skip navigation

Search Help
Navigation Help

Topic Index
ABCDEFGHI
JKLMNOPQR
STUVWXYZ#

FAQs
Forms
Publications
Tax Topics

Comments
About Tax Map

IRS.gov Website
Publication 80
taxmap/pubs/p80-008.htm#en_us_publink1000233961

8. Depositing Taxes(p9)

rule
You 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.
taxmap/pubs/p80-008.htm#en_us_publink1000233962

Payment with Return(p9)

rule
taxmap/pubs/p80-008.htm#en_us_publink1000240431

$2,500 rule.(p9)

rule
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:
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.
EIC
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_publink1000233964

When To Deposit(p9)

rule
Under 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_publink1000233965

Lookback period for employers of nonfarm workers.(p9)

rule
The 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_publink1000233966
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_publink1000233967

Lookback period for employers of farmworkers.(p10)

rule
The 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_publink1000233968

Adjustments to lookback period taxes.(p10)

rule
To 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_publink1000233969
Example.(p10)
An 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_publink1000233970

Deposit Period(p10)

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/p80-008.htm#en_us_publink1000233971

Monthly Deposit Schedule(p10)

rule
If 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_publink1000233972

New employers.(p10)

rule
Your 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).
taxmap/pubs/p80-008.htm#en_us_publink1000233973

Semiweekly Deposit Schedule(p10)

rule
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.
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.
taxmap/pubs/p80-008.htm#en_us_publink1000233974

Semiweekly deposit period spanning two quarters.(p10)

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.
taxmap/pubs/p80-008.htm#en_us_publink1000233975
Example.(p10)
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 on Wednesday, April 6, 2011 (3 business days from the end of the semiweekly deposit period).
taxmap/pubs/p80-008.htm#en_us_publink1000233976

Examples of Monthly and Semiweekly Schedules(p10)

rule
taxmap/pubs/p80-008.htm#en_us_publink1000233977

Employers of nonfarm workers.(p10)

rule
Rose Co. reported Form 941-SS taxes as follows:
2010 Lookback Period
3rd Quarter 2008$12,000
4th Quarter 200812,000
1st Quarter 200912,000
2nd Quarter 200912,000
 $48,000
2011 Lookback Period
3rd Quarter 2009$12,000
4th Quarter 200912,000
1st Quarter 201012,000
2nd Quarter 201015,000
 $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.
taxmap/pubs/p80-008.htm#en_us_publink1000233980

Employers of farmworkers.(p10)

rule
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_publink1000233981

New agricultural employers.(p10)

rule
New 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.
taxmap/pubs/p80-008.htm#en_us_publink1000233982

Deposits on Business Days Only(p11)

rule
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_publink1000255045

Legal holiday.(p11)

rule
The term "legal holiday" means any legal holiday in the District of Columbia. Legal holidays for 2011 are listed below.
taxmap/pubs/p80-008.htm#en_us_publink1000254147
Special rule for 2011.(p11)
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_publink1000233983

Application of Monthly and Semiweekly Schedules(p11)

rule
The examples below illustrate the procedure for determining the deposit date under the two different deposit schedules.
taxmap/pubs/p80-008.htm#en_us_publink1000233984

Monthly schedule example.(p11)

rule
Spruce 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_publink1000233985

Semiweekly schedule example.(p11)

rule
Green, 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_publink1000233986

$100,000 Next-Day Deposit Rule(p11)

rule
If 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).
EIC
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_publink1000233988
Example.(p11)
Elm, 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_publink1000233989

Accuracy of Deposits Rule(p11)

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, and
  2. The deposit shortfall is paid or deposited by the shortfall makeup date as described below.
Makeup date for deposit shortfall:
  1. 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.
  2. Semiweekly schedule depositor. Deposit by the earlier of:
    1. 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
    2. 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_publink1000233990

Employers of Both Farm and Nonfarm Workers(p12)

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-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_publink1000233991

How To Deposit(p12)

rule
You 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.
taxmap/pubs/p80-008.htm#en_us_publink1000233992

Electronic deposit requirement.(p12)

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 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.
taxmap/pubs/p80-008.htm#en_us_publink1000233993
When you receive your EIN.(p12)
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_publink1000233995
Deposit record.(p12)
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/p80-008.htm#en_us_publink1000233994
Depositing on time.(p12)
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 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_publink1000254164

Same-day payment option.(p12)

rule
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 your financial institution to make a same-day wire payment, please visit www.eftps.gov to download the Same-Day Payment Worksheet.
taxmap/pubs/p80-008.htm#en_us_publink1000234003

How to claim credit for overpayments.(p12)

rule
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_publink1000234004

Deposit Penalties(p12)

rule
Penalties 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

Special rule for former Form 944-SS filers.(p12)

rule
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_publink1000234007

Order in which deposits are applied.(p13)

rule
Deposits 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.
taxmap/pubs/p80-008.htm#en_us_publink1000234008

Example.(p13)

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_publink1000234009

Trust fund recovery penalty.(p13)

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, 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_publink1000234010

"Averaged" failure-to-deposit penalty.(p13)

rule
IRS 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.
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.
EIC
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.