Tax Deposit Semi-Weekly Schedule and $100,000 Wire Requirements

IRS Notice 931: Deposit Requirements for Employment Taxes (attached)

Applies to taxes filed under the IRS 941 Form:

• Federal Income Tax (FIT)
• Social Security Tax (FICA/OASDI)
• Medicare (MEDI)

Semi-Weekly Deposit Schedule

$100,000 Next-Day Deposit Rule

If you accumulate a 941 tax liability of $100,000 or more on any single day during a deposit period you must deposit the tax by the close of the next business day. This requires the client to wire.

• Example:
  • Tax liability of $110K on Thursday must be wired

The $100,000 next-day deposit rule calculates based on all tax liability within the same deposit period.

• Example:
  • Tax liability of $60K on Thursday does not need to be wired because under $100K
  • Tax liability of $45K on Friday must be wired because this puts the total tax liability for the period over $100K

Once you've accumulated at least $100,000 in a deposit period, stop accumulating at the end of that day and begin to accumulate anew the next day.

• Example:
  • Tax liability of $110K on Monday
    • Must wire $110K because over $100K
  • Tax liability of $30K on Tuesday
    • Since they've already reached $100K within the deposit period the base resets and the $30K tax liability for Tuesday does not need to be wired since it's under $100K.

Don't continue accumulating tax liabilities after the end of a deposit period.

• Exampe:
  • Tax liability of $95K on Tuesday
  • Tax liability of $10K on Wednesday
  • The $100K next-day deposit rule doesn't apply because the $10K is accumulated on the next deposit period
    • $95K deposited by Friday
    • $10K deposited by following Wednesday

IRS Notice 931 - Deposit Requirements for Employment Taxes.pdf