What This Notice Means

A CP137 tells agricultural employers what their Federal Tax Deposit (FTD) schedule will be next year for Form 943, Employer's Annual Federal Tax Return for Agricultural Employees. The IRS bases the schedule on the tax reported on last year's Form 943.

Your Deposit Schedule

  • Last year's tax liability was $50,000 or less: you're a monthly depositor next year. Deposit taxes for wages accumulated during a month by the 15th of the following month.
  • Last year's tax liability was over $50,000: you're a semiweekly depositor next year. For wages paid Saturday, Sunday, Monday, or Tuesday, deposit by the following Friday. For wages paid Wednesday, Thursday, or Friday, deposit by the following Wednesday.

What to Do

  • Check the tax amount on the notice against your records. If it's different, you must determine the correct deposit schedule yourself.
  • The IRS uses the original liability from last year's return. Adjustments made on Form 943-X don't change your deposit schedule.
  • If the tax amount on the notice is zero, you may need to file last year's Form 943. If you weren't required to file, or you filed one showing no tax, no action is needed.

Paying and Reporting

  • You must make all federal tax deposits electronically unless your tax is less than $2,500. If your tax for the year is under $2,500, you can pay it with Form 943.
  • On Form 943, show your tax liabilities, not your payments. The IRS already has a record of your payments.
  • Monthly depositors enter tax due for each month in the monthly summary. Semiweekly depositors use Form 943-A to enter tax due for each payday.

The $100,000 Rule

If your accumulated liability reaches $100,000, you must deposit by the close of the next business day. You then become a semiweekly depositor for the rest of the year and the next year.

If you received a CP137 notice and have payroll deposit problems, call us at (813) 229-7100.