Federal Payroll Tax

2008 FEDERAL PAYROLL TAX DEPOSIT REQUIREMENTS

If the total accumulated tax reaches $100,000 or more on any day during a deposit period, you must deposit the tax by the next banking day, whether you were a monthly or semiweekly schedule depositor (See Note 2).

FUTA
For deposit purposes, figure FUTA tax quarterly. Deposit any amount due by the last day of the first month after the quarter ends. Determine whether you must deposit tax for any of the first 3 quarters in a year. Figure the total tax by multiplying by .008 that part of the first $7,000 of each employee's annual wages that you paid during the quarter. If this amount (plus any amount not yet deposited for any earlier quarter) is more than $500, deposit it during the first month after the quarter. But if it is $500 or less, you do not have to deposit it. Just add it to the amount for deposit the next quarter. If the tax reportable on Form 940,  minus amounts deposited for the year, is more than $500, deposit all of the tax by January 31. If your tax for the year (minus deposits) is $500 or less, you may either deposit it or pay it with Form 940 by January 31.

Making deposits with Federal Tax Deposit Coupon (Form 8109)

- Deposits of federal tax should generally be made at the commercial bank where you normally do your banking, using the Federal Tax Deposit Coupon (Form 8109). Indicate the type of tax and the tax period on the coupon and include such coupon with each deposit you make. Under certain circumstances, you must deposit your payroll taxes electronically as more fully described below.

- If you have reordered coupons and have not received them in time to make a deposit, or if you are a new employer and have already received your employer identification number but have not yet received your initial supply of deposit coupons, use Form 8109-B. This over-the-counter deposit coupon is available by calling 1-800-829-4933.

- If you have applied for an employer identification number (EIN) but have not received it, and a deposit must be made, make the deposit with your Internal Revenue Service Center. Make it payable to the “United States Treasury” and show on it your name (as shown on Form SS-4), address, kind of tax, period covered and date you applied for an EIN. Attach an explanation to the deposit.

- The timeliness of deposits will generally be determined by the date received by your commercial bank or Federal Reserve Bank.

Electronic Federal Tax Payment System (EFTPS) – You must make electronic deposits of all depository taxes (such as employment tax. excise tax, and corporate income tax) using the EFTPS in 2008 if the total deposits of such taxes in 2006 were more than $200,000 or you were required to use EFTPS in 2007. A 10% penalty may result if you do not use EFTPS when required. If you are not required to use EFTPS, you may participate voluntarily. For details, see 2008 Circular E, Employer’s Tax Guide.

NOTE 1:
For 2008, FUTA tax is 6.2% of the first $7,000 of wages paid to each employee during the calendar year. Generally, the employer may take a credit (up to 5.4%) against the FUTA tax if the employer paid tax to the state unemployment fund. Such credit makes a net FUTA rate of 0.8% (6.2% - 5.4%).

NOTE 2:
If a monthly depositor accumulates $100,000 tax on any day during a deposit period, it becomes a semiweekly depositor on next day and remains so for at least the remainder of the calendar year and for the following calendar year.

NOTE 3:
If you have more than one pay date during a semiweekly period, and the pay dates fall in different calendar quarters, you will need to make separate deposits for the separated liabilities.