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IRS.gov Website
Publication 51
taxmap/pubs/p51-006.htm#en_us_publink1000195574

7. Depositing Taxes(p14)

rule
Generally, you must deposit both the employer and employee shares of social security and Medicare taxes and federal income tax withheld. You must use electronic funds transfer to make all federal tax deposits. See How To Deposit on page 16.
Deposit
The credit against employment taxes for COBRA premium assistance payments you take on the 2010 Form 943 is treated as a deposit of taxes on the first day of your return period. See COBRA premium assistance credit on page 5 for more information.
taxmap/pubs/p51-006.htm#en_us_publink1000195578

Payment with return.(p14)

rule
You may make payments with Forms 943 or 945 instead of depositing if one of the following applies.
EIC
Only monthly schedule depositors, defined later, are allowed to make an Accuracy of Deposits Rule payment with the return. Semiweekly schedule depositors must timely deposit the amount. See Accuracy of Deposits Rule and How To Deposit, later in this section.
taxmap/pubs/p51-006.htm#en_us_publink1000195583

When To Deposit(p14)

rule
EIC
If you employ both farm and nonfarm workers, do not combine the taxes reportable on Forms 941 or 944 with Form 943 to decide whether to make a deposit. See Employers of Both Farm and Nonfarm Workers on page 18.
The rules for determining when to deposit Form 943 taxes are discussed below. See section 10 for the separate rules that apply to FUTA tax. Under these rules, you are classified as either a monthly schedule depositor or a semiweekly schedule depositor.
The terms "monthly schedule depositor" and "semiweekly schedule depositor" do not refer to how often your business pays its employees or how often you are required to make deposits. The terms identify which set of rules you must follow when you incur a tax liability (for example, when you have a payday).
The deposit schedule that you must use for a calendar year is determined from the total taxes reported on your Form 943 (line 9) for the lookback period, discussed next.
taxmap/pubs/p51-006.htm#en_us_publink1000195587

Lookback period.(p14)

rule
The lookback period is the second calendar year preceding the current calendar year. For example, the lookback period for 2011 is 2009.
taxmap/pubs/p51-006.htm#en_us_publink1000195588

Example of deposit schedule based on lookback period.(p14)

Rose Co. reported taxes on Form 943 as follows.
Rose Co. is a monthly schedule depositor for 2011 because its taxes for the lookback period ($48,000 for calendar year 2009) were not more than $50,000. However, for 2012, Rose Co. is a semiweekly schedule depositor because the total taxes for its lookback period ($60,000 for calendar year 2010) exceeded $50,000.
taxmap/pubs/p51-006.htm#en_us_publink1000195589
Adjustments to lookback period taxes.(p14)
To determine your taxes for the lookback period, use only the tax that you reported on the original return (Form 943, line 9). Do not include adjustments shown on Form 943-X, Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund.
taxmap/pubs/p51-006.htm#en_us_publink1000195590

Example of adjustments.(p14)

An employer originally reported total tax of $45,000 for the lookback period in 2009. The employer discovered during March 2011 that the tax reported for the lookback period was understated by $10,000 and corrected this error by filing Form 943-X. The total tax reported in the lookback period is still $45,000. The $10,000 adjustment is also not treated as part of the 2011 taxes.
taxmap/pubs/p51-006.htm#en_us_publink1000195591

Deposit period.(p14)

rule
The 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/p51-006.htm#en_us_publink1000195592

Monthly Deposit Schedule(p14)

rule
If the total tax reported on line 9 of Form 943 for the lookback period is $50,000 or less, you are a monthly schedule depositor for the current year. You must deposit Form 943 taxes on payments made during a calendar month by the 15th day of the following month.
taxmap/pubs/p51-006.htm#en_us_publink1000195593

Monthly schedule example.(p14)

rule
Red Co. is a seasonal employer and a monthly schedule depositor. It pays wages each Friday. It paid wages during August 2011, but did not pay any wages during September. Red Co. must deposit the combined tax liabilities for the August paydays by September 15. Red Co. does not have a deposit requirement for September (that is, due by October 17, 2011) because no wages were paid in September; therefore, it did not have a tax liability for September.
taxmap/pubs/p51-006.htm#en_us_publink1000195594

New employers.(p15)

rule
For agricultural employers, your tax liability for any year in the lookback period before the date you started or acquired your business is considered to be zero. Therefore, you are a monthly schedule depositor for the first and second calendar years of your agricultural business (but see the $100,000 Next-Day Deposit Rule, later).
taxmap/pubs/p51-006.htm#en_us_publink1000195596

Semiweekly Deposit Schedule(p15)

rule
You are a semiweekly schedule depositor for a calendar year if the total taxes on line 9 of Form 943 during your lookback period were more than $50,000. Under the semiweekly deposit schedule, deposit Form 943 taxes for payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. Deposit amounts accumulated for payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday.
Semiweekly depositors are not required to deposit twice a week if their payments were in the same semiweekly period unless the $100,000 Next-Day Deposit Rule (discussed later) applies. For example, if you made a payment on both Wednesday and Friday and incurred taxes of $10,000 for each pay date, deposit the $20,000 by the following Wednesday. If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday.
EIC
Semiweekly schedule depositors must complete Form 943-A and submit it with Form 943.

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/p51-006.htm#en_us_publink1000195600

Semiweekly schedule example.(p15)

rule
Green, Inc., is a semiweekly schedule depositor and pays wages once each month on the last Friday of the month. Green, Inc., will deposit only once a month, but the deposit will be made under the semiweekly deposit schedule as follows. Green, Inc.'s tax liability for the April 29, 2011 (Friday), wage payment must be deposited by May 4, 2011 (Wednesday).
taxmap/pubs/p51-006.htm#en_us_publink1000195601

Semiweekly deposit period spanning two quarters.(p15)

rule
If 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. For example, if 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 will be required even though the pay dates fall within the same semiweekly period. Both deposits will be due Friday, April 6, 2011 (3 business days from the end of the semiweekly deposit period).
taxmap/pubs/p51-006.htm#en_us_publink1000195602

Deposits on Business Days Only(p15)

rule
If a deposit is required to be made on a day that is not a business day, the deposit is considered on time if it is made by 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 Friday and Friday is a legal holiday, the deposit is considered timely if it is made by the following Monday (if Monday is a business day).
taxmap/pubs/p51-006.htm#en_us_publink1000195603
Semiweekly schedule depositors(p15)
will always have 3 business days to make a deposit. That is, 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 deposit. For example, if a semiweekly schedule depositor accumulated taxes 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/p51-006.htm#en_us_publink1000255148

Legal holiday.(p15)

rule
The term "legal holiday" means any legal holiday in the District of Columbia. Legal holidays for 2011 are listed below.
taxmap/pubs/p51-006.htm#en_us_publink1000255149
Special rule for 2011.(p15)
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/p51-006.htm#en_us_publink1000195604

$100,000 Next-Day Deposit Rule(p15)

rule
If you accumulate $100,000 or more of Form 943 taxes (that is, taxes reported on line 11(line 9 on the 2011 Form 943)) on any day during a deposit period, you must deposit the tax by the close of the next business day, whether you are a monthly or a 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 because the $10,000 is accumulated in the next deposit period. 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. does not have to deposit the $30,000 until Friday (following the semiweekly deposit schedule).
EIC
If you are a monthly schedule depositor and you accumulate a $100,000 tax liability on any day, you become a semiweekly schedule depositor on the next day and remain so for the remainder of the calendar year and for the following calendar year.
taxmap/pubs/p51-006.htm#en_us_publink1000195606

Example of the $100,000 next-day deposit rule.(p16)

rule
Elm, Inc., started its business on April 1, 2011. Because Elm, Inc., is a new employer, the taxes for its lookback period are considered to be zero; therefore, Elm, Inc., is a monthly schedule depositor. On April 8, Elm, Inc., paid wages for the first time and accumulated taxes of $50,000. On 
April 15 (Friday), Elm, Inc., paid wages and accumulated taxes of $60,000, for a total of $110,000. Because Elm, Inc., accumulated $110,000 on April 15, it must deposit $110,000 by April 18 (Monday), the next business day.
taxmap/pubs/p51-006.htm#en_us_publink1000195607

Accuracy of Deposits Rule(p16)

rule
You 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.
  1. Any deposit shortfall does not exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited.
  2. The deposit shortfall is paid or deposited by the shortfall makeup date as described below.
taxmap/pubs/p51-006.htm#en_us_publink1000195608

Makeup Date for Deposit Shortfall:(p16)

rule
taxmap/pubs/p51-006.htm#en_us_publink1000195609

How To Deposit(p16)

rule
You must deposit employment taxes by electronic funds transfer. See Payment with return on page 14 for exceptions explaining when taxes may be paid with the tax return instead of being deposited.
taxmap/pubs/p51-006.htm#en_us_publink1000195611

Electronic deposit requirement.(p16)

rule
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 funds 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. To get more information or to enroll in EFTPS, call 1-800-555-4477 (business) or 1-800-316-6541 (individual). You can also visit the EFTPS website at www.eftps.gov. You can also get Pub. 966, The Secure Way to Pay Your Federal Taxes.
New employers that have a federal tax obligation will be pre-enrolled in EFTPS. Call the toll-free number located in your Employer Identification Number (EIN) Package to activate your enrollment and begin making your tax deposit payments. See When you receive your EIN on page 6 for more information.
taxmap/pubs/p51-006.htm#en_us_publink1000195614
Deposit record.(p16)
For 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/p51-006.htm#en_us_publink1000195613
Depositing on time.(p16)
For deposits made by EFTPS to be on time, you must initiate the deposit by 8 p.m. Eastern time the day before the date a deposit is due. If you use a third party to make a deposit on your behalf, they may have different cutoff times.
taxmap/pubs/p51-006.htm#en_us_publink1000238944
Same-day payment option.(p16)
If 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.
taxmap/pubs/p51-006.htm#en_us_publink1000195623

Deposit Penalties(p17)

rule
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. IRS may also waive deposit penalties if you inadvertently fail to deposit in the first quarter that a deposit is due, or the first quarter during which your frequency of deposits changed, if you timely filed your employment tax return.
For amounts not properly deposited or not deposited on time, the penalty rates are shown next.
PenaltyCharged for...
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. See Payment with return on page 14 for exceptions.
15% Amounts still unpaid more than 10 days after the date of the first notice that 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/p51-006.htm#en_us_publink1000195627

Order in which deposits are applied.(p17)

rule
Deposits generally are applied to the most recent tax liability within the year. 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 that you received. For examples on how the IRS will apply deposits and 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.
taxmap/pubs/p51-006.htm#en_us_publink1000195628

Example.(p17)

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 above.
taxmap/pubs/p51-006.htm#en_us_publink1000195629

Trust fund recovery penalty.(p17)

rule
If 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 that the required actions are not taking place.
taxmap/pubs/p51-006.htm#en_us_publink1000195630

"Averaged" failure-to-deposit penalty.(p17)

rule
IRS may assess an "averaged" failure-to-deposit penalty of 2% to 10% if you are a monthly schedule depositor and did not properly complete line 17 of Form 943 when your tax liability (line 11) shown on Form 943 was $2,500 or more. IRS may also assess this penalty of 2% to 10% if you are a semiweekly schedule depositor and your tax liability (line 11) shown on Form 943 was $2,500 or more and you did any of the following.
IRS figures the penalty by allocating your total tax liability on line 11 of Form 943 equally throughout the tax period. Your deposits and payments may not be counted as timely because IRS does not know the actual dates of your tax liabilities.
You can avoid the penalty by reviewing your return before filing it. Follow these steps before filing your 
Form 943.
taxmap/pubs/p51-006.htm#en_us_publink1000195631

Employers of Both Farm and Nonfarm Workers(p18)

rule
If you employ both farm and nonfarm workers, you must treat employment taxes for the farmworkers (Form 943 taxes) separately from employment taxes for the nonfarm workers (Form 941 and 944 taxes). Form 943 taxes and Form 941/944 taxes are not combined for purposes of applying any of the deposit schedule rules.
If a deposit is due, deposit the Form 941/944 taxes and the Form 943 taxes by making separate deposits. For example, if you are a monthly schedule depositor for both Forms 941/944 and 943 taxes and your tax liability at the end of June is $1,500 reportable on Form 941/944 and $1,200 reportable on Form 943, deposit both amounts by July 15. Use one transaction to deposit the $1,500 of Form 941/944 taxes and another transaction to deposit the $1,200 of Form 943 taxes.