I recently received a notice from the IRS. Why did I receive a notice titled “Your 2012 Federal Tax Deposit Requirements for Form 941”?
Answer: The Internal Revenue Service (IRS) sends this notice to employers who have a change in deposit frequency.
Employers May Have One of Two Deposit Frequencies
Employers may have one of two deposit frequencies assigned. The first frequency is a semi-weekly frequency assigned to employers who had a tax liability of more than $50,000 during the lookback period. The second frequency is a monthly frequency assigned to employers who had a tax liability of $50,000 or less during the lookback period. For 2012, the lookback period is the period from July 1, 2010 to June 30, 2011.
Semi-Weekly Depositors Have Two Due Dates per Week
Employers assigned a semi-weekly deposit frequency generally must deposit taxes on one a two days each week. Any taxes accumulated for wages paid Saturday, Sunday, Monday, or Tuesday are due on Friday of that week and taxes accumulated for wages paid Wednesday, Thursday, or Friday are due Wednesday of the following week. Holidays or special rules may change those due dates.
Monthly Depositors Have One Due Date per Month
Employers assigned a monthly deposit frequency must deposit taxes accumulated for wages paid during a calendar month by the fifteenth of the following month. Weekends, holidays or special rules may change those due dates.
Weekends and Holidays Extend Due Date
If a due date falls on a weekend or a legal holiday in the District of Columbia, it extends the due date until the next day that is not a weekend or a legal holiday in the District of Columbia.
$100,000 Next-Day Deposit Rule May Apply
For taxpayers with a semi-weekly deposit frequency, if the total accumulated liability reaches $100,000 during any semi-weekly period, that deposit is due the next business day. For taxpayers with a monthly deposit frequency, if the total accumulated liability reaches $100,000 during any monthly period, that deposit is due the next business day. In addition, taxpayers with a monthly deposit frequency who accumulate a liability of $100,000 during a calendar month must deposit using the semi-weekly deposit rules for the remainder of that calendar year, unless the $2,500 rule applies.
$2,500 Rule May Reduce Deposit Frequency
Employers may pay their tax liability when filing Form 941 if their total Form 941 tax liability for either the current quarter or the preceding quarter is less than $2,500 and they did not incur a $100,000 next day obligation during the current quarter.
Vision Payroll Will Make Tax Deposits Following These Rules