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    Federal tax liability over 100K

    Article ID: 1000229

    Overview

    If your company incurred a cumulative federal tax liability that exceeds $100,000.00 in a single payroll period (line 10 of Form 941 or line 9 of Form 944), the IRS directly debits your account. This article explains why a separate check paid to the IRS is in your QuickBooks payroll register.

    • For a complete description on the $100,000 Next-Day Deposit Rule, see page 27 of the IRS Publication 15.
    • For more information on deposit schedules, see Publication 3151.

    Expected Outcome

    You will undertand the reason for the IRS check.

    Assumptions

    You have incurred a cumulative federal tax liability amount that exceeds $100,000.00 in a single payroll period.

    Details

    When any single payroll (or a combination of payrolls within a tax payment deposit period) has a federal tax liability amount that exceeds $100,000.00, the IRS requires the tax deposit to be made on the following business day. QuickBooks Assisted Payroll notifies the IRS of the liability amount, but the amount is actually debited from your account directly by the IRS.

    If payroll is not sent by 5 p.m. Pacific time, at least 2 business days before the check date, the IRS debit will be late, and you will be assessed a penalty that is at least 10% of the tax liability.

    The remaining state taxes, along with federal unemployment, are recorded on the QuickBooks Payroll Service liability check. This is a separate debit to your company's bank account.

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