As this was confusing to me, I summarized the purpose of Form 941 versus 944 versus Form 940.

In general, Form 941 is the Employer’s Quarterly Federal Tax Returns.  All employers are required to withhold federal taxes from their employee’s compensation, which includes, Federal Income tax, Social Security tax and Medicare tax.   Form 941 is used to report these taxes to the government on a quarterly basis.

Form 944: Employer's ANNUAL Federal Tax Return also is used to report payroll tax liability and payments. Form 944 is designed so the smallest employers (those whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less) will file and pay these taxes only once a year instead of every quarter.  However, before filing form 944, you must receive IRS authorization by written notice. You cannot file Form 944 without it (even if you don’t have taxes to report).

In contrast, Form 940 is an Annual form that needs to be filed by any business that has employees. This form reports the business’s federal unemployment taxes pursuant to the Federal Unemployment Tax Act (FUTA).  The business is responsible for the tax and does not come from employee wages.  This tax along with state unemployment programs pay for unemployment compensation to those workers who have lost their jobs.

Mixed in the response is a completely separate issue of pay versus file. The IRS considers depositing taxes and filing payroll tax returns (e.g., form 941) two completely separate processes. Payroll taxes are typically paid either monthly or semi-weekly, depending on the amount of employment taxes paid by the employer during the lookback period (i.e., the 12 months (covering four quarters) ending on June 30th of the prior year)). The IRS requires taxpayers to deposit all depository taxes electronically by electronic funds transfer, unless the taxpayer qualifies for a de minimis exception. The de minimis exception applies if Form 941, line 12 is less than $2,500 or line 12 was less than $2,500, and the taxpayer didn't incur a $100,000 next-day deposit obligation during the quarter.

Re form 940, even though filed once a year, an employer may have to make quarterly tax deposits. If the federal unemployment tax is more than $500 for the calendar year, at least one quarterly payment must be made. The deposit must be made by the last day of the month after the end of the calendar quarter when the amount exceeds $500.