When Are 4th Quarter Payroll Taxes Due?
Navigate the essential deadlines for your year-end payroll taxes to ensure compliance and avoid penalties. Understand federal and state requirements.
Navigate the essential deadlines for your year-end payroll taxes to ensure compliance and avoid penalties. Understand federal and state requirements.
Businesses employing staff must manage payroll taxes, which are withheld from employee wages and often matched by the employer. Accurate calculation, timely deposit, and proper reporting of these taxes are necessary to avoid penalties and maintain compliance. Understanding fourth quarter due dates and requirements is important for financial management.
Payroll taxes include federal income tax withholding, Social Security, and Medicare taxes (FICA taxes). Employers withhold federal income tax from employee paychecks. Social Security and Medicare taxes are shared, with both employee and employer contributing.
For 2024, the Social Security tax rate is 6.2% for both employee and employer, applied to wages up to $168,600. The Medicare tax rate is 1.45% for both parties, applied to all wages without a limit. An additional Medicare tax of 0.9% applies to wages exceeding $200,000 for individual filers, which employers must withhold, though there is no employer match for this additional amount.
The Federal Unemployment Tax Act (FUTA) tax is another component, paid by employers. The FUTA tax rate is 6.0% on the first $7,000 of each employee’s wages. Employers typically receive a credit of up to 5.4% for timely state unemployment tax payments, reducing the effective FUTA rate to 0.6%. The fourth quarter for payroll taxes covers wages paid from October 1 through December 31.
The federal quarterly filing deadline for the fourth quarter’s Form 941, Employer’s Quarterly Federal Tax Return, is January 31 of the following year. This form reports federal income tax withheld, Social Security, and Medicare taxes for the quarter. If January 31 falls on a weekend or legal holiday, the due date shifts to the next business day.
Federal payroll tax deposits follow either a monthly or semi-weekly schedule, based on the business’s total tax liability during a lookback period. Monthly depositors, who reported $50,000 or less in taxes during the lookback period, must deposit taxes for wages paid in October, November, and December by November 15, December 15, and January 15, respectively. If the 15th falls on a weekend or holiday, the deposit is due on the next business day.
Semi-weekly depositors, with over $50,000 in tax liability during the lookback period, follow a different schedule. For paydays on Wednesday, Thursday, or Friday, deposits are due by the following Wednesday. For paydays on Saturday, Sunday, Monday, or Tuesday, deposits are due by the following Friday. If accumulated taxes reach $100,000 or more on any single day, the funds must be deposited by the next business day.
Beyond federal obligations, businesses must also manage state and potentially local payroll tax requirements. These often include state income tax withholding and state unemployment insurance (SUTA). Due dates and reporting specifics vary considerably across jurisdictions.
Each state establishes its own tax rates, wage bases, and filing frequencies for state income tax withholding and unemployment insurance. Businesses should consult their state’s revenue department or unemployment agency websites for precise guidance. Many states also have local tax ordinances, which can add another layer of complexity to payroll tax compliance.
Federal payroll tax deposits are primarily made through the Electronic Federal Tax Payment System (EFTPS). This system allows businesses to schedule payments securely and efficiently. To use EFTPS, a business must enroll and receive a Personal Identification Number (PIN) and Internet password.
Form 941 for the fourth quarter can be filed electronically through authorized IRS e-file providers, which offers faster processing and confirmation of receipt. Alternatively, businesses can print and mail a paper Form 941 to the IRS, though this method may take longer to process. Businesses should use the correct mailing address provided in the Form 941 instructions.
Failing to meet payroll tax obligations can result in penalties imposed by the IRS. A failure to deposit penalty applies if taxes are not deposited on time, correctly, or for the correct amount. This penalty ranges from 2% to 15% of the unpaid amount, depending on the number of days the deposit is late. For instance, a deposit 1 to 5 days late incurs a 2% penalty, while one more than 15 days late can result in a 10% penalty.
Separate penalties apply for failure to file Form 941 and failure to pay the tax reported on it. The failure to file penalty is 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid taxes. The failure to pay penalty is 0.5% of the unpaid taxes for each month or part of a month the tax remains unpaid, also capped at 25%. The IRS may also charge interest on underpayments, which accrues from the due date until the tax is paid in full. Businesses receive a notice from the IRS detailing any assessed penalties and interest.