Please note: this article is about the Justworks Payroll product. Not sure which product you're using? Check out: How Do I Know Which Justworks Product I Have?
In general, employers are required to remit federal income tax, Medicare and Social Security taxes according to the appropriate IRS deposit schedule for their business. You will need to provide your company’s deposit schedule to Justworks Payroll before your company is active on the platform in order to ensure that we are remitting correctly on your company’s behalf.
How Can I Determine My IRS Deposit Schedule?
There are two deposit schedules — monthly and semiweekly. Businesses should check out the guidelines listed in IRS Publication 15 to determine their deposit schedule.
To determine your deposit schedule, you will need to calculate the tax obligations your company reported to the IRS during the applicable four-quarter lookback period for your company, described further below. Your deposit schedule will depend on the amount of your obligations reported during the applicable lookback period, as follows:
$50,000 or less: Businesses that reported $50,000 or less in federal taxes are monthly depositors.
Over $50,000: Businesses that owed more than $50,000 in federal taxes are semi-weekly depositors.
New businesses: For new businesses, the amount reported in the lookback period would be zero, resulting in a monthly deposit schedule (subject to some exceptions).
Form 941 Filers
If you report your payroll taxes on IRS Form 941 during the current calendar year and the preceding two calendar years, your four-quarter lookback period covers the July 1 through June 30 period from the prior two calendar years.
For example, to determine your deposit schedule for 2023, review your company’s Form 941 filings for the following quarters:
- July 1, 2021 through Sept. 30, 2021
- Oct. 1, 2021 through Dec. 31, 2021
- Jan. 1, 2022 through Mar. 31, 2022
- Apr. 1, 2022 through June 30, 2022
Form 944 Filers
If you report your payroll taxes on IRS Form 944 during the current calendar year or either of the preceding two calendar years, your lookback period is the calendar year that is two years prior. For example, the lookback period for 2023 deposits is the calendar year 2021.
Your total tax liability for the lookback period is determined based on the amount of taxes you reported on Forms 941, line 12, or Form 944, line 9. Adjustments made on Form 941-X, Form 944-X, and Form 945-X don’t affect the amount of tax liability for previous periods for purposes of the lookback rule.
Your total liability isn’t reduced by the refundable portion of the credit for qualified sick and family leave wages, the refundable portion of the employee retention credit, or the refundable portion of the COBRA premium assistance credit.
Do State Taxes Have a Deposit Schedule?
States also assign businesses a deposit schedule to follow. Typically, the state will include a statement of an employer’s deposit schedule as part of the registration process, and you can confirm your deposit schedule by reviewing this document, or by reaching out to the state directly.
Justworks Payroll will need to receive your state deposit schedule unless you’re filing in a state that does not withhold income tax, these states would not assign deposit schedules. The following states do not have income taxes or a deposit schedule:
- Alaska
- Florida
- Nevada
- South Dakota
- Texas
- Washington
- Wyoming
When Do I Need to Update My Deposit Schedule?
It is best practice to annually review your deposit schedule as part of your company’s end-of-year process. In general, your deposit frequency will change only if you receive an update from the IRS stating that you have received a new deposit schedule.
If you do receive an IRS notice, you can update your deposit schedule in Justworks Payroll by following these steps:
- Go to the Settings tab under the category Company
- Click the Federal or State link in the Company Taxes section depending on the information that needs to be updated
- Click Schedule Changes to enter and save the new deposit schedule
Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.