Part 2: Tell — Instruction 944 — Instructions for Form 944

13. Tax Liability If line 9 is less than $2,500, check the first box on line 13 and go to line 14.

If line 9 is $2,500 or more, check the second box on line 13. If you’re a monthly schedule depositor, enter your tax liability for each month and figure the total liability for the year. The amounts entered on line 13 are a summary of your monthly tax liabilities, not a summary of deposits you made. The IRS gets deposit data from EFTs. Enter your tax liabilities in the month that corresponds to the dates you paid wages to your employees, not the date payroll liabilities were accrued or deposits were made. If you don’t enter your tax liability for each month, the IRS won’t know when you should have made deposits and may assess an “averaged” failure-to-deposit penalty. See section 11 of Pub. 15. If your tax liability for any month is negative after accounting for your adjustments reported on line 6, don’t enter a negative amount for the month. Instead, enter zero for the month and subtract that negative amount from your tax liability for the next month.

Caution: The amount shown on line 13m must equal the amount shown on line 9. If it doesn’t, your tax deposits and payments may not be counted as timely. Don’t change your current-year tax liability reported on line 13 by adjustments reported on any Forms 944-X.

If you’re a semiweekly schedule depositor or if you became one because you accumulated $100,000 or more in tax liability on any day in a deposit period, you must complete Form 945-A and file it with Form 944. See $100,000 Next-Day Deposit Rule in section 11 of Pub. 15. Don’t complete lines 13a–13m if you file Form 945-A.

Adjusting tax liability for the qualified small business payroll tax credit for increasing research activities (line 8). Monthly schedule depositors and semiweekly schedule depositors must account for the qualified small business payroll tax credit for increasing research activities (line 8) when reporting their tax liabilities on line 13 or Form 945-A. The total tax liability for the year must equal the amount reported on line 9. Failure to account for the qualified small business payroll tax credit for increasing research activities on line 13 or Form 945-A may cause line 13 or Form 945-A to report more than the total tax liability reported on line 9. Don’t reduce your monthly tax liability reported on lines 13a–13l or your daily tax liability reported on Form 945-A below zero.

Beginning with the first quarter of 2023, the qualified small business payroll tax credit for increasing research activities is first used to reduce the employer share of social security tax (up to $250,000) for the quarter and any remaining credit is then used to reduce the employer share of Medicare tax for the quarter until it reaches zero. In completing line 13 or Form 945-A, you take into account the payroll tax credit against the liability for the employer share of social security tax starting with the first payroll payment of the quarter that includes payments of wages subject to social security tax to your employees until you

If any of the following apply, your direct deposit request will be rejected and a check will be sent instead.

The name on your account doesn’t match the name on the refund, and your financial institution won’t allow a refund to be deposited unless the name on the refund matches the name on the account.
Your business is a corporation and the receiving financial institution is a foreign bank or a foreign branch of a U.S. bank.
You haven’t given a valid account number.
Any numbers or letters on lines 12c–12e are crossed out or whited out.

Caution: The IRS isn’t responsible for a lost refund if you enter the wrong account information. Check with your financial institution to get the correct routing and account numbers and to make sure your direct deposit will be accepted.

Instructions for Form 944 (2025) 11

use up to $250,000 of credit against the employer share of social security tax and you then take into account any remaining payroll tax credit against the liability for the employer share of Medicare tax starting with the first payroll payment of the quarter that includes payments of wages subject to Medicare tax to employees. Consistent with the entries on line 13 or Form 945-A, the payroll tax credit should be taken into account in making deposits of employment tax. If any payroll tax credit is remaining at the end of the quarter that hasn’t been used completely because it exceeds $250,000 of the employer share of social security tax and the employer share of Medicare tax for the quarter, the excess credit may be carried forward to the succeeding quarter and allowed as a payroll tax credit for the succeeding quarter. The payroll tax credit may not be taken as a credit against income tax withholding, the employee share of social security tax, or the employee share of Medicare tax.

Also, the remaining payroll tax credit may not be carried back and taken as a credit against wages paid 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 calendar year because it is in excess of the applicable employer share of social security tax and employer share of Medicare tax on wages paid during the applicable quarters in the calendar year, the remaining payroll tax credit may be carried forward to the first quarter of the succeeding calendar year as a payroll tax credit against the applicable employer share of social security tax and employer share of Medicare tax on wages paid in that quarter.

Example. Rose Co. is an employer with a calendar tax year that filed its timely 2024 income tax return on April 15, 2025. Rose Co. elected to take the qualified small business payroll tax credit for increasing research activities on Form 6765. The third quarter of 2025 is the first quarter that begins after Rose Co. filed the income tax return making the payroll tax credit election. Therefore, the payroll tax credit applies against Rose Co.’s share of social security tax (up to $250,000) and Medicare tax on wages paid to employees in the third quarter of 2025. Rose Co. is a semiweekly schedule depositor. Rose Co. completes Form 945-A by reducing the amount of liability entered for the first payroll payment in the third quarter of 2025 that includes wages subject to social security tax by the lesser of (1) its share of social security tax (up to $250,000) on the wages, or (2) the available payroll tax credit. If the payroll tax credit elected is more than Rose Co.’s share of social security tax on the first payroll payment of the quarter, the excess payroll tax credit would be carried forward to succeeding payroll payments in the third quarter until it is used against up to $250,000 of Rose Co.’s share of social security tax for the quarter. If the amount of the payroll tax credit exceeds Rose Co.’s share of social security tax (up to $250,000) on wages paid to its employees in the third quarter, any remaining credit is used against Rose Co.’s share of Medicare tax on the first payroll payment of the quarter and then the excess payroll tax credit would be carried forward to succeeding payroll payments in the third quarter until it is used against Rose Co.’s share of Medicare tax for the quarter. If Rose Co. still has credit remaining after reducing its share of social security tax (up to $250,000) and Medicare tax for the

third quarter, the remainder would be treated as a payroll tax credit against its share of social security tax (up to $250,000) and Medicare tax on wages paid in the fourth quarter. If the amount of the payroll tax credit remaining exceeded Rose Co.’s share of social security tax (up to $250,000) and Medicare tax on wages paid in the fourth quarter, it could be carried forward and treated as a payroll tax credit for the first quarter of 2026.