Federal Payroll Forms

Federal payroll forms tell the IRS important information about who is working as an employee (as opposed to an independent contractor), their quarterly wages, how much money was withheld from their paychecks for federal income tax, Social Security tax and FICA. They also tell the IRS how much money the company owes as its share of Social Security and FICA taxes.

These forms are filed at various times of the tax year. Payments to the US Treasury are made independently of the forms being filed. Usually, money has to be deposited within a certain time after wages are paid. Forms are filed quarterly and annually.

The quarterly form is Form 941, Employers Quarterly Federal Tax Return, and the annual one is Form 944, Employer’s Annual Federal Tax Return.  

While not technically a payroll form, if independent contractors work for the company a form 1099-MISC has to be filed at the end of the year for each contractor who was paid at least $600 for the year.  

By the end of January of the following year, Form W-2 must be distributed to each employee. The W-2 and 1099 are summaries of wages paid during the year and copies are given to both the worker and the IRS.

Two other federal payroll forms which do not need to be sent to the IRS, but need to be available if requested, are the W-4 and the W-9, Request for Taxpayer Identification Number and Certification. On the W-4 employees indicate their exemptions from withholding or other information pertaining to their federal tax withholding amount. The W-9 is filled out by independent contractors to give employers their taxpayer identification number and to certify the information is correct.

Other forms to be aware of are Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund and Form 944-X, Adjusted Employer’s Annual Federal Tax Return or Claim for Refund, which are used to correct errors made on 941s and 944s that have already been filed.  

Timeliness is very important with the deposits of payments and filing of federal payroll forms. Penalties for late deposits range from 2% - 15%, and a failure-to-file penalty of 5% - 25% of any unpaid tax due, when forms 941 or 944 are filed late.