Publication 15
taxmap/pubs/p15-013.htm#en_us_publink1000202428In general, you must deposit federal income tax withheld and
both the employer and employee social security and Medicare taxes. You must use
electronic funds transfer to make all federal tax deposits. See
How To Deposit on page 23 for information on electronic deposit requirements.
 | The credit against employment taxes for COBRA assistance
payments you take on line 12a of Form 941 or line 11a of Form 944 is treated as
a deposit of taxes on the first day of your return period. See
COBRA premium assistance credit on page 8 for more information. |
taxmap/pubs/p15-013.htm#en_us_publink1000202432You may make a payment with Form 941 or Form 944 instead of depositing,
without incurring a penalty, if one of the following applies.
- Your Form 941 total tax liability for either the current quarter
or the preceding quarter is less than $2,500, and you did not incur a $100,000
next-day deposit obligation during the current quarter. If you are not sure your
total tax liability for the current quarter will be less than $2,500, (and your
liability for the preceding quarter was not less than $2,500), make deposits
using the semi-weekly or monthly rules so you won't be subject to failure to
deposit penalties.
- You are a monthly schedule depositor (defined below) and make
a payment in accordance with the
Accuracy of Deposits Rule discussed on page 23. This payment may be $2,500 or more.
Employers who have been notified to file Form 944 can pay their
fourth quarter tax liability with Form 944 if the fourth quarter tax liability
is less than $2,500. Employers must have deposited any tax liability due for the
first, second, and third quarters according to the deposit rules to avoid
failure-to-deposit penalties for deposits during those quarters.
Separate deposits are required for nonpayroll and payroll income
tax withholding. Do not combine deposits for Forms 941 (or Form 944) and 945 tax
liabilities. Generally, the deposit rules for nonpayroll liabilities are the
same as discussed below, except the rules apply to an annual rather than a
quarterly return period. Thus, the $2,500 threshold for the deposit requirement
discussed earlier applies to Form 945 on an annual basis. See the separate
Instructions for Form 945 for more information.
taxmap/pubs/p15-013.htm#en_us_publink1000202435There are two deposit schedules—monthly and semiweekly—for
determining when you deposit social security, Medicare, and withheld income
taxes. These schedules tell you when a deposit is due after a tax liability
arises (for example, when you have a payday). Before the beginning of each
calendar year, you must determine which of the two deposit schedules you are
required to use. The deposit schedule you must use is based on the total tax
liability you reported on Form 941 during a lookback period discussed on page
21. Your deposit schedule is not determined by how often you pay your employees
or make deposits. See special rules for Forms 944 and 945, later. See
Application of Monthly and Semiweekly Schedules on page 22.
 | These rules do not apply to federal unemployment (FUTA) tax.
See
section 14 for information on depositing FUTA tax.
|
taxmap/pubs/p15-013.htm#en_us_publink1000202439If you are a Form 941 filer, your deposit schedule for a calendar
year is determined from the total taxes reported on line 8 of your Forms 941 in
a 4-quarter lookback period. The lookback period begins July 1 and ends June 30
as shown in Table 1 on page 21. If you reported $50,000 or less of taxes for the
lookback period, you are a monthly schedule depositor; if you reported more than
$50,000, you are a semiweekly schedule depositor.
Table 1. Lookback Period for Calendar Year 2011
| | | Lookback Period | | | | |
| | 2009 2010 | | 2011 | |
| | July 1 | Oct. 1 | Jan. 1 | Apr.1 | | Calendar Year | |
| | | | | | | | |
| | Sep. 30 | Dec. 31 | Mar. 31 | June 30 | | Jan.–Dec. | |
| | | | | | | | |
| | | | | | | | |
| The lookback period for a 2011 Form 941 filer who filed Form
944 in either 2009 or 2010 is calendar year 2009. |
If you are a Form 944 filer for the current year or either of
the preceding 2 years, your deposit schedule for a calendar year is determined
from the total taxes reported during the second preceding calendar year (either
on line 8 of your Form 941 for all 4 quarters of that year or line 7 of your
Form 944 for that year). The lookback period for 2011 for a Form 944 filer is
calendar year 2009. If you reported $50,000 or less of taxes for the lookback
period, you are a monthly schedule depositor; if you reported more than $50,000,
you are a semiweekly schedule depositor.
If you are a Form 945 filer, your deposit schedule for a calendar
year is determined from the total taxes reported on line 4 of your Form 945 for
the second preceding calendar year. The lookback period for 2011 for a Form 945
filer is calendar year 2009.
taxmap/pubs/p15-013.htm#en_us_publink1000202442Adjustments made on Forms 941-X and Form 944-X do not affect
the amount of tax liability for previous periods for purposes of the lookback
rule.
taxmap/pubs/p15-013.htm#en_us_publink1000202443An employer originally reported a tax liability of $45,000 for
the lookback period. The employer discovered, during January 2011, that the tax
reported for one of the lookback period quarters was understated by $10,000 and
corrected this error by filing Form 941-X. This employer is a monthly schedule
depositor for 2011 because the lookback period tax liabilities are based on the
amounts originally reported, and they were $50,000 or less.
taxmap/pubs/p15-013.htm#en_us_publink1000202444The term deposit period refers to the period during which tax
liabilities are accumulated for each required deposit due date. For monthly
schedule depositors, the deposit period is a calendar month. The deposit periods
for semiweekly schedule depositors are Wednesday through Friday and Saturday
through Tuesday.
taxmap/pubs/p15-013.htm#en_us_publink1000202445You are a monthly schedule depositor for a calendar year if the
total taxes on line 8 of Form 941 for the 4 quarters in your lookback period
were $50,000 or less.
Under the monthly deposit schedule, deposit employment taxes
on payments made during a month by the 15th day of the following month. See also
Deposits on Business Days Only on page 22 and the
$100,000 Next-Day Deposit Rule on page 22.
Monthly schedule depositors should not file Form 941 or Form
944 on a monthly basis. Also, do not file Form 941-M, Employer's Monthly Federal
Tax Return, unless you are instructed to do so by an IRS representative.
taxmap/pubs/p15-013.htm#en_us_publink1000202447Your tax liability for any quarter in the lookback period before
you started or acquired your business is considered to be zero. Therefore, you
are a monthly schedule depositor for the first calendar year of your business.
However, see the
$100,000 Next-Day Deposit Rule on page 22.
You are a semiweekly schedule depositor for a calendar year if
the total taxes on line 8 of Form 941 during your lookback period were more than
$50,000. Under the semiweekly deposit schedule, deposit employment taxes for
payments made on Wednesday, Thursday, and/or Friday by the following Wednesday.
Deposit taxes for payments made on Saturday, Sunday, Monday, and/or Tuesday by
the following Friday. See also
Deposits on Business Days Only on page 22.
Note.
Semiweekly schedule depositors must complete Schedule B (Form 941), Report of
Tax Liability for Semiweekly Schedule Depositors, and submit it with Form 941.
If you file Form 944 and are a semiweekly schedule depositor, complete Form
945-A, Annual Record of Federal Tax Liability, and submit it with your return
(instead of Schedule B).
Table 2.
Semiweekly Deposit Schedule
IF the payday falls
on a . . .
| THEN deposit taxes by
the following . . .
|
Wednesday, Thursday,
and/or Friday
| Wednesday |
Saturday, Sunday,
Monday, and/or Tuesday
| Friday |
taxmap/pubs/p15-013.htm#en_us_publink1000202453If you have more than one pay date during a semiweekly period
and the pay dates fall in different calendar quarters, you will need to make
separate deposits for the separate liabilities.
taxmap/pubs/p15-013.htm#en_us_publink1000202454If you have a pay date on Wednesday, March 30, 2011 (first quarter),
and another pay date on Friday, April 1, 2011 (second quarter), two separate
deposits would be required even though the pay dates fall within the same
semiweekly period. Both deposits would be due Wednesday, April 6, 2011 (3
business days from the end of the semiweekly deposit period).
Summary of Steps to Determine
Your Deposit Schedule
|
| | 1. | Identify your lookback period (see
Lookback period earlier).
| |
| | 2. | Add the total taxes from line 8, Form 941 you reported during
the lookback period. | |
| | 3. | Determine if you are a monthly or semiweekly schedule depositor: | |
| | | If the total taxes you reported in the lookback period were | Then you are a | |
| | | $50,000 or less | Monthly Schedule Depositor | |
| | | More than $50,000 | Semiweekly Schedule Depositor | |
| |
taxmap/pubs/p15-013.htm#en_us_publink1000202457Rose Co. reported Form 941 taxes as follows:
| 2010 Lookback Period | 2011 Lookback Period |
|---|
| 3rd Quarter 2008 | $12,000 | 3rd Quarter
2009
| $12,000 |
| 4th Quarter 2008 | 12,000 | 4th Quarter
2009
| 12,000 |
| 1st Quarter 2009 | 12,000 | 1st Quarter
2010
| 12,000 |
| 2nd Quarter 2009 | 12,000 | 2nd Quarter
2010
| 15,000 |
| | $48,000 | | $51,000 |
Rose Co. is a monthly schedule depositor for 2010 because its
tax liability for the 4 quarters in its lookback period (third quarter 2008
through second quarter 2009) was not more than $50,000. However, for 2011, Rose
Co. is a semiweekly schedule depositor because the total taxes exceeded $50,000
for the 4 quarters in its lookback period (third quarter 2009 through second
quarter 2010).
taxmap/pubs/p15-013.htm#en_us_publink1000202459If a deposit is required to be made on a day that is not a business
day, the deposit is considered timely if it is made by the close of the next
business day. A business day is any day other than a Saturday, Sunday, or legal
holiday. For example, if a deposit is required to be made on a Friday and Friday
is a legal holiday, the deposit will be considered timely if it is made by the
following Monday (if that Monday is a business day).
Semiweekly schedule depositors
have at least 3 business days to make a deposit. If any of the 3 weekdays after
the end of a semiweekly period is a legal holiday, you will have an additional
day for each day that is a legal holiday to make the required deposit. For
example, if a semiweekly schedule depositor accumulated taxes for payments made
on Friday and the following Monday is a legal holiday, the deposit normally due
on Wednesday may be made on Thursday (this allows 3 business days to make the
deposit).
taxmap/pubs/p15-013.htm#en_us_publink1000254849The term "legal holiday" means any legal holiday in the District
of Columbia. Legal holidays for 2011 are listed below.
- January 17— Birthday of Martin Luther King, Jr.
- February 21— Washington's Birthday
- April 15— District of Columbia Emancipation Day
- May 30— Memorial Day
- July 4— Independence Day
- September 5— Labor Day
- October 10— Columbus Day
- November 11— Veterans' Day
- November 24— Thanksgiving Day
- December 26— Christmas Day (observed)
Notice 2010-87 provides that the IRS will not assert penalties
for deposits due during calendar year 2011 that are untimely solely because the
depositor relied on a statewide legal holiday rather than a legal holiday in the
District of Columbia.
taxmap/pubs/p15-013.htm#en_us_publink1000202460The terms "monthly schedule depositor" and "semiweekly schedule
depositor" do not refer to how often your business pays its employees or even
how often you are required to make deposits. The terms identify which set of
deposit rules you must follow when an employment tax liability arises. The
deposit rules are based on the dates when wages are paid (for example, cash
basis); not on when tax liabilities are accrued for accounting purposes.
taxmap/pubs/p15-013.htm#en_us_publink1000202461Spruce Co. is a monthly schedule depositor with seasonal employees.
It paid wages each Friday during March but did not pay any wages during April.
Under the monthly deposit schedule, Spruce Co. must deposit the combined tax
liabilities for the four March paydays by April 15. Spruce Co. does not have a
deposit requirement for April (due by May 15) because no wages were paid and,
therefore, it did not have a tax liability for April.
taxmap/pubs/p15-013.htm#en_us_publink1000202462Green, Inc. is a semiweekly schedule depositor and pays wages
once each month on the last Friday of the month. Although Green, Inc., has a
semiweekly deposit schedule, it will deposit just once a month because it pays
wages only once a month. The deposit, however, will be made under the semiweekly
deposit schedule as follows: Green, Inc.'s tax liability for the April 29, 2011
(Friday), payday must be deposited by May 4, 2011 (Wednesday). Under the
semiweekly deposit schedule, liabilities for wages paid on Wednesday through
Friday must be deposited by the following Wednesday.
taxmap/pubs/p15-013.htm#en_us_publink1000202463If you accumulate $100,000 or more in taxes on any day during
a monthly or semiweekly deposit period (see
Deposit period
on page 21), you must deposit the tax by the next business day, whether you are
a monthly or semiweekly schedule depositor.
For purposes of the $100,000 rule, do not continue accumulating
a tax liability after the end of a deposit period. For example, if a semiweekly
schedule depositor has accumulated a liability of $95,000 on a Tuesday (of a
Saturday-through-Tuesday deposit period) and accumulated a $10,000 liability on
Wednesday, the $100,000 next-day deposit rule does not apply. Thus, $95,000 must
be deposited by Friday and $10,000 must be deposited by the following Wednesday.
However, once you accumulate at least $100,000 in a deposit period,
stop accumulating at the end of that day and begin to accumulate anew on the
next day. For example, Fir Co. is a semiweekly schedule depositor. On Monday,
Fir Co. accumulates taxes of $110,000 and must deposit this amount on Tuesday,
the next business day. On Tuesday, Fir Co. accumulates additional taxes of
$30,000. Because the $30,000 is not added to the previous $110,000 and is less
than $100,000, Fir Co. must deposit the $30,000 by Friday (following the
semiweekly deposit schedule).
| If you are a monthly schedule depositor and accumulate a
$100,000 tax liability on any day, you become a semiweekly schedule depositor on
the next day and remain so for at least the rest of the calendar year and for
the following calendar year. |
taxmap/pubs/p15-013.htm#en_us_publink1000202465Elm, Inc., started its business on April 4, 2011. On April 8,
it paid wages for the first time and accumulated a tax liability of $40,000. On
Friday, April 15, 2011, Elm, Inc., paid wages and accumulated a liability of
$60,000, bringing its total accumulated tax liability to $100,000. Because this
was the first year of its business, the tax liability for its lookback period is
considered to be zero, and it would be a monthly schedule depositor based on the
lookback rules. However, since Elm, Inc., accumulated a $100,000 liability on
April 15, it became a semiweekly schedule depositor on April 16. It will be a
semiweekly schedule depositor for the remainder of 2011 and for 2012. Elm, Inc.,
is required to deposit the $100,000 by Monday, April 18, the next business day.
taxmap/pubs/p15-013.htm#en_us_publink1000202466You are required to deposit 100% of your tax liability on or
before the deposit due date. However, penalties will not be applied for
depositing less than 100% if both of the following conditions are met.
- Any deposit shortfall does not exceed the greater of $100
or 2% of the amount of taxes otherwise required to be deposited.
- The deposit shortfall is paid or deposited by the shortfall
makeup date as described below.
- Monthly schedule depositor.
Deposit the shortfall or pay it with your return by the due
date of your return for the return period in which the shortfall occurred. You
may pay the shortfall with your return even if the amount is $2,500 or more.
- Semiweekly schedule depositor.
Deposit by the earlier of:
- The first Wednesday or Friday (whichever comes first) that
falls on or after the 15th of the month following the month in which the
shortfall occurred, or
- The due date of your return (for the return period of the
tax liability).
For example, if a semiweekly schedule depositor has a deposit
shortfall during July 2011, the shortfall makeup date is August 17, 2011
(Wednesday). However, if the shortfall occurred on the required April 1 (Friday)
deposit due date for a March 28 (Monday) pay date, the return due date for the
March 28 pay date (May 2) would come before the May 18 (Wednesday) shortfall
makeup date. In this case, the shortfall must be deposited by May 2, 2011.
taxmap/pubs/p15-013.htm#en_us_publink1000202468You must deposit employment taxes, including Form 945 taxes,
by electronic funds transfer. See
Payment with return
on page 20 for exceptions explaining when taxes may be paid with the tax return
instead of being deposited.
You must use electronic funds transfer to make all federal tax
deposits (such as deposits of employment tax, excise tax, and corporate income
tax). Generally, electronic fund transfers are made using the Electronic Federal
Tax Payment System (EFTPS). If you do not want to use EFTPS, you can arrange for
your tax professional, financial institution, payroll service, or other trusted
third party to make deposits on your behalf.
If you fail to make a timely deposit, you may be subject to a
10% failure-to-deposit penalty. EFTPS is a free service provided by the
Department of Treasury. To get more information or to enroll in EFTPS, call
1-800-555-4477. You can also visit the EFTPS website at
www.eftps.gov.
If you are a new employer that indicated a federal tax obligation
when requesting an EIN, you will be pre-enrolled in EFTPS. You will receive
information in your Employer Identification Number (EIN) Package about Express
Enrollment and an additional mailing containing your EFTPS personal
identification number (PIN) and instructions for activating your PIN. Call the
toll-free number located in your "How to Activate Your Enrollment" brochure to
activate your enrollment and begin making your payroll tax deposits. Be sure to
tell your payroll provider about your EFTPS enrollment.
taxmap/pubs/p15-013.htm#en_us_publink1000254638For your records, an Electronic Funds Transfer (EFT) Trace Number
will be provided with each successful payment. The number can be used as a
receipt or to trace the payment.
taxmap/pubs/p15-013.htm#en_us_publink1000202472For deposits made by EFTPS to be on time, you must initiate the
deposit by 8 p.m. Eastern time the day before the date the deposit is due. If
you use a third party to make a deposit on your behalf, they may have different
cutoff times.
taxmap/pubs/p15-013.htm#en_us_publink1000254851If you fail to initiate a deposit transaction on EFTPS by 8 p.m.
Eastern time the day before the date a deposit is due, you can still make your
deposit on time by using the Federal Tax Application (FTA). If you ever need the
same-day payment method, you will need to make arrangements with your financial
institution ahead of time. Please check with your financial institution
regarding availability, deadlines, and costs. Your financial institution may
charge you a fee for payments made this way. To learn more about the information
you will need to provide to your financial institution to make a same-day wire
payment, visit
www.eftps.gov to download the
Same-Day Payment Worksheet.
If you deposited more than the right amount of taxes for a quarter,
you can choose on Form 941 for that quarter (or on Form 944 for that year) to
have the overpayment refunded or applied as a credit to your next return. Do not
ask EFTPS to request a refund from the IRS for you.
taxmap/pubs/p15-013.htm#en_us_publink1000202484 | Although the deposit penalties information provided below
refers specifically to Form 941, these rules also apply to Form 945 and Form 944
(if the employer required to file Form 944 does not qualify for the exception to
the deposit requirements discussed under
Payment with return on page 20). |
Penalties may apply if you do not make required deposits on time
or if you make deposits for less than the required amount. The penalties do not
apply if any failure to make a proper and timely deposit was due to reasonable
cause and not to willful neglect. The IRS may also waive penalties if you
inadvertently fail to deposit in the first quarter you were required to deposit
any employment tax, or in the first quarter during which your frequency of
deposits changed, if you timely filed your employment tax return.
For amounts not properly or timely deposited, the penalty rates
are as follows.
| 2%
| - | Deposits made 1 to 5 days late. |
| 5%
| - | Deposits made 6 to 15 days late. |
| 10%
| - | Deposits made 16 or more days late. Also applies to amounts
paid within 10 days of the date of the first notice the IRS sent asking for the
tax due.
|
| 10%
| - | Deposits paid directly to the IRS, or paid with your tax
return. But see
Payment with return on page 20 for an exception.
|
| 15%
| - | Amounts still unpaid more than 10 days after the date of
the first notice the IRS sent asking for the tax due or the day on which you
received notice and demand for immediate payment, whichever is earlier.
|
Late deposit penalty amounts are determined using calendar days, starting from
the due date of the liability.
taxmap/pubs/p15-013.htm#en_us_publink1000202490
If you filed Form 944 for the prior year and file Forms 941 for the current
year, the failure-to-deposit penalty will not apply to a late deposit of
employment taxes for January of the current year if the taxes are deposited in
full by March 15 of the current year.
taxmap/pubs/p15-013.htm#en_us_publink1000202491Deposits generally are applied to the most recent tax liability
within the quarter. If you receive a failure-to-deposit penalty notice, you may
designate how your deposits are to be applied in order to minimize the amount of
the penalty if you do so within 90 days of the date of the notice. Follow the
instructions on the penalty notice you received. For more information on
designating deposits, see Revenue Procedure 2001-58. You can find Revenue
Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at
www.irs.gov/pub/irs-irbs/irb01-50.pdf.
Cedar, Inc. is required to make a deposit of $1,000 on June 15
and $1,500 on July 15. It does not make the deposit on June 15. On July 15,
Cedar, Inc. deposits $2,000. Under the deposits rule, which applies deposits to
the most recent tax liability, $1,500 of the deposit is applied to the July 15
deposit and the remaining $500 is applied to the June deposit. Accordingly, $500
of the June 15 liability remains undeposited. The penalty on this underdeposit
will apply as explained on page 23.
taxmap/pubs/p15-013.htm#en_us_publink1000202493If federal income, social security, and Medicare taxes that must
be withheld are not withheld or are not deposited or paid to the United States
Treasury, the trust fund recovery penalty may apply. The penalty is the full
amount of the unpaid trust fund tax. This penalty may apply to you if these
unpaid taxes cannot be immediately collected from the employer or business.
The trust fund recovery penalty may be imposed on all persons
who are determined by the IRS to be responsible for collecting, accounting for,
and paying over these taxes, and who acted willfully in not doing so.
A
responsible person
can be an officer or employee of a corporation, a partner or employee of a
partnership, an accountant, a volunteer director/trustee, or an employee of a
sole proprietorship. A responsible person also may include one who signs checks
for the business or otherwise has authority to cause the spending of business
funds.
Willfully
means voluntarily, consciously, and intentionally. A responsible person acts
willfully if the person knows the required actions are not taking place.
taxmap/pubs/p15-013.htm#en_us_publink1000202494Separate accounting may be required if you do not pay over withheld
employee social security, Medicare, or income taxes; deposit required taxes;
make required payments; or file tax returns. In this case, you would receive
written notice from the IRS requiring you to deposit taxes into a special trust
account for the U.S. Government. You would also have to file monthly tax returns
on Form 941-M, Employer's Monthly Federal Tax Return.
| You may be charged with criminal penalties if you do not
comply with the special bank deposit requirements for the special trust account
for the U.S. Government. |
taxmap/pubs/p15-013.htm#en_us_publink1000202496IRS may assess an "averaged" failure-to-deposit (FTD) penalty
of 2% to 10% if you are a monthly schedule depositor and did not properly
complete line 17 of Form 941 when your tax liability (line 10) shown on Form 941
equaled or exceeded $2,500.
The IRS may also assess an "averaged" FTD penalty of 2% to 10%
if you are a semiweekly schedule depositor and your tax liability (line 10)
shown on Form 941 equaled or exceeded $2,500 and you:
- Completed line 17 of Form 941 instead of Schedule B (Form
941),
- Failed to attach a properly completed Schedule B (Form 941),
or
- Improperly completed Schedule B (Form 941) by, for example,
entering tax deposits instead of tax liabilities in the numbered spaces.
The FTD penalty is figured by distributing your total tax liability
shown on line 10 of Form 941 equally throughout the tax period. As a result,
your deposits and payments may not be counted as timely because the actual dates
of your tax liabilities cannot be accurately determined.
You can avoid an "averaged" FTD penalty by reviewing your return
before you file it. Follow these steps before submitting your Form 941.
- If you are a monthly schedule depositor, report your tax liabilities
(not your deposits) in the monthly entry spaces on line 17 of Form 941.
- If you are a semiweekly schedule depositor, report your tax
liabilities (not your deposits) on Schedule B (Form 941) in the lines that
represent the dates your employees were paid.
- Verify your total liability shown on line 17 of Form 941 or
the bottom of Schedule B (Form 941) equals your tax liability shown on line 10
of Form 941.
- Do not show negative amounts on line 17 of Form 941 or Schedule
B (Form 941).
- For prior period errors
do not
adjust your tax liabilities reported on line 17 of Form 941 or on Schedule B
(Form 941). Instead, file an adjusted return (Form 941-X, 944-X, or 945-X) if
you are also adjusting your tax liability. If you are only adjusting your
deposits in response to a failure-to-deposit penalty notice, see the
Instructions for Schedule B (Form 941) or the Form 945-X instructions (for Forms
944 and 945).
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