What This Notice Means
Your federal tax deposit schedule changed. The IRS sent a notice about it, but you kept making deposits on the prior schedule. That made you subject to a failure to deposit penalty.
Because the schedule change was recent, the IRS waived the penalty. The waiver was tied to that recent change. Fix the schedule now.
What to Do
Review your deposit requirements and use the correct schedule immediately.
- If your total tax in the lookback period was $50,000 or less, you're a monthly depositor.
- If it was over $50,000, you're a semiweekly depositor.
The lookback period for annual returns is the second previous year. For Form 941, it's the four quarters ending with the second quarter of the previous year. If you filed Form 944 in either of the two prior years, the lookback period is the second previous year.
When Deposits Are Due
- Monthly depositors: by the 15th of the following month. If the 15th is a weekend or holiday, the next business day.
- Semiweekly depositors with payroll on Wednesday, Thursday, or Friday: the following Wednesday.
- Semiweekly depositors with payroll on Saturday, Sunday, Monday, or Tuesday: the following Friday.
If your accumulated liability reaches $100,000, deposit the next business day. Once that happens in any month, you're a semiweekly depositor for the rest of the year and the next year.
All deposits must be made electronically unless your tax liability is under $2,500.
Didn't Get the Earlier Notice?
You're responsible for knowing your deposit schedule whether or not a notice arrives. The IRS sends schedule-change notices in November based on the original returns for the lookback period. It doesn't consider amended returns, and it can't figure your schedule if a return wasn't filed.
Check your requirements every October so you have time to adjust payroll.
If deposit penalties are piling up on your business, call us at (813) 229-7100.