Notice 931 sets the deposit rules and schedule for Form 941. This information is also used for Forms 943, 944, 945, and CT-1.
Two Deposit Schedules
There are two deposit schedules—monthly or semiweekly—for determining when you deposit social security and Medicare taxes and withheld federal income tax. These schedules tell you when a deposit is due after a tax liability arises (for example, when you have a payday). Before the beginning of each calendar year, you must determine which of the two deposit schedules you must use. You must use the deposit schedule based on the total tax liability you reported during a lookback period. Your deposit schedule isn’t determined by how often you pay your employees or make deposits.
Deposit Rules For 941
Your deposit schedule (monthly or semiweekly) for Form 941, Employer’s QUARTERLY Federal Tax Return, is based on the total tax liability you reported on Form 941 during a 4-quarter lookback period discussed later under the Lookback period for Form 941.
Instead of making deposits during the current quarter, you can pay your total Form 941 tax liability when you timely file Form 941 if:
1. Your total Form 941 tax liability for either the current quarter or the preceding quarter is less than $2,500, and
2. You don’t incur a $100,000 next-day deposit obligation during the current quarter.
If you’re not sure your total liability for the current quarter will be less than $2,500, and your liability for the preceding quarter wasn’t less than $2,500, make deposits using the semiweekly or monthly rules so you won’t be subject to failure-to-deposit penalties. For more information about deposit rules for Form 941, see section 11 of Pub. 15.
941 Semiweekly Deposit Schedule
You would be a semiweekly scheduled depositor for a calendar year if the total taxes during your lookback period were more than $50,000.
Deposit Period (Payment Days) Deposit By
Wednesday, Thursday, and/or Friday —> Following Wednesday
Saturday, Sunday, Monday, and/or Tuesday —> Following Friday
$100,000 Next-Day Deposit Rule
Suppose you accumulate a tax liability of $100,000 or more on any day during a deposit period. In that case, you must deposit the tax by the close of the next business day, whether you’re a monthly or semiweekly depositor.
Suppose you’re a monthly schedule depositor and accumulate a $100,000 tax liability on any day. In that case, you become a semiweekly scheduled depositor on the next day and remain so for at least the rest of the calendar year and for the following calendar year.
Deposit Rules For Annual Forms 943, 944, 945, and CT-1
Generally, the deposit rules for quarterly filers of Form 941 also apply to annual filers of Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees; Form 944, Employer’s ANNUAL Federal Tax Return; Form 945, Annual Return of Withheld Federal Income Tax; and Form CT-1, Employer’s Annual Railroad Retirement Tax Return. However, the period used as your lookback period is different; see the Lookback period for annual returns later. For more information about deposit rules for annual returns, see section 11 of Pub. 15 (for Forms 943, 944, and 945) and the Instructions for Form CT-1.
Federal Tax Deposits Must Be Made By Electronic Funds Transfer (EFT)
You must use EFT to make all federal tax deposits. You can use the integrated Aatrix solution to make electronic deposits on your behalf.
Depositing On Time
For EFTPS deposits to be on time, you must submit the deposit by 8 p.m. Eastern time, the day before the deposit is due. If you fail to submit an EFTPS deposit on time, you may use the same-day wire payment option discussed above.
The Lookback Period For Form 941
Your deposit schedule for a calendar year is determined from the total taxes reported on your Form 941 in a 4-quarter lookback period. The lookback period begins July 1 and ends June 30, as shown in the following chart. If you reported $50,000 or less of Form 941 taxes for the lookback period, you’re a monthly scheduled depositor; if you reported more than $50,000, you’re a semiweekly scheduled depositor.
The Lookback Period For Annual Returns
The lookback period is the calendar year preceding the previous year for annual returns (Forms 943, 944, 945, and CT-1). For example, the lookback period for 2024 is 2022.
Accuracy of Deposits Rule
You’re required to deposit 100% of your tax liability on or before the deposit due date. However, penalties for depositing less than 100% won’t apply if both of the following conditions are met:
- Any deposit shortfall doesn’t exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited.
- The deposit shortfall is paid or deposited by the shortfall makeup date as described below.
Makeup Date for Deposit Shortfall Monthly Schedule Depositor
Deposit or pay the shortfall with your return by the due date of the return. You may pay the shortfall with your return, even if the amount is $2,500 or more.
Makeup Date For Semiweekly Schedule Depositor
Deposit by the earlier of:
1. The first Wednesday or Friday that falls on or after the 15th day of the month following the month in which the shortfall occurred or:
2. The due date of your return (for the return period of the tax liability). Forms 941, 943, 944, and 945 are due by the last day of the month following the period for which the returns were made. Form CT-1 is due by the last day of the second month following the calendar year.
