Page 30 - IRS Employer Tax Guide

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May 8, Elm, Inc., paid wages and accumulated a liability range for your tax professional, financial institution, payroll
of $60,000, bringing its total accumulated tax liability to service, or other trusted third party to make electronic de-
$100,000. Because this was the first year of its business, posits on your behalf. EFTPS is a free service provided by
the tax liability for its lookback period is considered to be the Department of the Treasury. To get more information
zero, and it would be a monthly schedule depositor based about EFTPS or to enroll in EFTPS, visit EFTPS.gov, or
on the lookback rules. However, since Elm, Inc., accumu- call 800-555-4477 or 800-733-4829 (TDD). Additional in-
lated a $100,000 liability on May 8, it became a semi- formation about EFTPS is also available in Pub. 966.
weekly schedule depositor on May 9. It will be a semi-
When you receive your EIN. If you’re a new em-
weekly schedule depositor for the remainder of 2020 and ployer that indicated a federal tax obligation when re-
for 2021. Elm, Inc., is required to deposit the $100,000 by
Monday, May 11, the next business day. questing an EIN, you’ll be pre-enrolled in EFTPS. You’ll
receive information about Express Enrollment in your Em-
Accuracy of Deposits Rule ployer Identification Number (EIN) Package and an addi-
tional mailing containing your EFTPS personal identifica-
You’re required to deposit 100% of your tax liability on or tion number (PIN) and instructions for activating your PIN.
before the deposit due date. However, penalties won't be Call the toll-free number located in your “How to Activate
applied for depositing less than 100% if both of the follow- Your Enrollment” brochure to activate your enrollment and
ing conditions are met. begin making your payroll tax deposits. If you outsource
any of your payroll and related tax duties to a third-party
• Any deposit shortfall doesn't exceed the greater of payer, such as a payroll service provider (PSP) or report-
$100 or 2% of the amount of taxes otherwise required ing agent, be sure to tell them about your EFTPS enroll-
to be deposited. ment.
• The deposit shortfall is paid or deposited by the short- Deposit record. For your records, an EFT Trace
fall makeup date as described next. Number will be provided with each successful payment.

Makeup Date for Deposit Shortfall: The number can be used as a receipt or to trace the pay-
ment.
1. Monthly schedule depositor. Deposit the shortfall Depositing on time. For deposits made by EFTPS to
or pay it with your return by the due date of your return be on time, you must submit the deposit by 8 p.m. Eastern
for the return period in which the shortfall occurred. time the day before the date the deposit is due. If you use
You may pay the shortfall with your return even if the a third party to make a deposit on your behalf, they may
amount is $2,500 or more. have different cutoff times.
2. Semiweekly schedule depositor. Deposit by the Same-day wire payment option. If you fail to submit
earlier of: a deposit transaction on EFTPS by 8 p.m. Eastern time
a. The first Wednesday or Friday (whichever comes the day before the date a deposit is due, you can still
first) that falls on or after the 15th day of the month make your deposit on time by using the Federal Tax Col-
following the month in which the shortfall occur- lection Service (FTCS) to make a same-day wire pay-
red, or ment. To use the same-day wire payment method, you’ll
b. The due date of your return (for the return period need to make arrangements with your financial institution
ahead of time. Please check with your financial institution
of the tax liability). regarding availability, deadlines, and costs. Your financial
For example, if a semiweekly schedule depositor has a institution may charge you a fee for payments made this
deposit shortfall during June 2020, the shortfall makeup way. To learn more about the information you’ll need to
date is July 15, 2020 (Wednesday). However, if the short- give to your financial institution to make a same-day wire
fall occurred on the required April 1, 2020 (Wednesday), payment, go to IRS.gov/SameDayWire.
deposit due date for a March 27, 2020 (Friday), pay date,
the return due date for the March 27, 2020, pay date (April How to claim credit for overpayments. If you depos-
30, 2020) would come before the May 15, 2020 (Friday), ited more than the right amount of taxes for a quarter, you
shortfall makeup date. In this case, the shortfall must be can choose on Form 941 for that quarter (or on Form 944
deposited by April 30, 2020. for that year) to have the overpayment refunded or applied
as a credit to your next return. Don't ask EFTPS to request
How To Deposit a refund from the IRS for you.

Deposit Penalties
You must deposit employment taxes, including Form 945
taxes, by EFT. See Payment with return, earlier in this Although the deposit penalties information provi-
section, for exceptions explaining when taxes may be TIP ded next refers specifically to Form 941, these
paid with the tax return instead of being deposited. rules also apply to Form 945 and Form 944. The
penalties won't apply if the employer qualifies for the ex-
Electronic deposit requirement. You must use EFT to ceptions to the deposit requirements discussed under
make all federal tax deposits. Generally, an EFT is made Payment with return, earlier in this section).
using EFTPS. If you don't want to use EFTPS, you can ar-

Publication 15 (2020) Page 29