What Is a Lookback Period Form 941 and Form 944

For more information on the IRS lookback period, check out Publication 15. Depending on how you filed in the past, you might have to look at your Form 944 for that year, or all four quarters of Form 941 for that year. There are two convenient ways that a business can
file electronically or e-file. Then, interest is charged on the total
of unpaid tax and the penalty. There are also deposit penalties for making late
deposits and for not depositing the proper amount. Form 941 may also be signed by a duly authorized agent
of the taxpayer if a valid power of attorney
has been filed.

Karen can file Form 941-X to make corrections to the second quarter’s report in 2022. However, the business must use the original amount reported in the lookback period. As a result, the business remains a monthly depositor instead of changing to a semiweekly depositor.

Two subsequent bills, the Consolidated Appropriations Act (CAA) of 2021 and the American Rescue Plan Act (ARPA), amended and extended these and other provisions. The Infrastructure Investment and Jobs Act ended the ERC for most employers after September 30, 2021, instead of after December 31, 2021. These changes resulted in multiple revisions of Form 941 to add line items for reporting purposes and subsequently remove them after some provisions expired. For example, the deferral of Social Security tax payments provision under the CARES Act is no longer a line item on the draft 2022 Form 941 because that provision expired.

Have records of all tips,
this will be added to the wages and other compensation paid. Also it’s important to note if you have more than one pay
date during a semiweekly period,
and the pay dates fall in different calendar quarters,
you’ll need to make separate deposits
for the separate liabilities. This allows you to report tax liabilities corresponding
to the dates when wages were paid. Again,
use the Schedule B to report the tax
liability and not the deposits.

Under the monthly deposit schedule, deposit employment taxes on payments made during a month by the 15th day of the following month. An employer is a semiweekly schedule depositor if they reported more than $50,000 in taxes during the lookback period. However, during the coronavirus (COVID-19) pandemic, the IRS revised Form 941 multiple times. This happened first in 2020 when the Families First Coronavirus Relief Act (FFCRA) and Coronavirus Aid, Relief, and Economic Security (CARES) Act were signed into law that March. The FFCRA added paid leave for COVID-19 related reasons and an employer credit related to this paid leave. The CARES Act added the Employee Retention Credit (ERC), another employer tax credit for certain businesses affected by COVID-19, as well as other payroll-related items.

For details on the $100,000 Next-Day Deposit Rule, see Chapter 11 of Publication 15. Federal law requires employers to withhold certain taxes from the pay of employees. As mentioned, this includes federal income tax, Social Security tax, Medicare tax, and Additional Medicare tax (on wages in excess of $200,000).

Federal Income Tax Withholding, Social Security, and Medicare Tax Deposits

If you will file Form 944 for the current year, or if you filed it in either of the previous two years, your lookback period is the second preceding calendar year. Payroll software can help you with all the details and can make the deposits for you by connecting with your payroll account. Monthly deposits must be made by the 15th day of the month following the month when you paid employees.

• Monthly depositors must deposit their employment taxes collected and contributed during a month by the 15th day of the following month.
• In this workshop we discussed the basics of making tax
  deposits and filing a return to report payroll taxes.
• You must use electronic fund transfer to make all
  federal tax deposits.

In this workshop we discussed the basics of making tax
deposits and filing a return to report payroll taxes. Also you’ll need to report the amount of withheld
income taxes and this means all income taxes
withheld from your employees including tax
withheld from tips, taxable fringe benefits,
and certain other payments. You must use electronic fund transfer to make all
federal tax deposits. As a monthly depositor you deposit monthly
payroll taxes by the 15th day of the following month.

What’s Your Deposit Schedule for 2023? Look At Your Lookback Period for Forms 941 and 944

You can purchase an IRS approved software to submit
the forms yourself,
or hire an IRS authorized provider. There are options for filing Form 941 and in fact
most forms with the IRS. Employers can submit the correction as soon
as they discover an error,
and in the case of an overpayment, select
to apply the overage to the next quarter or request a refund,
as long as the statute of limitations remains open. Even though you may pay throughout the quarter,
you only file Form 941 once at the end of the quarter.

See the Instructions for Form 941 (Page 8) for a list of these addresses. You must make payroll tax deposits by electronic funds transfer (EFT). Most businesses use the IRS Electronic Federal Tax Payment System (EFTPS). Specifically we talked about due dates for tax
deposits and penalties,
how to determine if you are a monthly or  
semiweekly depositor,
and making deposits electronically.

What line items are on Form 941?

As an employer, you’re generally required to deposit the employment taxes reported on Forms 941, Employer’s QUARTERLY Federal Tax Return or Form 944, Employer’s ANNUAL Federal Tax Return. Both forms report federal income tax withheld from your employees, along with the employer’s and employees’ shares of social security and Medicare tax. The amount of employment taxes you reported on your Forms 941 or 944 determines which deposit schedule you must use, monthly or semiweekly. The terms “monthly schedule depositor” and “semiweekly schedule depositor” don’t refer to how often your business pays its employees or even how often you’re required to make deposits. Rather, the terms identify which set of deposit rules you must follow when an employment tax liability arises.

You’ll need to know the number of employees,
total wages paid, include tips reported,
taxable fringe benefits provided,
and other forms of compensation paid to the employees. If the due date for filing a return falls on a Saturday, Sunday, or legal holiday, then you may file the return on the next business day. If you don’t want to use EFTPS, you may be able to work with your financial institution, your payroll service, or another trusted service to make your payroll tax deposits. If you are a new employer and had no employees
during the lookback period,
or if all your taxes total $50,000
or less for the period, you are a monthly depositor.

• If a deposit is required to be made on a day
  that is not a business day,
  make the deposit by the close of the next business day.
• Now let’s look at the payroll reporting requirements
  for the majority of small businesses by taking
  a closer look at Form 941.
• You must use the Electronic Federal Tax Payment System (EFTPS) to make all federal tax deposits.
• Another alternative is to call the EFTPS Help Desk on the phone to make the payments.
• The IRS uses the term “employment taxes” to mean federal income taxes, FICA taxes, and federal unemployment (FUTA) taxes.
• Generally, employers must report wages, tips and other compensation paid to an employee by filing the required Form 941, Employer’s QUARTERLY Federal Tax Return.

Let’s say Karen of Karen’s Pet Supply wants to know whether she’s a monthly or semiweekly depositor in 2023. When taxes are withheld, they must be deposited to the IRS according to their requirements. When you make a deposit of those taxes, you are making a federal tax deposit. This amount includes any sick pay and taxable fringe
benefits subject to Social Security, Medicare,
and additional Medicare taxes.

Additional Information

Before the beginning of the next calendar year, make sure you examine your lookback period. If you make a correction, the adjustments don’t affect the amount of tax liability for previous periods. If payday falls on a Wednesday, Thursday, and/or Friday, deposit taxes by the following Wednesday. If payday falls on a Saturday, Sunday, Monday, and/or Tuesday, deposit taxes by the following Friday.

Do not include your contributions to employee plans
that are excluded from the employee’s wages such
as 401k and cafeteria plans. Go to
and enter those terms in the search box to find
more information. But don’t forget that the money you hold for your
employees is not yours to spend. Legal holidays in the District of Columbia are provided
in IRS Publication 15, Employer’s Tax Guide.

Form 944, Employer’s Annual Federal Tax Return, is a form that employers use to report employee wages and taxes annually. As an employer, you either report employee wages and payroll taxes on Form 941 or 944. Having payroll software or a payroll service doesn’t give you a pass on knowing your tax responsibilities with the IRS.

Forms & Instructions

The IRS warns that employers should not use an earlier revision of Form 941 to report taxes for the 2022 tax year. Employers must use the March 2022 Form 941 version only to report taxes for the quarter ending March 31, 2022. As an employer, one of your biggest responsibilities is to withhold taxes from your employees’ wages.

Employers are also required to pay any liability for the employer portion of Social Security and Medicare tax. For Social Security tax, the rate is 6.2% for each up to the annual taxable wage base ($147,000 in 2022). You can get Form 8109 through the IRS website or from your nearest tax office. But since this form accompanies a physical deposit of your federal payroll taxes (like a check), and applies only to companies meeting the small business exception, you may never have used one. You must use the Electronic Federal Tax Payment System (EFTPS) to make all federal tax deposits.

If it is $500 or less for the fourth quarter, then you can make a deposit or pay the tax with your Form 940 by January 31. The employer may arrange for a trusted third-party tax professional, payroll service, bookkeeper, etc., to make the EFTPS deposits on their behalf. Another alternative is to call the EFTPS Help Desk on the phone to make the payments. You cannot pay your liabilities based on a previous deposit schedule or how often you pay your employees.