Page 27 - IRS Employer Tax Guide

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
The credit against employment taxes for COBRA rules for Forms 944 and 945, later. Also see Application of
TIP assistance payments is treated as a deposit of Monthly and Semiweekly Schedules, later in this section.
taxes on the first day of your return period. See These rules don't apply to FUTA tax. See section
COBRA premium assistance credit under Introduction, 14 for information on depositing FUTA tax.
earlier, for more information. !
CAUTION
Payment with return. You may make a payment with a Lookback period. If you’re a Form 941 filer, your de-
timely filed Form 941 or Form 944 instead of depositing, posit schedule for a calendar year is determined from the
without incurring a penalty, if one of the following applies. total taxes reported on Forms 941, line 12, in a 4-quarter
• You’re a monthly schedule depositor (defined later) lookback period. The lookback period begins July 1 and
and make a payment in accordance with the Accuracy ends June 30 as shown next in Table 1. If you reported
of Deposits Rule, discussed later in this section. This $50,000 or less of taxes for the lookback period, you’re a
payment may be $2,500 or more. monthly schedule depositor; if you reported more than
$50,000, you’re a semiweekly schedule depositor.
• Your Form 941 total tax liability for either the current
quarter or the prior quarter is less than $2,500, and Table 1. Lookback Period for Calendar Year
you didn't incur a $100,000 next-day deposit obliga- 2020
tion during the current quarter. If you aren't sure your
total tax liability for the current quarter will be less than July 1, 2018, Oct. 1, 2018, Jan. 1, 2019, Apr. 1, 2019,
$2,500 (and your liability for the prior quarter wasn't through through through through
less than $2,500), make deposits using the semi- Sept. 30, 2018 Dec. 31, 2018 Mar. 31, 2019 June 30, 2019
weekly or monthly rules so you won't be subject to an
FTD penalty. The lookback period for a 2020 Form 941 filer
who filed Form 944 in either 2018 or 2019 is cal-
• Your Form 944 net tax liability for the year is less than ! endar year 2018.
$2,500. CAUTION
If you’re a Form 944 filer for the current year or either of
• Your Form 944 net tax liability for the year is $2,500 or the preceding 2 years, your deposit schedule for a calen-
more and you already deposited the taxes you owed dar year is determined from the total taxes reported during
for the first, second, and third quarters of the year; the second preceding calendar year (either on your Form
your net tax for the fourth quarter is less than $2,500; 941 for all 4 quarters of that year or your Form 944 for that
and you're paying, in full, the tax you owe for the fourth year). The lookback period for 2020 for a Form 944 filer is
quarter with a timely filed return. calendar year 2018. If you reported $50,000 or less of

Separate deposit requirements for nonpayroll (Form taxes for the lookback period, you’re a monthly schedule
depositor; if you reported more than $50,000, you’re a
945) tax liabilities. Separate deposits are required for semiweekly schedule depositor.
nonpayroll and payroll income tax withholding. Don't com- If you’re a Form 945 filer, your deposit schedule for a
bine deposits for Forms 941 (or Form 944) and Form 945 calendar year is determined from the total taxes reported
tax liabilities. Generally, the deposit rules for nonpayroll li- on line 3 of your Form 945 for the second preceding cal-
abilities are the same as discussed next, except the rules endar year. The lookback period for 2020 for a Form 945
apply to an annual rather than a quarterly return period. If filer is calendar year 2018.
the total amount of tax for the year reported on Form 945
is less than $2,500, you're not required to make deposits Adjustments and the lookback rule. Adjustments
during the year. See the separate Instructions for Form made on Form 941-X, Form 944-X, and Form 945-X don't
945 for more information. affect the amount of tax liability for previous periods for
purposes of the lookback rule.
When To Deposit Example. An employer originally reported a tax liabil-

There are two deposit schedules—monthly and semi- ity of $45,000 for the lookback period. The employer dis-
weekly—for determining when you deposit social security, covered, during January 2020, that the tax reported for
Medicare, and withheld federal income taxes. These one of the lookback period quarters was understated by
schedules tell you when a deposit is due after a tax liability $10,000 and corrected this error by filing Form 941-X.
arises. Your tax liability is based on the dates payments This employer is a monthly schedule depositor for 2020
were made or wages were paid. For taxable noncash because the lookback period tax liabilities are based on
fringe benefits, see When taxable fringe benefits are trea- the amounts originally reported, and they were $50,000 or
ted as paid in section 5. Before the beginning of each cal- less. The $10,000 adjustment is also not treated as part of
endar year, you must determine which of the two deposit the 2020 taxes.
schedules you’re required to use. The deposit schedule Deposit period. The term “deposit period” refers to the
you must use is based on the total tax liability you repor- period during which tax liabilities are accumulated for
ted on Form 941 during a lookback period, discussed each required deposit due date. For monthly schedule de-
next. Your deposit schedule isn't determined by how often positors, the deposit period is a calendar month. The de-
you pay your employees or make deposits. See special posit periods for semiweekly schedule depositors are

Page 26 Publication 15 (2020)