$100,000 next-day deposit rule for federal 941, 944, & 943
This article contains information about the $100,000 next-day deposit rule.
You have a payroll that has a federal tax liability of $100,000 or more.
$100,000 Next-Day Deposit Rule: When any single payroll (or a combination of payrolls within an assigned "deposit period") has a federal tax liability amount that exceeds $100,000 (line 10 of Form 941 or line 9 of Form 944), you must deposit the tax by the next banking day. California (CA), Oregon (OR), South Carolina (SC), and Arizona (AZ) also follow this same rule and you must make your state payment on the same day they make your IRS payment. Note: Payments to CA, OR, SC, and AZ still need to be made on the same day as the IRS even if the state tax liability is below $100k.
Whether you are a monthly or semi-weekly scheduled depositor, you must remain on a semi-weekly schedule for the remainder of the year and the following year.
Service Specific Information
Enhanced Payroll and E-pay Service for QuickBooks Desktop
See also E-pay 940 and 941/944 in QuickBooks
An enhancement has been made to QuickBooks 2014 and later versions. You will be prompted about this rule when creating a paycheck and you accumulate $100,000 or more Federal 940/943/941 taxes:
To pay through the EFTPS Website:
- Make a payment through the EFTPS website (www.EFTPS.com) or through the EFTPS phone system (1.800.555.3453). You can use the same Login Requirements that you use in e-paying in QuickBooks.
- Create a liability check in QuickBooks to record your payment, and assign EFTPS to the check number.
IMPORTANT! If you use the QuickBooks e-Pay service, your payment will be processed in 2 banking days (at least). IRS will consider the payment to be late and you may be penalized.
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The IRS penalty for a next day tax deposit not being made on time is automatically 10% of the 941 taxes due.