What Is a Federal Tax Deposit?

As an employer, it’s your responsibility to withhold taxes from your employees’ wages and deposit the taxes to the IRS according to their requirements. The taxes withheld from employee wages include federal income, unemployment, Social Security, and Medicare taxes. This obligation is also known as the federal tax deposit obligation.

The employee’s tax deposit obligation is specified in the Federal Insurance Contributions Act (FICA) and varies based on salary. Employers are responsible for total payroll tax liability, which must be reported quarterly on IRS Form 941.

Federal tax deposits can be made electronically through various online options: the Electronic Federal Tax Payment System (EFTPS), credit or debit card payments, same-day wire payments, or (for small businesses) via the IRS website’s Payroll Tax Forms and Publications page.

Employers on a monthly schedule must make deposits by the 15th of every month, while those on a semi-weekly schedule have 2-3 days from the day they make payroll. Due dates can vary, so it’s best to check your specific schedule and due dates with your accountant or the IRS.

The federal tax deposit coupon (IRS Form 8109) is no longer widely used, and employers generally submit their deposits electronically.