Publication 80
taxmap/pubs/p80-008.htm#en_us_publink1000233961You must deposit social security and Medicare taxes if your tax
liability (line 10 of the 2011 Form 941-SS, line 7 of Form 944-SS, or line 9 of
Form 943) is $2,500 or more for the tax return period. You must make the deposit
by electronic funds transfer. For more information about electronic funds
transfers, see
How To Deposit on page 12.
Instead of making deposits during the current quarter, you can
pay your total Form 941-SS tax liability when you timely file Form 941-SS if:
- Your total Form 941 tax liability for either the current quarter
or the preceding quarter is less than $2,500 and
- You do not incur a $100,000 next-day deposit obligation during
the current quarter.
If you are not sure your total 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 semiweekly or monthly rules so you
won't be subject to failure to deposit penalties.
Employers who have been notified to file Form 944-SS can pay
their tax liability due for the fourth quarter with Form 944-SS, if their 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, in order to avoid failure-to-deposit penalties for deposits due
during those quarters.
 | Only monthly schedule depositors 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/p80-008.htm#en_us_publink1000233964Under the rules discussed below, the only difference between
farm and nonfarm workers' employment tax deposit rules is the lookback period.
Therefore, farm and nonfarm workers are discussed together except where noted.
Depending on your total taxes reported during a lookback period
(discussed below), you are 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 you pay your employees or how often you are
required to make deposits. The terms identify which set of rules that you must
follow when a tax liability arises (for example, when you have a payday).
You will need to determine your deposit schedule for a calendar
year based on the total employment taxes reported on line 8 of Form 941-SS, line
8 of Form 941, or line 9 of Form 943 for your lookback period (defined below).
If you filed both Forms 941-SS and 941 during the lookback period, combine the
tax liabilities for these returns for purposes of determining your deposit
schedule. Determine your deposit schedule for Form 943 separately from Forms
941-SS and 941.
taxmap/pubs/p80-008.htm#en_us_publink1000233965The lookback period for Form 941-SS (or Form 941) consists of
four quarters beginning July 1 of the second preceding year and ending June 30
of the prior year. These four quarters are your lookback period even if you did
not report any taxes for any of the quarters. For 2011, the lookback period is
July 1, 2009, through June 30, 2010.
taxmap/pubs/p80-008.htm#en_us_publink1000233966taxmap/pubs/p80-008.htm#TXMP62621d3d
lookback
The lookback period for Form 944-SS (or Form 944) is the second calendar year
preceding the current calendar year. For example, the lookback period for
calendar year 2011 is calendar year 2009. In addition, for employers who filed
Form 944-SS (or Form 944) for 2009 or 2010 and will file Form 941-SS (or Form
941) for 2011, the lookback period for 2011 is the second calendar year
preceding the current calendar year, that is, 2009.
taxmap/pubs/p80-008.htm#en_us_publink1000233967The lookback period for Form 943 is the second calendar year
preceding the current calendar year. The lookback period for calendar year 2011
is calendar year 2009.
taxmap/pubs/p80-008.htm#en_us_publink1000233968To determine your taxes for the lookback period, use only the
tax that you reported on the original returns (Forms 941-SS, 944-SS, or Form
943). Do not include any adjustments shown on Form 941-X, Form 944-X, or Form
943-X.
taxmap/pubs/p80-008.htm#en_us_publink1000233969An employer originally reported total taxes of $45,000 for the
lookback period. The employer discovered during January 2011 that the tax
reported during the lookback period was understated by $10,000 and corrected
this error by filing Form 941-X. The 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/p80-008.htm#en_us_publink1000233970The 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/p80-008.htm#en_us_publink1000233971If your total tax reported for the lookback period is $50,000
or less, you are a monthly schedule depositor for the current year. You must
deposit taxes on wage payments made during a calendar month by the 15th day of
the following month.
taxmap/pubs/p80-008.htm#en_us_publink1000233972Your tax liability for any quarter 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 calendar year of
your business (but see the
$100,000 Next-Day Deposit Rule
on page 11).
If your total tax reported for the lookback period is more than
$50,000, you are a semiweekly schedule depositor for the current year. If you
are a semiweekly schedule depositor, you must deposit on Wednesday and/or
Friday, depending on what day of the week that you make wage payments, as
follows.
- Deposit taxes on wage payments made on Wednesday, Thursday,
and/or Friday by the following Wednesday.
- Deposit taxes on wage payments made on Saturday, Sunday, Monday,
and/or Tuesday by the following Friday.
Semiweekly depositors are generally not required to deposit twice
a week if their payments were in the same semiweekly period unless the
$100,000 Next-Day Deposit Rule
on page 11 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 on
the following Wednesday. If you made no additional payments on Saturday through
Tuesday, no deposit is due on Friday.
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.
taxmap/pubs/p80-008.htm#en_us_publink1000233975If 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 on Wednesday, April 6, 2011 (3
business days from the end of the semiweekly deposit period).
taxmap/pubs/p80-008.htm#en_us_publink1000233976taxmap/pubs/p80-008.htm#en_us_publink1000233977Rose Co. reported Form 941-SS taxes as follows:
| 2010 Lookback Period |
|---|
| 3rd Quarter 2008 | $12,000 |
| 4th Quarter 2008 | 12,000 |
| 1st Quarter 2009 | 12,000 |
| 2nd Quarter 2009 | 12,000 |
| | $48,000 |
| 2011 Lookback Period |
|---|
| 3rd Quarter 2009 | $12,000 |
| 4th Quarter 2009 | 12,000 |
| 1st Quarter 2010 | 12,000 |
| 2nd Quarter 2010 | 15,000 |
| | $51,000 |
Rose Co. is a monthly schedule depositor for 2010 because its
taxes for the four quarters in its lookback period ($48,000 for the 3rd quarter
of 2008 through the 2nd quarter of 2009) were not more than $50,000. However,
for 2011, Rose Co. is a semiweekly schedule depositor because the total taxes
for the four quarters in its lookback period ($51,000 for the 3rd quarter of
2009 through the 2nd quarter of 2010) exceeded $50,000.
Red Co. reported taxes on its 2009 Form 943 (line 9) of $48,000.
On its 2010 Form 943 (line 9), it reported taxes of $60,000.
Red Co. is a monthly schedule depositor for 2011 because its
taxes for its lookback period ($48,000 for calendar year 2009) were not more
than $50,000. However, for 2012, Red 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/p80-008.htm#en_us_publink1000233981New agricultural employers filing Form 943 are monthly schedule
depositors for the first and second calendar years of their business because
their taxes for the lookback period (2 years) are considered to be zero.
However, see the
$100,000 Next-Day Deposit Rule on page 11.
If a deposit due date falls 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 Friday, but 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/p80-008.htm#en_us_publink1000255045The 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/p80-008.htm#en_us_publink1000233983The examples below illustrate the procedure for determining the
deposit date under the two different deposit schedules.
taxmap/pubs/p80-008.htm#en_us_publink1000233984Spruce 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/p80-008.htm#en_us_publink1000233985Green, 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/p80-008.htm#en_us_publink1000233986If you accumulate taxes of $100,000 or more on any day during
a deposit period, you must deposit 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
taxes after the end of a deposit period. For example, if a semiweekly schedule
depositor has accumulated taxes of $95,000 on Tuesday and $10,000 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 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 normal semiweekly
deposit schedule).
| If you are a monthly schedule depositor and you accumulate
a $100,000 tax liability on any day during a month, 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/p80-008.htm#en_us_publink1000233988Elm, Inc. started its business on April 1, 2011. On April 12,
it paid wages for the first time and accumulated a tax liability of $40,000. On
Friday, April 15, Elm, Inc. paid wages and accumulated a liability of $60,000,
making its accumulated Form 941-SS tax liability total $100,000. Elm, Inc. must
deposit $100,000 by April 18, the next business day. 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, because Elm, Inc. accumulated $100,000 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.
taxmap/pubs/p80-008.htm#en_us_publink1000233989You 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, and
- The deposit shortfall is paid or deposited by the shortfall
makeup date as described below.
Makeup date for deposit shortfall:
- Monthly schedule depositor.
Deposit or pay the shortfall by the due date of the Form 941-SS, 944-SS, or Form
943 for the 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
comes on or after the 15th of the month following the month in which the
shortfall occurred, or
- The return due date for the period in which the shortfall
occurred.
For example, if a semiweekly schedule depositor filing Form 941-SS
has 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 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/p80-008.htm#en_us_publink1000233990If 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-SS or Form 944-SS taxes). Form 943 taxes and Form
941-SS (or Form 944-SS) taxes are not combined for purposes of applying any of
the deposit rules.
If a deposit is due, deposit the Form 941-SS (or Form 944-SS)
taxes and Form 943 taxes separately, as discussed below.
taxmap/pubs/p80-008.htm#en_us_publink1000233991You must deposit employment taxes by electronic funds transfer.
See
Payment with Return,
earlier, 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 are required to make deposits and fail to do so, you may
be subject to a penalty equal to 10% of the required deposit. EFTPS is a free
service provided by the Department of the Treasury. To get more information or
to enroll in EFTPS, call 1-800-555-4477 toll free (U.S. Virgin Islands only) or
303-967-5916 (toll call). 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. Follow the steps 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/p80-008.htm#en_us_publink1000233995For 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/p80-008.htm#en_us_publink1000233994For 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 deposits on your behalf, they may have different
cutoff times.
taxmap/pubs/p80-008.htm#en_us_publink1000254164If 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 your financial institution to make a same-day wire
payment, please visit
www.eftps.gov
to download the
Same-Day Payment Worksheet.
If you deposited more than the right amount of taxes for a tax
period, you can choose on Form 941-SS, Form 941, Form 944-SS, Form 944, or Form
943 for that tax period 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/p80-008.htm#en_us_publink1000234004Penalties may apply if you do not make required deposits on time
or if you make deposits of 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 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 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 that 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,
earlier, 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/p80-008.htm#en_us_publink1000234006
If you filed Form 944-SS for the prior year and must file Forms 941-SS for the
current year because your employment tax liability for the prior year exceeded
the Form 944-SS eligibility requirement ($1,000 or less), the failure-to-deposit
penalty will not apply to a late deposit of employment taxes for the first month
of the current year if the taxes are deposited in full by March 15 of the
current year.
taxmap/pubs/p80-008.htm#en_us_publink1000234007Deposits generally are applied to the most recent tax liability
within the return period (quarter or year). However, if you receive a
failure-to-deposit penalty notice, you may designate how your payment is 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 more information on designating deposits, see Rev. Proc.
2001-58. You can find Rev. Proc. 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 April
15 and $1,500 on May 15. It does not make the deposit on April 15. On May 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 May 15
deposit and the remaining $500 is applied to the April deposit. Accordingly,
$500 of the April 15 liability remains undeposited. The penalty on this
underdeposit will apply as explained above.
taxmap/pubs/p80-008.htm#en_us_publink1000234009If 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, or any other person or entity that is
responsible for collecting, accounting for, and paying over trust fund taxes. 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/p80-008.htm#en_us_publink1000234010IRS 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-SS when your tax liability (line 8) shown on Form
941-SS 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 8) shown on
Form 941-SS was $2,500 or more and you did any of the following.
- Completed line 17 of Form 941-SS instead of Schedule B (Form
941).
- Failed to attach a properly completed Schedule B (Form 941).
- Completed Schedule B (Form 941) incorrectly, for example,
by entering tax deposits instead of tax liabilities in the numbered spaces.
IRS figures the penalty by allocating your total tax liability
on line 8 of Form 941-SS, 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 941-SS.
- If you are a monthly schedule depositor, report your tax liabilities
(not your deposits) in the monthly entry spaces on line 17.
- 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 you paid your employees.
- Verify that your total liability shown on line 17 of Form
941-SS or the bottom of Schedule B (Form 941) equals your tax liability shown on
line 8 of Form 941-SS.
- Do not show negative amounts on line 17 or Schedule B (Form
941).
- For prior period errors,
do not
adjust your tax liabilities reported on line 17 or on Schedule B (Form 941).
Instead, file an adjusted return (Form 941-X or 944-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 Form 944-SS).
| If you filed Form 944-SS for 2010 and line 7 was $2,500 or
more, you were required to complete lines 15a through 15m on Form 944-SS or
attach Form 945-A, Annual Record of Federal Tax Liability. If you failed to
complete lines 15a through 15m or failed to attach Form 945-A, whichever was
required, IRS may assess an "averaged" failure-to-deposit (FTD) penalty. |
Previous Page |
Table of Contents |
Index |
Next Page
