James D. Lynch
HOW OFTEN MUST YOU DEPOSIT PAYROLL TAXES?
If you are an employer, the IRS has various different schedules for determining when you deposit the Social Security taxes, Medicare taxes, and federal income taxes that you withhold from your employees' paychecks.
● QUARTERLY: If your tax liability for the current quarter is less than $2500, or your tax liability for the previous quarter was less than $2500, and you didn't incur a $100,000 next-day deposit obligation during the current quarter, you may remit your payroll taxes quarterly together with your timely filed Form 941.
● MONTHLY: If your tax liability is more than $2500 for the quarter but less than $50,000 for the year, you must deposit your payroll taxes on the 15th of each month following the month the wages/salaries were paid. For example, taxes withheld from employee paychecks in January must be remitted to the IRS by February 15th.
● SEMIWEEKLY: Once your payroll tax liability starts to exceed $50,000 per year, the IRS will send you a letter stating that you are now a semiweekly depositor. In general, you deposit employment taxes for payments made on Wednesday, Thursday, or Friday by the following Wednesday,and you deposit taxes for payments made on Saturday, Sunday, Monday, or Tuesday by the following Friday. You must stay on the semiweekly deposit schedule, even if your tax liability drops below $50,000 per year, until the IRS notifies you otherwise.
● NEXT DAY: When any single payroll has a payroll tax liability that exceeds $100,000, you must deposit the tax by the next banking day.
Note that the above deposit schedules do not affect your filing frequency. Form 941 is due quarterly, regardless of your deposit schedule.