit for qualified sick and family leave wages for leave taken before April 1, 2021, complete Worksheet 1 before starting this
worksheet. Caution: Use Worksheet 4 to figure the employee retention credit for qualified wages paid after June 30, 2021, and before January 1, 2022.
Step 1. Determine the employer share of social security tax after it is reduced by any credit claimed on Form 8974 and any credit
to be claimed on Form 5884-C and/or Form 5884-D
1a If you completed Worksheet 1 to claim a credit for qualified sick and family leave wages for
leave taken before April 1, 2021, enter the amount from Worksheet 1, Step 1, line 1k, and
go to Step 2. If you're not claiming a credit for qualified sick and family leave wages for
leave taken before April 1, 2021, continue by completing lines1b–1l below and then go to
Step 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1a
1b Enter the amount of social security tax from Form 944, Part 1, line 4a, column 2 . . . . . . . 1b
1c Enter the amount of social security tax from Form 944, Part 1, line 4b, column 2 . . . . . . . 1c
1d Add lines 1b and 1c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1d
1e Multiply line 1d by 50% (0.50) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1e
1f If you’re a third-party payer of sick pay that isn't an agent and you're claiming credits for
amounts paid to your employees, enter the employer share of social security tax included
on Form 944, Part 1, line 6 (enter as a positive number) . . . . . . . . . . . . . . . . . . . . . . . . . 1f
1g Employer share of social security tax. Subtract line 1f from line 1e . . . . . . . . . . . . . . 1g
1h Enter the amount from Form 944, Part 1, line 8a (credit from Form 8974) . . . . . . . . . . . . . 1h
1i Enter the amount to be claimed on Form 5884-C, line 11, for this year . . . . . . . . . . . . . . . 1i
1j Enter the amount to be claimed on Form 5884-D, line 12, for this year . . . . . . . . . . . . . . . 1j
1k Total nonrefundable credits already used against the employer share of social
security tax. Add lines 1h, 1i, and 1j . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1k
1l Employer share of social security tax remaining. Subtract line 1k from line 1g . . . . . . 1l
Step 2. Figure the employee retention credit for qualified wages paid after December 31, 2020, and before July 1, 2021
Caution: The total amount included on lines 2a and 2b is limited to a maximum of $10,000
per employee in each of the first quarter and the second quarter of 2021 ($20,000 in total
for purposes of this worksheet).
2a Qualified wages (excluding qualified health plan expenses) for the employee retention
credit for qualified wages paid after December 31, 2020, and before July 1, 2021 (these
qualified wages are included in the total reported on Form 944, Part 3, line 17) . . . . . . . . 2a
2b Qualified health plan expenses allocable to qualified wages for the employee retention
credit for qualified wages paid after December 31, 2020, and before July 1, 2021 (these
qualified health plan expenses are included in the total reported on Form 944, Part 3,
line 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2b
2c Add lines 2a and 2b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2c
2d Retention credit. Multiply line 2c by 70% (0.70) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2d
2e Enter the amount of the employer share of social security tax from Step 1, line 1a, or, if
applicable, Step 1, line 1l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2e
2f Enter the nonrefundable portion of the credit for qualified sick and family leave wages for
leave taken before April 1, 2021, from Worksheet 1, Step 2, line 2j . . . . . . . . . . . . . . . . . 2f
2g Subtract line 2f from line 2e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2g
2h Nonrefundable portion of employee retention credit. Enter the smaller of line 2d or
line 2g. Enter this amount on Form 944, Part 1, line 8c . . . . . . . . . . . . . . . . . . . . . . . . . . 2h
2i Refundable portion of employee retention credit. Subtract line 2h from line 2d and
enter this amount on Form 944, Part 1, line 10e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2i
-28- Instructions for Form 944 (2021)
Worksheet 3. Credit for Qualified Sick and Family Leave Wages for
Leave Taken After March 31, 2021, and Before October 1, 2021 Keep for Your Records
Determine how you will complete this worksheet.
If you paid qualified sick leave wages and/or qualified family leave wages for leave taken after March 31, 2021, and before October 1, 2021, complete
Step 1 and Step 2. Caution: Use Worksheet 1 to figure the credit for qualified sick and family leave wages for leave taken before April 1, 2021.
Step 1. Determine the employer share of Medicare tax
1a Enter the amount of Medicare tax from Form 944, Part 1, line 4c, column 2 . . . . . . . . . . . 1a
1b Multiply line 1a by 50% (0.50) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1b
1c If you're a third-party payer of sick pay that isn't an agent and you're claiming credits for
amounts paid to your employees, enter the employer share of Medicare tax included on
Form 944, Part 1, line 6 (enter as a positive number) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1c
1d Employer share of Medicare tax. Subtract line 1c from line 1b . . . . . . . . . . . . . . . . . . 1d
Step 2. Figure the sick and family leave credit
2a Qualified sick leave wages for leave taken after March 31, 2021, and before October 1,
2021 (Form 944, Part 3, line 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a
2a(i) Qualified sick leave wages included on Form 944, Part 3, line 19, that were not included as
wages reported on Form 944, Part 1, lines 4a and 4c, because the qualified sick leave
wages were excluded from the definition of employment under sections 3121(b)(1)–
(22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a(i)
2a(ii) Subtract line 2a(i) from line 2a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a(ii)
2a(iii) Qualified sick leave wages included on Form 944, Part 3, line 19, that were not included as
wages reported on Form 944, Part 1, line 4a, because the qualified sick leave wages were
limited by the social security wage base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a(iii)
2a(iv) Subtract line 2a(iii) from line 2a(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a(iv)
2b Qualified health plan expenses allocable to qualified sick leave wages for leave taken after
March 31, 2021, and before October 1, 2021 (Form 944, Part 3, line 20) . . . . . . . . . . . . . 2b
2c Amounts under certain collectively bargained agreements allocable to qualified sick leave
wages for leave taken after March 31, 2021, and before October 1, 2021 (Form 944, Part
3, line 21) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2c
2d Employer share of social security tax on qualified sick leave wages. Multiply line 2a(iv) by
6.2% (0.062) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2d
2e Employer share of Medicare tax on qualified sick leave wages. Multiply line 2a(ii) by 1.45%
(0.0145) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2e
2f Credit for qualified sick leave wages. Add lines 2a, 2b, 2c, 2d, and 2e . . . . . . . . . . . . 2f
2g Qualified family leave wages for leave taken after March 31, 2021, and before October 1,
2021 (Form 944, Part 3, line 22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2g
2g(i) Qualified family leave wages included on Form 944, Part 3, line 22, that were not included
as wages reported on Form 944, Part 1, lines 4a and 4c, because the qualified family leave
wages were excluded from the definition of employment under sections 3121(b)(1)–
(22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2g(i)
2g(ii) Subtract line 2g(i) from line 2g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2g(ii)
2g(iii) Qualified family leave wages included on Form 944, Part 3, line 22, that were not included
as wages reported on Form 944, Part 1, line 4a, because the qualified family leave wages
were limited by the social security wage base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2g(iii)
2g(iv) Subtract line 2g(iii) from line 2g(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2g(iv)
2h Qualified health plan expenses allocable to qualified family leave wages for leave taken
after March 31, 2021, and before October 1, 2021 (Form 944, Part 3, line 23) . . . . . . . . . 2h
2i Amounts under certain collectively bargained agreements allocable to qualified family
leave wages for leave taken after March 31, 2021, and before October 1, 2021 (Form 944,
Part 3, line 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2i
2j Employer share of social security tax on qualified family leave wages. Multiply line 2g(iv)
by 6.2% (0.062) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2j
2k Employer share of Medicare tax on qualified family leave wages. Multiply line 2g(ii) by
1.45% (0.0145) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2k
2l Credit for qualified family leave wages. Add lines 2g, 2h, 2i, 2j, and 2k . . . . . . . . . . . . 2l
2m Credit for qualified sick and family leave wages. Add lines 2f and 2l . . . . . . . . . . . . . 2m
2n Enter any employee retention credit claimed under section 2301 of the CARES Act (from
Worksheet 2, line 2d) with respect to qualified wages paid after March 31, 2021, and
before July 1, 2021, that were also taken into account for the credit for qualified sick and
family leave wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2n
2o Enter any credit claimed under section 41 for increasing research activities with respect to
any wages taken into account for the credit for qualified sick and family leave
wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2o
2p Add lines 2n and 2o . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2p
2q Credit for qualified sick and family leave wages after adjusting for other credits.
Subtract line 2p from line 2m . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2q
2r Nonrefundable portion of credit for qualified sick and family leave wages for leave
taken after March 31, 2021, and before October 1, 2021. Enter the smaller of line 1d or
line 2q. Enter this amount on Form 944, Part 1, line 8d . . . . . . . . . . . . . . . . . . . . . . . . . . 2r
2s Refundable portion of credit for qualified sick and family leave wages for leave
taken after March 31, 2021, and before October 1, 2021. Subtract line 2r from line 2q
and enter this amount on Form 944, Part 1, line 10f . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2s
Instructions for Form 944 (2021) -29-
Worksheet 4. Employee Retention Credit for Qualified Wages Paid
After June 30, 2021, and Before January 1, 2022 Keep for Your Records
Determine how you will complete this worksheet.
If you paid qualified wages after June 30, 2021, and before January 1, 2022, for purposes of the employee retention credit, complete Step 1 and Step 2.
If you're claiming a credit for qualified sick and family leave wages for leave taken after March 31, 2021, complete Worksheet 3 before starting this
worksheet. Caution: Use Worksheet 2 to figure the employee retention credit for qualified wages paid after December 31, 2020, and before July 1,
2021.
Step 1. Determine the employer share of Medicare tax
1a If you completed Worksheet 3 to claim a credit for qualified sick and family leave wages for
leave taken after March 31, 2021, enter the amount from Worksheet 3, Step 1, line 1d, and
go to Step 2. If you're not claiming a credit for qualified sick and family leave wages for
leave taken after March 31, 2021, continue by completing lines 1b–1e below and then go
to Step 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1a
1b Enter the amount of Medicare tax from Form 944, Part 1, line 4c, column 2 . . . . . . . . . . . 1b
1c Multiply line 1b by 50% (0.50) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1c
1d If you're a third-party payer of sick pay that isn't an agent and you're claiming credits for
amounts paid to your employees, enter the employer share of Medicare tax included on
Form 944, Part 1, line 6 (enter as a positive number) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1d
1e Employer share of Medicare tax. Subtract line 1d from line 1c . . . . . . . . . . . . . . . . . . 1e
Step 2. Figure the employee retention credit for qualified wages paid after June 30, 2021, and before January 1, 2022
Caution: Under the Infrastructure Act, you must be a recovery startup business to claim
the employee retention credit for qualified wages paid after September 30, 2021, and
before January 1, 2022 (fourth quarter 2021). The total amount included on lines 2a and 2b
is limited to a maximum of $10,000 per employee in each of the third quarter and the fourth
quarter of 2021 ($20,000 in total for purposes of this worksheet).
2a Qualified wages (excluding qualified health plan expenses) for the employee retention
credit for qualified wages paid after June 30, 2021, and before January 1, 2022 (these
qualified wages are included in the total reported on Form 944, Part 3, line 17) . . . . . . . . 2a
2b Qualified health plan expenses allocable to qualified wages for the employee retention
credit for qualified wages paid after June 30, 2021, and before January 1, 2022 (these
qualified health plan expenses are included in the total reported on Form 944, Part 3,
line 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2b
2c Add lines 2a and 2b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2c
2d Retention credit. Multiply line 2c by 70% (0.70). If you qualify for the employee retention
credit solely because your business is a recovery startup business, don't enter more than
$50,000 for each of the third quarter and fourth quarter of 2021 ($100,000 in total for the
year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2d
2e Enter the amount of the employer share of Medicare tax from Step 1, line 1a, or, if
applicable, Step 1, line 1e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2e
2f Enter the amount of the nonrefundable portion of the credit for qualified sick and family
leave wages for leave taken after March 31, 2021, from Worksheet 3, Step 2,
line 2r . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2f
2g Subtract line 2f from line 2e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2g
2h Nonrefundable portion of employee retention credit. Enter the smaller of line 2d or
line 2g. Enter this amount on Form 944, Part 1, line 8c . . . . . . . . . . . . . . . . . . . . . . . . . . 2h
2i Refundable portion of employee retention credit. Subtract line 2h from line 2d and
enter this amount on Form 944, Part 1, line 10e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2i
-30- Instructions for Form 944 (2021)
Worksheet 5. COBRA Premium Assistance Credit Keep for Your Records
Determine how you will complete this worksheet.
If you provided COBRA premium assistance, complete Step 1 and Step 2. If you're claiming the credit for qualified sick and family leave wages for leave
taken after March 31, 2021, complete Worksheet 3 before starting this worksheet. If you're also claiming an employee retention credit for qualified
wages paid after June 30, 2021, and before January 1, 2022, complete Worksheet 4 before starting this worksheet.
Step 1. Determine the employer share of Medicare tax
1a If you completed Worksheet 3 or Worksheet 4, enter the amount listed on Worksheet 3,
line 1d, or Worksheet 4, line 1a or 1e (as applicable). If you're not claiming either of these
credits this year, continue by completing lines 1b–1e below and then go to Step 2 . . . . . . 1a
1b Enter the amount of Medicare tax from Form 944, Part 1, line 4c, column 2 . . . . . . . . . . . 1b
1c Multiply line 1b by 50% (0.50) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1c
1d If you’re a third-party payer of sick pay that isn't an agent and you're claiming credits for
amounts paid to your employees, enter the employer share of Medicare tax included on
Form 944, Part 1, line 6 (enter as a positive number) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1d
1e Employer share of Medicare tax. Subtract line 1d from line 1c . . . . . . . . . . . . . . . . . . 1e
Step 2. Figure the COBRA premium assistance credit
2a Enter the COBRA premium assistance that you provided for periods of coverage beginning
on or after April 1, 2021, through periods of coverage beginning on or before September
30, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a
2b Enter the amount of the employer share of Medicare tax from Step 1, line 1a, or, if
applicable, Step 1, line 1e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2b
2c Enter the amount of the nonrefundable portion of the credit for qualified sick and family
leave wages for leave taken after March 31, 2021, from Worksheet 3, Step 2,
line 2r . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2c
2d Enter the amount of the nonrefundable portion of the employee retention credit from
Worksheet 4, Step 2, line 2h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2d
2e Other nonrefundable credits used against the employer share of Medicare tax. Add
lines 2c and 2d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2e
2f Subtract line 2e from line 2b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2f
2g Nonrefundable portion of the COBRA premium assistance credit. Enter the smaller
of line 2a or line 2f. Enter this amount on Form 944, Part 1, line 8e . . . . . . . . . . . . . . . . . 2g
2h Refundable portion of the COBRA premium assistance credit. Subtract line 2g from
line 2a and enter this amount on Form 944, Part 1, line 10g . . . . . . . . . . . . . . . . . . . . . . 2h
Instructions for Form 944 (2021) -31-
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