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ITG FAQ #5 Answer-What is a lookback period?

What is a lookback period?

The lookback period begins on July 1 and ends on June 30 of the following year. See the example below for determining the lookback period for taxes due in calendar year 2008.

Lookback Period for Calendar Year 2008

Lookback Period

Calendar Year 2008:
January - December

 2006

 2007 

 

July 1

September 30

October 1

December 31

January 1

March 31

April 1

June 30

You must first determine your tax liability (as originally reported without regard to any adjustments/corrections made) for the four quarters in the lookback period reported on Form 941. You should follow the monthly depositor schedule if the total taxes on Form 941 for the four quarters in your lookback period were $50,000 or less. As a monthly depositor, Form 941 taxes must be deposited by the 15th day of the following month. (NOTE: Don’t confuse deposit requirements with filing requirements. Although deposits are required to be made monthly, the Form 941 is a quarterly return and should be filed quarterly.)

You must follow the semiweekly schedule for deposits if your total tax liability in the lookback period exceeds $50,000. The deposit schedule for semiweekly depositors is as follows:

 If the payday falls on a…

 Then deposit taxes by
 Wednesday, Thursday, and/or Friday  Wednesday
 Saturday, Sunday, Monday, and/or Tuesday   Friday

There is one exception to the monthly/semiweekly depositor schedules. If you have an accumulated tax liability (reduced by any advanced Earned Income Credit) of $100,000 or more on any day during a deposit period, you must deposit the tax by the next banking day. If you were a monthly depositor prior to the $100,000 deposit, you must follow the semiweekly deposit rules for the remainder of the calendar year in which you accrued the $100,000 deposit and for the year following.

New employers should follow the monthly deposit schedule unless they have an accumulated deposit of $100,000 or more and then they would become a semiweekly schedule depositor for the remainder of the year and the entire subsequent year.

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Page Last Reviewed or Updated: 14-Aug-2014