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Publication 51

7. Depositing Taxes(p16)

Generally, you must deposit both the employer and employee share of social security and Medicare taxes and federal income tax withheld. You must use EFT to make all federal tax deposits. See How To Deposit, later in this section, for information on electronic deposit requirements.
The credit against employment taxes for COBRA premium assistance payments is treated as a deposit of taxes on the first day of your return period. For more information, see COBRA premium assistance credit under Introduction, earlier.

Payment with return. (p16)

You may make payments with Forms 943 or 945 instead of depositing if one of the following applies.
Only monthly schedule depositors are allowed to make an Accuracy of Deposits Rule payment with the return. Semiweekly schedule depositors must timely deposit the amount by the shortfall makeup date. See Accuracy of Deposits Rule and How To Deposit, later in this section.

When To Deposit(p16)

If you employ both farm and nonfarm workers, don't combine the taxes reportable on Forms 941 or 944 with Form 943 to decide whether to make a deposit. See Employers of Both Farm and Nonfarm Workers, later in this section.
The rules for determining when to deposit Form 943 taxes are discussed below. See section 10 for the separate rules that apply to FUTA tax. Under these rules, you’re classified as either a monthly schedule depositor or a semiweekly schedule depositor.
The terms "monthly schedule depositor" and "semiweekly schedule depositor" don't refer to how often your business pays its employees or how often you’re required to make deposits. The terms identify which set of rules you must follow when you incur a tax liability (for example, when you have a payday).
The deposit schedule that you must use for a calendar year is determined from the total tax liability reported on your Form 943, line 11, for the lookback period, discussed next.

Lookback period.(p17)

The lookback period is the second calendar year preceding the current calendar year. For example, the lookback period for 2018 is 2016.

Example of deposit schedule based on lookback period.(p17)

Rose Co. reported taxes on Form 943 as follows.
Rose Co. is a monthly schedule depositor for 2018 because its taxes for the lookback period ($48,000 for calendar year 2016) weren't more than $50,000. However, for 2019, Rose Co. is a semiweekly schedule depositor because the total taxes before adjustment for its lookback period ($60,000 for calendar year 2017) exceeded $50,000.
Adjustments to lookback period taxes.(p17)
To determine your taxes for the lookback period, use only the tax that you reported on the original return (Form 943, line 11). Don't include adjustments shown on Form 943-X.

Example of adjustments. (p17)

An employer originally reported total tax of $45,000 for the lookback period in 2016. The employer discovered during March 2018 that the tax reported for the lookback period was understated by $10,000 and corrected this error by filing Form 943-X. The total tax reported in the lookback period is still $45,000. The $10,000 adjustment is also not treated as part of the 2018 taxes.

Deposit period.(p17)

The term "deposit period" refers to the period during which tax liabilities are accumulated for each required deposit due date. For monthly schedule depositors, the deposit period is a calendar month. The deposit periods for semiweekly schedule depositors are Wednesday through Friday and Saturday through Tuesday.
If you're an agent with an approved Form 2678, the deposit rules apply to you based on the total employment taxes accumulated by you for your own employees and on behalf of all employers for whom you're authorized to act. For more information on an agent with an approved Form 2678, see Revenue Procedure 2013-39, 2013-52 I.R.B. 830, available at

Monthly Deposit Schedule(p17)

If the tax liability reported on Form 943, line 11, for the lookback period is $50,000 or less, you’re a monthly schedule depositor for the current year. You must deposit Form 943 taxes on payments made during a calendar month by the 15th day of the following month.

Monthly schedule example.(p17)

Red Co. is a seasonal employer and a monthly schedule depositor. It pays wages each Friday. It paid wages during April 2018, but didn't pay any wages during May. Red Co. must deposit the combined tax liabilities for the April paydays by May 15. Red Co. doesn't have a deposit requirement for May (that is, due by June 15, 2018) because no wages were paid in May; therefore, it didn't have a tax liability for May.

New employers.(p17)

For agricultural employers, your tax liability for any year in the lookback period before the date you started or acquired your business is considered to be zero. Therefore, you’re a monthly schedule depositor for the first and second calendar years of your agricultural business (but see the $100,000 Next-Day Deposit Rule, later in this section).

Semiweekly Deposit Schedule(p17)

You’re a semiweekly schedule depositor for a calendar year if the tax liability on Form 943, line 11, during your lookback period was more than $50,000. Under the semiweekly deposit schedule, deposit Form 943 taxes for payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. Deposit amounts accumulated for payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday.
Semiweekly depositors aren't required to deposit twice a week if their payments were in the same semiweekly period unless the $100,000 Next-Day Deposit Rule (discussed later in this section) applies. For example, if you made a payment on both Wednesday and Friday and incurred taxes of $10,000 for each pay date, deposit the $20,000 by the following Wednesday. If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday.
Semiweekly schedule depositors must complete Form 943-A, Agricultural Employer's Record of Federal Tax Liability, and submit it with Form 943.

Semiweekly Deposit Schedule

IF the payday falls on a... THEN deposit taxes by
 the following...
Wednesday, Thursday, and/or Friday Wednesday
Saturday, Sunday, Monday, and/or Tuesday Friday

Semiweekly schedule example.(p17)

Green, Inc., is a semiweekly schedule depositor and pays wages once each month on the last Friday of the month. Green, Inc., will deposit only once a month, but the deposit will be made under the semiweekly deposit schedule as follows. Green, Inc.'s tax liability for the April 27, 2018 (Friday), wage payment must be deposited by May 2, 2018 (Wednesday).

Semiweekly deposit period spanning two return periods.(p17)

If you have more than one pay date during a semiweekly period and the pay dates fall in different return periods, you will need to make separate deposits for the separate liabilities. For example, if you have a pay date on Saturday, December 30, 2017, and another pay date on Tuesday, January 2, 2018, two separate deposits will be required even though the pay dates fall within the same semiweekly period. Both deposits will be due Friday, January 5, 2018 (3 business days from the end of the semiweekly deposit period).

Deposits Due on Business Days Only(p18)

If a deposit is required to be made on a day that isn't a business day, the deposit is considered timely if it is made by the close of the next business day. A business day is any day other than a Saturday, Sunday, or legal holiday. For example, if a deposit is required to be made on Friday and Friday is a legal holiday, the deposit is considered timely if it is made by the following Monday (if Monday is a business day).
Semiweekly schedule depositors(p18)
will always have 3 business days following the close of the semiweekly period to make a deposit. That is, if any of the 3 weekdays after the end of a semiweekly period is a legal holiday, you will have an additional day for each day that is a legal holiday to make the deposit. For example, if a semiweekly schedule depositor accumulated taxes on Friday and the following Monday is a legal holiday, the deposit normally due on Wednesday may be made on Thursday (this allows 3 business days to make the deposit).

Legal holiday.(p18)

The term "legal holiday" means any legal holiday in the District of Columbia. For purposes of the deposit rules, the term "legal holiday" doesn't include other statewide legal holidays. Legal holidays for 2018 are listed below.

$100,000 Next-Day Deposit Rule(p18)

If you accumulate $100,000 or more of Form 943 taxes (that is, taxes reported on Form 943, line 13) on any day during a deposit period, you must deposit the tax by the close of the next business day, whether you’re a monthly or a semiweekly schedule depositor.
For purposes of the $100,000 rule, don't continue accumulating a tax liability after the end of a deposit period. For example, if a semiweekly schedule depositor has accumulated a liability of $95,000 on a Tuesday (of a Saturday-through-Tuesday deposit period) and accumulated a $10,000 liability on Wednesday, the $100,000 next-day deposit rule doesn't apply because the $10,000 is accumulated in the next deposit period. Thus, $95,000 must be deposited by Friday and $10,000 must be deposited by the following Wednesday.
However, once you accumulate at least $100,000 in a deposit period, stop accumulating at the end of that day and begin to accumulate anew on the next day. For example, Fir Co. is a semiweekly schedule depositor. On Monday, Fir Co. accumulates taxes of $110,000 and must deposit this amount on Tuesday, the next business day. On Tuesday, Fir Co. accumulates additional taxes of $30,000. Because the $30,000 isn't added to the previous $110,000 and is less than $100,000, Fir Co. doesn't have to deposit the $30,000 until Friday (following the semiweekly deposit schedule).
If you’re a monthly schedule depositor and you accumulate a $100,000 tax liability on any day of a calendar month, you become a semiweekly schedule depositor on the next day and remain so for at least the rest of the calendar year and for the following calendar year.

Example of the $100,000 next-day deposit rule.(p18)

Elm, Inc., started its business on May 7, 2018. Because Elm, Inc., is a new employer, the taxes for its lookback period are considered to be zero; therefore, Elm, Inc., is a monthly schedule depositor. On May 9 (Wednesday), Elm, Inc., paid wages for the first time and accumulated taxes of $50,000. On May 11 (Friday), Elm, Inc., paid wages and accumulated taxes of $60,000, for a total of $110,000. Because Elm, Inc., accumulated $110,000 on May 11, it must deposit $110,000 by May 14 (Monday), the next business day. Elm, Inc., became a semiweekly schedule depositor on May 12. It will be a semiweekly schedule depositor for the remainder of 2018 and for 2019.

Accuracy of Deposits Rule(p18)

You’re required to deposit 100% of your tax liability on or before the deposit due date. However, penalties won't be applied for depositing less than 100% if both of the following conditions are met.
  1. Any deposit shortfall doesn't exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited.
  2. The deposit shortfall is paid or deposited by the shortfall makeup date as described next.

Makeup Date for Deposit Shortfall:(p18)


How To Deposit(p19)

You must deposit employment taxes by EFT. See Payment with return, earlier in this section, for exceptions explaining when taxes may be paid with the tax return instead of being deposited.

Electronic deposit requirement. (p19)

You must use EFT to make all federal tax deposits. Generally, an EFT is made using EFTPS. If you don't want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf.
EFTPS is a free service provided by the Department of Treasury. To get more information or to enroll in EFTPS, visit, or call 1-800-555-4477 or 1-800-733-4829 (TDD). Additional information about EFTPS is also available in Pub. 966.
New employers that have a federal tax obligation will be pre-enrolled in EFTPS. Call the toll-free number located in your EIN Package to activate your enrollment and begin making your tax deposit payments. See When you receive your EIN in section 1 for more information.
Deposit record.(p19)
For your records, an EFT Trace Number will be provided with each successful payment. The number can be used as a receipt or to trace the payment.
Depositing on time.(p19)
For deposits made by EFTPS to be on time, you must submit the deposit by 8 p.m. Eastern time the day before the date a deposit is due. If you use a third party to make a deposit on your behalf, they may have different cutoff times.
Same-day wire payment option.(p19)
If you fail to submit a deposit transaction on EFTPS by 8 p.m. Eastern time the day before the date a deposit is due, you can still make your deposit on time by using the Federal Tax Collection Service (FTCS). To use the same-day wire payment method, you will need to make arrangements with your financial institution ahead of time. Please check with your financial institution regarding availability, deadlines, and costs. Your financial institution may charge you a fee for payments made this way. To learn more about the information you will need to give your financial institution to make a same-day wire payment, go to

Deposit Penalties(p19)

Penalties may apply if you don't make required deposits on time or if you make deposits for less than the required amount. The penalties don't apply if any failure to make a proper and timely deposit was due to reasonable cause and not to willful neglect. If you receive a penalty notice, you can provide an explanation of why you believe reasonable cause exists.
If you timely filed your employment tax return, the IRS may waive deposit penalties if you inadvertently failed to deposit and it was the first quarter that you were required to deposit any employment tax, or if you inadvertently failed to deposit the first time after your deposit frequency changed. You must also meet the net worth and size limitations applicable to awards of administrative and litigation costs under section 7430; for individuals, this means that your net worth can't exceed $2 million, and for businesses, your net worth can't exceed $7 million and you also can't have more than 500 employees.
For amounts not properly deposited or not deposited on time, the penalty rates are shown next.
Penalty Charged for...
2% Deposits made 1 to 5 days late.
5% Deposits made 6 to 15 days late.
10% Deposits made 16 or more days late, but before 10 days from the date of the first notice the IRS sent asking for the tax due.
10% Amounts that should have been deposited, but instead were paid directly to the IRS or paid with your tax return. See Payment with return, earlier in this section, for exceptions.
15% Amounts still unpaid more than 10 days after the date of the first notice that the IRS sent asking for the tax due or the day on which you received notice and demand for immediate payment, whichever is earlier.
Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability.

Order in which deposits are applied.(p19)

Deposits generally are applied to the most recent tax liability within the year. If you receive an FTD penalty notice, you may designate how your deposits are to be applied in order to minimize the amount of the penalty, if you do so within 90 days of the date of the notice. Follow the instructions on the penalty notice that you received. For examples on how the IRS will apply deposits and more information on designating deposits, see Revenue Procedure 2001-58. You can find Revenue Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at


Cedar, Inc., is required to make a deposit of $1,000 on May 15 and $1,500 on June 15. It doesn't make the deposit on May 15. On June 15, Cedar, Inc., deposits $2,000. Under the deposits rule, which applies deposits to the most recent tax liability, $1,500 of the deposit is applied to the June 15 deposit and the remaining $500 is applied to the May deposit. Accordingly, $500 of the May 15 liability remains undeposited. The penalty on this underdeposit will apply as explained earlier.

Trust fund recovery penalty.(p20)

If federal income, social security, or Medicare taxes that must be withheld (that is, trust fund taxes) aren't withheld or aren't deposited or paid to the United States Treasury, the trust fund recovery penalty may apply. The penalty is 100% of the unpaid trust fund tax. If these unpaid taxes can't be immediately collected from the employer or business, the trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, or paying over these taxes, and who acted willfully in not doing so.
A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, an accountant, a volunteer director/trustee, or an employee of a sole proprietorship. A responsible person also may include one who signs checks for the business or otherwise has authority to cause the spending of business funds.
Willfully means voluntarily, consciously, and intentionally. A responsible person acts willfully if the person knows that the required actions of collecting, accounting for, or paying over trust fund taxes aren't taking place, or recklessly disregards obvious and known risks to the government's right to receive trust fund taxes.

"Averaged" FTD penalty.(p20)

The IRS may assess an "averaged" FTD penalty of 2% to 10% if you’re a monthly schedule depositor and didn't properly complete Form 943, line 17, when your tax liability shown on Form 943, line 13, was $2,500 or more. The IRS may also assess this penalty of 2% to 10% if you’re a semiweekly schedule depositor and your tax liability shown on Form 943, line 13, was $2,500 or more and you did any of the following.
The IRS figures the penalty by allocating your tax liability on Form 943, line 13, equally throughout the tax period. Then we apply your deposits and payments to the averaged liabilities in the date order we received your deposits. We figure the penalty on any tax not deposited, deposited late, or not deposited in the correct amounts. Your deposits and payments may not be counted as timely because we don’t know the actual dates of your tax liabilities.
You can avoid the penalty by reviewing your return before filing it. Follow these steps before filing your Form 943.

Employers of Both Farm and Nonfarm Workers(p20)

If you employ both farm and nonfarm workers, you must treat employment taxes for the farmworkers (Form 943 taxes) separately from employment taxes for the nonfarm workers (Form 941 and 944 taxes). Form 943 taxes and Form 941/944 taxes aren't combined for purposes of applying any of the deposit schedule rules. See Household employees, later, for the rules on household employment.
If a deposit is due, deposit the Form 941/944 taxes and the Form 943 taxes by making separate deposits. For example, if you’re a monthly schedule depositor for both Forms 941/944 and 943 taxes and your tax liability at the end of May is $1,500 reportable on Form 941/944 and $1,200 reportable on Form 943, deposit both amounts by June 15. Use one transaction to deposit the $1,500 of Form 941/944 taxes and another transaction to deposit the $1,200 of Form 943 taxes.