Payroll Taxes

When an Insufficient Employment Tax Deposit May Not Cause a Penalty

You are required to deposit 100% of your employment tax liability on or before the deposit due date. However, penalties will not be applied for depositing less the 100% if both of the following conditions are met:

  • Any deposit shortfall does not exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited and
  • The deposit shortfall is paid or deposited by the shortfall makeup date described next

Makeup Date For Deposit Shortfall

  • Monthly schedule depositor.
    • Deposit the shortfall or pay it with your return by the due date of your return for the return period in which the shortfall occurred.
    • You may pay the shortfall with your return even if the amount is $2,500 or more.
  • Semiweekly schedule depositor:
    • Deposit by the earlier of:
      • The first Wednesday or Friday (whichever comes first) that falls on or after the 15th of the month following the month in which the shortfall occurred or
      • The due date of your return (for the return period of the tax liability).