Individuals and businesses that pay wages to an employee are generally required to make Federal and State payroll tax payments. They are also required to file the proper tax returns. Understanding the payroll tax payments rules as well as 941, RT-6 & 940 form filing requirements is an important part of running your business.
Accurate and timely filing is the key to avoid payroll tax penalties. Outsourcing your business payroll tasks and responsibilities is one of the best options as the rules can be complex and the penalties for noncompliance are serious.
Let’s review essential reporting and deposit requirements for each tax reporting.
Form 941 Employer’s Quarterly Federal Tax Return
Employers are generally required to withhold federal income tax from their employees’ wages. You can use the employee’s Form W-4 to determine how much tax to withhold. In addition, employers must use the appropriate method and tax withholding table.
Normally, an employer must withhold part of social security and Medicare taxes from employees’ wages. You must deposit taxes that are withhold from your employee’s paycheck. The amount of the deposit also includes a matching amount or contribution from the employer.
Payroll Tax Payments for 941 tax
Make a payment with a timely filed Form 941 if you are a monthly schedule depositor and the total tax liability in a quarter is less than $2,500.
Next-Day Deposit Rule
If the total liability amount is $100,000 or more in taxes on any day during a monthly or semiweekly deposit period, you must deposit the tax by the next business day. This rule applies whether you are a monthly or semiweekly schedule depositor.
Monthly Schedule Depositor
For total reported taxes of $50,000 or less during the lookback period, you are consider a monthly schedule depositor. Generally you must deposit your employment taxes on payments made during a given month on or before the 15th day of the following month.
Semiweekly Schedule Depositor
Employers with total reported taxes of more than $50,000 during the lookback period are considered a semiweekly schedule depositor. Deposits should be made within 3 business days on payments made during any given pay period.
How to calculate your tax liability for the previous lock-back period.
The lookback period is the 12-month period ending on June 30th of the prior year. For example, for calendar year 2022, the twelve-month lookback period is: July 1, 2020 thru June 30, 2021.
Gather all 941 forms filed during the lock-back period. Add up the total tax liability reported in each quarter to determine the total liability for that one-year period.
For calendar year 2022, you should add the following 941 forms quarter ending on:
- September 30, 2020
- December 31, 2020
- March 31, 2021 and,
- June 30, 2021
To learn more about employee classification and other useful advice for employers, read this article: How to Classify Your Employees and Contractors.
940 Employer’s Annual Federal Unemployment (FUTA) Tax Return
The federal unemployment tax (FUTA), with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs.
FUTA tax rate is 6.0% for the first $7,000 you pay to each employee as wages during the year. State rates and wage based may be different.
Payroll Tax Payments for 940 (FUTA) tax
Deposit FUTA tax by the last day of the first month that follows the end of the quarter. If your FUTA tax liability for any calendar quarter is $500 or less, you don\’t have to deposit the tax. Instead, you may carry it forward and add to the liability amount in the next quarter.
Deposit the liability for the fourth quarter plus any undeposited amount from all previous quarters by January 31.
940 (FUTA) Quarter Ending, Payment and Filing Datelines
- 1st Quarter, ending on March 30th – File and pay by April 30th
- 2nd Quarter, ending on June 30th – File and pay by July 31st
- 3rd Quarter, ending on September 30th – File and pay by October 31st
- 4th Quarter, ending on December 31st – File and pay by January 31st
Read about how to manage employee expenses, for useful advice: How to Manage Employees Expenses?
RT-6 Florida Department of Revenue Employer’s Quarterly Report
First, Florida employers should register to obtain a reemployment tax account. Every employer who is liable for reemployment taxes must timely complete and file the Employer’s Quarterly Report.
It is important to ensure employee’s SSN are correct. The penalty for filing erroneous, incomplete or insufficient reports with the Florida Department of Revenue is $50 or 10% of any tax due but not more than $300 per report.
Note that all employers must file a report even if they do not owe tax or do not have any wages to report.
Payroll Tax Payments for Florida Reemployment tax (RT-6)
Deposit reemployment tax by the last day of the first month that follows the end of the quarter.
RT-6 Quarter Ending, Payment and Filing Datelines
- 1st Quarter, ending on March 30th – File and pay by April 30th
- 2nd Quarter, ending on June 30th – File and pay by July 31st
- 3rd Quarter, ending on September 30th – File and pay by October 31st
- 4th Quarter, ending on December 31st – File and pay by January 31st
Additionally, some small employers are designated to file Form 944 Employer’s Annual Federal Tax Return instead of Form 941. In order to make deposits and file Form 944, employers will need to meet certain criteria. Business whose employment tax liability is $1,000 or less may use form 944.
Further, it is important to keep in mind that the requirement to use one of the two deposit schedules for 941 must be determined prior to the beginning of every calendar year.
Finally, understanding payroll tax payments and 941, RT-6 & 940 filings requirements is an important topic all employers need to know. Payroll taxes must be deposited with the government in a timely manner. If the employer fails to make a timely deposit or file a tax return on time, then the employer will be subject to a failure-to-deposit or filing penalty plus interest on the tax amount owed.
Should you need payroll services, you can subscribe to our Payroll services. For help determining your filing requirements or computing your payroll tax liability, contact us. Call our office for immediate assistance. We are always happy to assist you.
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