BHT&D Certified Public Accountants Blog

How And When Do I Deposit Federal Payroll Tax Liabilities?

Posted by Lori Shepard on Thu, Jun 18, 2015 @ 07:00 AM

PaydayWith few exceptions, Federal payroll tax deposits must be paid to the US Treasury by electronic funds transfer.

Form 941:  The only exception to paying by EFTPS, (Electronic Funds Transfer Payment System) is if your total tax liability for the quarter is less than $2,500. If your total tax liability for the quarter is less than $2,500, then you may pay your tax with Form 941. Include with Form 941 a check payable to “United States Treasury” and Form 941-V.

Form 943:  The same rules apply here, but the “exception” to paying by EFTPS, is if your total tax liability for the year is less than $2,500. If you are not sure what your annual tax liability will be, we would recommend that monthly payments be made through EFTPS.

Deposit Schedule:  Your deposit schedule is not determined by how often you pay your employees. Your deposit schedule depends on the total tax liability you reported on Form 941 during the previous 4-quarter “lookback period” (July 1 – June 30 of the preceding calendar year). If the total tax liability for the “lookback period” is:

$50,000 or less: Monthly depositor - must pay the tax due by the 15th of the month following the month in which the liability incurred.  For example:  the tax liability for the month of May is due on or before June 15th.

More than $50,000: Semiweekly depositor - must pay the tax due either on Wednesday or Friday (semiweekly) depending on when the payroll checks are issued:  

If the paycheck date is on a Wednesday, Thursday and/or Friday, deposit tax by the following Wednesday.  If the paycheck date is on a Saturday, Sunday, Monday and/or Tuesday, deposit tax by following Friday.

CAUTION:  If you accumulate a tax liability of $100,00 or more on any day, you must deposit the tax by the close of the next business day.

If you are a monthly depositor and accumulate a $100,000 tax liability on any day, you become a semiweekly depositor on the next day and remain so for at least the rest of the calendar year and for the following calendar year.

USING EFTPS (Electronic Funds Transfer Payment System): If you are not comfortable using EFTPS, you can arrange for our office to make electronic deposits on your behalf. If you would like help in setting up your company for paying electronically, please feel free to contact one of our CPAs at (616) 642-9467 or request a complimentary accounting consultation.

Tags: Payroll Tax; EFTPS