Instructions for Form 944-X, Adjusted Employer's Annual Federal Tax Return or Claim for Refund

• Legal Form Number: 944-X
• Year: 2024
• Issuer: Treasury Department
• Section: Treasury Department

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Instructions for Form 944-X

(Rev. February 2024)

Adjusted Employer's ANNUAL Federal Tax Return or Claim for Refund

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code

unless otherwise noted.

Contents Page

Future Developments ........................ 1

What's New ............................... 1

Reminders ................................ 2

General Instructions: Understanding Form 944-X .... 3

What Is the Purpose of Form 944-X? .......... 3

Where Can You Get Help? .................. 4

When Should You File Form 944-X? ........... 5

Is There a Deadline for Filing Form 944-X? ...... 5

Where Should You File Form 944-X? .......... 6

How Should You Complete Form 944-X? ....... 6

Overview of the Process ................... 7

Specific Instructions: ......................... 7

Part 1: Select ONLY One Process ............ 7

Part 2: Complete the Certifications ............ 8

Part 3: Enter the Corrections for the Calendar

Year You’re Correcting ................... 9

Part 4: Explain Your Corrections for the

Calendar Year You’re Correcting ........... 25

Part 5: Sign Here ....................... 25

Worksheet 1. Adjusted Credit for Qualified Sick and

Family Leave Wages for Leave Taken After

March 31, 2020, and Before April 1, 2021 ...... 27

Worksheet 2. Adjusted Employee Retention Credit

for Qualified Wages Paid After March 12, 2020,

and Before January 1, 2021, for a 2020 Form

944, or Qualified Wages Paid After December

31, 2020, and Before July 1, 2021, for a 2021

Form 944 ............................. 28

Worksheet 3. Adjusted Credit for Qualified Sick and

Family Leave Wages for Leave Taken After

March 31, 2021, and Before October 1, 2021 ... 29

Worksheet 4. Adjusted Employee Retention Credit

for Qualified Wages Paid After June 30, 2021,

and Before January 1, 2022 ................ 30

Worksheet 5. Adjusted COBRA Premium

Assistance Credit ....................... 31

How Can You Get Forms, Instructions, and

Publications From the IRS? ................ 31

Future Developments

For the latest information about developments related to

Form 944-X and its instructions, such as legislation

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

Form944X.

Before you proceed with these instructions and

completing Form 944-X, you'll need a copy of the

Instructions for Form 944 because these

instructions don't repeat all of the information included in

the Instructions for Form 944. For example, these

TIP

instructions don't discuss who is eligible to claim the credit

for qualified sick and family leave wages, the employee

retention credit, or the COBRA premium assistance credit.

The current Instructions for Form 944 are available at

IRS.gov/Form944. If you need a prior revision of the

Instructions for Form 944, select the link for “All Revisions

for Form 944” under “Other Items You May Find Useful.”

What's New

Qualified small business payroll tax credit for in-

creasing research activities. For tax years beginning

before January 1, 2023, a qualified small business may

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

research activities as a payroll tax credit. The Inflation

Reduction Act of 2022 (the IRA) increases the election

amount to $500,000 for tax years beginning after

December 31, 2022. The payroll tax credit election must

be made on or before the due date of the originally filed

income tax return (including extensions). The portion of

the credit used against payroll taxes is allowed in the first

calendar quarter beginning after the date that the qualified

small business filed its income tax return. The election

and determination of the credit amount that will be used

against the employer's payroll taxes are made on Form

6765, Credit for Increasing Research Activities. The

amount from Form 6765, line 44, must then be reported

on Form 8974, Qualified Small Business Payroll Tax Credit

for Increasing Research Activities.

For quarters beginning before January 1, 2023, the

payroll tax credit can be used only against the employer

share of social security tax for the quarter and any

remaining credit is carried forward to the next quarter.

Starting in the first quarter of 2023, the payroll tax credit is

first used to reduce the employer share of social security

tax up to $250,000 per quarter and any remaining credit

reduces the employer share of Medicare tax for the

quarter. Any remaining credit, after reducing the employer

share of social security tax and the employer share of

Medicare tax, is then carried forward to the next quarter.

Form 8974 is used to determine the amount of the credit

that can be used in the current quarter. Corrections to this

credit are made on Form 944-X, line 15. If you make a

correction to Form 944-X, line 15, you must attach a

corrected Form 8974. For more information, see the

Instructions for Form 8974 and go to IRS.gov/

ResearchPayrollTC.

If you claimed the credit for qualified sick and

family leave wages for leave taken after March 31,

2020, and before April 1, 2021, and you make any

corrections on Form 944-X to amounts used to figure this

credit, you'll need to refigure the amount of this credit

using Worksheet 1. You'll also use this worksheet to figure

this credit if you’re claiming it for the first time on Form

944-X. If you claimed the credit for qualified sick and

family leave wages for leave taken after March 31, 2021,

CAUTION

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and before October 1, 2021, and you make any

corrections on Form 944-X to amounts used to figure this

credit, you'll need to refigure the amount of this credit

using Worksheet 3. You'll also use this worksheet to figure

this credit if you’re claiming it for the first time on Form

944-X. If you claimed the employee retention credit for

wages paid after March 12, 2020, and before July 1, 2021,

and you make any corrections on Form 944-X to amounts

used to figure this credit, you'll need to refigure the

amount of this credit using Worksheet 2. You'll also use

this worksheet to figure this credit if you’re claiming it for

the first time on Form 944-X. If you claimed the employee

retention credit for wages paid after June 30, 2021, and

before January 1, 2022, and you make any corrections on

Form 944-X to amounts used to figure this credit, you'll

need to refigure the amount of this credit using Worksheet

4. You'll also use this worksheet to figure this credit if

you’re claiming it for the first time on Form 944-X. If you

claimed the COBRA premium assistance credit and you

make any corrections on Form 944-X to amounts used to

figure this credit, you'll need to refigure the amount of this

credit using Worksheet 5. You'll also use this worksheet to

figure this credit if you’re claiming it for the first time on

Form 944-X.

Reminders

If a line on Form 944-X doesn't apply to you, leave

it blank. If you're correcting a year before 2020,

you must leave blank lines 9, 10, 16, 17a, 23, 24,

25, 26a, 28, 29, 30, 31, and 32. If you're correcting a year

before 2021, you must leave blank lines 17b, 17c, 17d,

26b, 26c, 33, 34, 35, 36, 37, 38, 39, and 40. If you’re

correcting a year after 2021, you must leave blank lines

17a, 26a, 30, 31, 39, and 40.

The COVID-19 related credit for qualified sick and

family leave wages is limited to leave taken after

March 31, 2020, and before October 1, 2021. The

credit for qualified sick and family leave wages, as

enacted under the Families First Coronavirus Response

Act (FFCRA) and amended and extended by the

COVID-related Tax Relief Act of 2020, is for leave taken

after March 31, 2020, and before April 1, 2021, and the

credit for qualified sick and family leave wages under

sections 3131, 3132, and 3133 of the Internal Revenue

Code, as enacted under the American Rescue Plan Act of

2021 (the ARP), is for leave taken after March 31, 2021,

and before October 1, 2021. For more information about

the credit for qualified sick and family leave wages, go to

IRS.gov/PLC.

Corrections to amounts reported on Form 944, lines

4a(i), 4a(ii), 8b, 10d, 15, and 16, for the credit for qualified

sick and family leave wages for leave taken after March

31, 2020, and before April 1, 2021, are reported on Form

944-X, lines 9, 10, 16, 25, 28, and 29, respectively.

Corrections to amounts reported on Form 944, lines 8d,

10f, 19, 20, 21, 22, 23, and 24, for the credit for qualified

sick and family leave wages for leave taken after March

31, 2021, and before October 1, 2021, are reported on

Form 944-X, lines 17b, 26b, 33, 34, 35, 36, 37, and 38,

respectively.

TIP

The COVID-19 related employee retention credit has

expired. The employee retention credit enacted under

the Coronavirus Aid, Relief, and Economic Security

(CARES) Act and amended and extended by the Taxpayer

Certainty and Disaster Tax Relief Act of 2020 was limited

to qualified wages paid after March 12, 2020, and before

July 1, 2021. The employee retention credit under section

3134 of the Internal Revenue Code, as enacted by the

ARP and amended by the Infrastructure Investment and

Jobs Act, was limited to qualified wages paid after June

30, 2021, and before October 1, 2021, unless the

employer was a recovery startup business. An employer

that was a recovery startup business could also claim the

employee retention credit for qualified wages paid after

September 30, 2021, and before January 1, 2022. For

more information about the employee retention credit,

including an eligibility checklist, frequently asked

questions, information on identifying employee retention

credit scam promotions, and directions on how to

withdraw a previously filed claim for the employee

retention credit, go to IRS.gov/ERC.

Corrections to amounts reported on Form 944, lines 8c,

10e, 17, and 18, for the employee retention credit are

reported on Form 944-X, lines 17a, 26a, 30, and 31,

respectively. However, how you figure the employee

retention credit for qualified wages paid after March 12,

2020, and before July 1, 2021, is different from how you

figure the credit for qualified wages paid after June 30,

2021, and before January 1, 2022. For corrections to

qualified wages paid after June 30, 2021, you may need to

complete line 39 to tell us if you're eligible for the

employee retention credit solely because your business is

a recovery startup business. For corrections to qualified

wages paid after September 30, 2021, you may need to

complete line 40 to tell us if you’re eligible for the

employee retention credit solely because your business is

a recovery startup business.

Credit for COBRA premium assistance payments is

limited to periods of coverage beginning on or after

April 1, 2021, through periods of coverage beginning

on or before September 30, 2021. Section 9501 of the

ARP provides for COBRA premium assistance in the form

of a full reduction in the premium otherwise payable by

certain individuals and their families who elect COBRA

continuation coverage due to a loss of coverage as the

result of a reduction in hours or an involuntary termination

of employment (assistance eligible individuals). This

COBRA premium assistance was available for periods of

coverage beginning on or after April 1, 2021, through

periods of coverage beginning on or before September

30, 2021. A premium payee was entitled to the COBRA

premium assistance credit at the time an eligible individual

elects coverage. Therefore, other than in rare

circumstances, due to the COBRA notice and election

period requirements (generally, employers have 60 days

to provide notice and assistance eligible individuals have

60 days to elect coverage), January 2022 was generally

the end of the period in which an assistance eligible

individual would have elected coverage. Under some rare

circumstances, it may be possible for a premium payee to

become entitled to the COBRA premium assistance credit

after January 2022. In these rare instances, the credit was

2Instructions for Form 944-X (Rev. 2-2024)