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Depositing and Reporting Employment Taxes

Depositing Employment Taxes

In general, you must deposit federal income tax withheld, and both the employer and employee social security and Medicare taxes.

There are two deposit schedules, monthly and semi-weekly. Before the beginning of each calendar year, you must determine which of the two deposit schedules you are required to use. To determine your payment schedule, review Publication 15 for Forms 941, 944 and 945, or Publication 51 for Form 943. If you fail to make a timely deposit, you may be subject to a failure-to-deposit penalty of up to 15 percent.

Deposits for FUTA Tax (Form 940) are required for the quarter within which the tax due exceeds $500. The tax must be deposited by the end of the month following the end of the quarter.

You must use electronic funds transfer (EFTPS) to make all federal tax deposits. See the Employment Tax Due Dates page for information on when deposits are due.

Reporting Employment Taxes

Generally, employers must report wages, tips and other compensation paid to an employee by filing the required form(s) to the IRS. You must also report taxes you deposit by filing Forms 940, 941 and 944 on paper or through e-file.

Federal Income Tax and Social Security and Medicare Tax

In general, employers who withhold federal income tax or social security and Medicare taxes must file Form 941, Employer's Quarterly Federal Tax Return each quarter. This includes withholding on sick pay and supplemental unemployment benefits

File Form 943, Employer's Annual Federal Tax Return for Agricultural Employees if you are filling to report agricultural wages.

File Form 944, Employer’s Annual Federal Tax Return if you have received written notification about the Form 944 program.

File Form 945, Annual Return of Withheld Federal Income Tax if you are filing to report backup withholding.

Federal Unemployment Tax Act (FUTA)

Only the employer pays FUTA tax; it is not withheld from the employee's wages. Report your FUTA taxes by filing Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return.

Preparing and Filing Form W-2

At the end of the year, the employer must complete Form W-2, Wage and Tax Statement to report wages, tips and other compensation paid to an employee. File Copy A of all paper Forms W-2 with Form W-3, Transmittal of Wage and Tax Statements, to the Social Security Administration (SSA). File Copy 1 to an employee’s state or local tax department.

Due Dates

See the Employment Tax Due Dates page for filing and depositing due dates. For more information on depositing and filing these forms, refer to Publication 15, Employer’s Tax Guide.

Page Last Reviewed or Updated: 03-Feb-2014