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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Application of Monthly and On Monday, Fir Co. accumulates taxes of $110,000 and
must deposit this amount on Tuesday, the next business
Semiweekly Schedules day. On Tuesday, Fir Co. accumulates additional taxes
The terms “monthly schedule depositor” and of $30,000. Because the $30,000 isn't added to the
“semiweekly schedule depositor” don't refer to how often previous $110,000 and is less than $100,000, Fir Co.
your business pays its employees or even to how often must deposit the $30,000 by Friday, following the
you must make deposits. The terms identify which set of semiweekly deposit schedule.
deposit rules you must follow when an employment tax If you’re a monthly schedule depositor and
liability arises. The deposit rules are based on the dates accumulate a $100,000 tax liability on any day, you
wages are paid, not on when employment tax liabilities become a semiweekly schedule depositor on the next
are accrued. day and remain so for at least the rest of the calendar
year and for the following calendar year.
Monthly schedule example. Spruce Co. is a monthly
schedule depositor with seasonal employees. It paid
wages each Friday during May, but didn't pay any
wages during June. Under the monthly schedule,
Spruce Co. must deposit the combined tax liabilities for CAUTION!
The $100,000 tax liability threshold requiring
the May paydays by June 15. Spruce Co. doesn't have a
a next-day deposit is determined before you consider
deposit requirement for June (due by July 15) because
any reduction of your liability for nonrefundable
no wages were paid and, therefore, it didn't have a tax
credits. For more information, see frequently asked
liability for June.
question 17 at IRS.gov/ETD.
Semiweekly schedule example. Green, Inc., has a
semiweekly deposit schedule and pays wages once
each month on the last Friday of the month. Although
Green, Inc., has a semiweekly deposit schedule, it will Example of $100,000 next-day deposit rule. Elm,
deposit just once a month because it pays wages only Inc., started its business on May 1, 2023. On
once a month. The deposit, however, will be made Wednesday, May 3, it paid wages for the first time and
under the semiweekly deposit schedule as follows: accumulated a tax liability of $40,000. On Friday, May 5,
Green, Inc.’s tax liability arises when it pays wages on Elm, Inc., paid wages and accumulated a liability of
April 28, 2023 (Friday); the liability must be deposited by $60,000, making its accumulated tax liability total
May 3, 2023 (Wednesday). Under the semiweekly $100,000. Elm, Inc., must deposit $100,000 by Monday,
deposit schedule, liabilities for wages paid on May 8, the next business day. Because this was the first
Wednesday through Friday must be deposited by the year of its business, the tax liability for its lookback
following Wednesday. period is considered to be zero, and it would be a
monthly schedule depositor based on the lookback
rules. However, because Elm, Inc., accumulated
$100,000 Next-Day Deposit Rule $100,000 on May 5, it became a semiweekly schedule
If you accumulate a tax liability of $100,000 or more on depositor on May 6. It will be a semiweekly schedule
any day during a deposit period, you must deposit the depositor for at least the remainder of 2023 and for
tax by the close of the next business day, whether you’re 2024.
a monthly or semiweekly schedule depositor. The
deposit period for monthly schedule depositors is a Adjustments and the Lookback Rule
calendar month. For semiweekly schedule depositors,
the deposit periods are Wednesday through Friday and Determine your tax liability for the lookback period
Saturday through Tuesday. (4-quarter lookback period for Form 941 and
calendar-year lookback period for Forms 943, 944, 945,
For the $100,000 next-day deposit rule, don't
and CT-1) based on the tax liability as originally
continue accumulating tax liabilities after the end of a
reported. If you later made adjustments to correct errors
deposit period. For example, if a semiweekly schedule
on those returns by filing a Form 941-X, Form 943-X,
depositor has accumulated a liability of $95,000 on a
Form 944-X, Form 945-X, or Form CT-1 X, these
Tuesday (of a Saturday-through-Tuesday deposit
adjustments don't affect the amount of the employment
period) and accumulated a $10,000 liability on
tax liability for the lookback rule.
Wednesday, the $100,000 next-day deposit rule doesn't
apply because the $10,000 is accumulated in the next
Example of adjustments and the lookback rule for
deposit period. Therefore, $95,000 must be deposited
Form 941. An employer originally reported a tax liability
by Friday and $10,000 by the following Wednesday.
of $45,000 for the 4 quarters in the lookback period
In addition, once you accumulate at least $100,000 in ending June 30, 2022. This makes the employer a
a deposit period, stop accumulating at the end of that monthly schedule depositor because the tax liability
day and begin to accumulate anew the next day. For originally reported didn't exceed $50,000. The employer
example, Fir Co. is a semiweekly schedule depositor. discovered during January 2023 that the tax during 1 of
IRS.gov Catalog No. 14736T
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