Depositing Withholding and Payroll Taxes

In general, you must deposit federal income tax withheld and both the employer and employee social security and Medicare taxes plus or minus any prior period adjustments to your tax liability (minus any advance EIC payments) by mailing or delivering a check, money order, or cash to a financial institution that is an authorized depositary for federal taxes.

Some banks operate under a state charter and may not be authorized to accept federal tax deposits.

Your deposit must be made with a FTD coupon, Form 8109. You should write in the amount of your payment and darken the boxes on Form 8109 for the type of return (941) and the quarter. It is very important to clearly mark the correct type of tax and tax period on each FTD coupon. This information is used by the IRS to credit your account. Make your check or money order payable to your bank.

For new employers, if you would like to receive a Federal Tax Deposit (FTD) coupon booklet, call 1-800-829-4933. Allow 5 to 6 weeks for delivery. The IRS will keep track of the number of FTD coupons that you use and automatically will send you additional coupons when you need them. If you do not receive your resupply of FTD coupons, call 1-800-829-4933.

You can have the FTD coupon books sent to a tax preparer that is making your deposits by showing that address on Form 8109-C, FTD Address Change, which is in the FTD coupon book. The FTD coupons will be preprinted with your name, address, and EIN. They have entry boxes for indicating the type of tax and the tax period for which the deposit is made. If you prefer, you may mail your coupon and payment to: Financial Agent, Federal Tax Deposit Processing, P.O. Box 970030, St. Louis, MO 63197. Make your check or money order payable to Financial Agent. Note however that you are responsible for mailing your payment so that the IRS receives your payment by the payment due date.

Depositing without an EIN. If you have applied for an EIN but have not received it and you must make a deposit, make the deposit with the IRS. Do not make the deposit at an authorized depositary. 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. Send your deposit with an explanation to your local IRS office or the service center where you will file Form 941. The service center addresses are in the Instructions for Form 941 and are also available on the IRS website at www.irs.gov. Do not use Form 8109-B, Federal Tax Deposit Coupon, in this situation.

If you have an EIN but do not have a preprinted Form 8109, you may use Form 8109-B to make deposits. Form 8109-B is an over-the-counter FTD coupon that is not preprinted with your identifying information. You may get this form by calling 1-800-829-4933. Be sure to have your EIN ready when you call. You will not be able to obtain Form 8109-B by calling 1-800-TAX-FORM.

Some taxpayers are required to deposit their 941 taxes using the 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 Electronic Federal Tax Payment System (EFTPS) in 2005 if:

• Your total deposits of such taxes in 2003 were more than $200,000 or
• You were required to use EFTPS in 2004.

If you are required to use EFTPS and fail to do so, you may be subject to a 10% penalty. For deposits made by EFTPS to be on time, you must initiate the transaction at least one business day before the date that the deposit is due. For your records an Electronic Funds Transfer (EFT) Trace Number will be provided with each successful payment that can be used as a receipt or to trace the payment.

EFTPS is a free service provided by the Department of Treasury. If you are not required to use EFTPS, you may participate voluntarily. To get more information or to enroll in EFTPS, call 1-800-555-4477 or 1-800-945-8400. You can also visit the EFTPS website

Please refer to the most current version of IRS Publication 15 for additional information.