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Handle federal payroll tax liability payments over $100,000

by Intuit•18• Updated 1 month ago

When a single payroll or a combination of payrolls within a deposit period has a federal tax liability amount of $100,000 or more, the $100,000 Next-Day Deposit Rule applies. You must pay this tax by the next banking day to ensure the payment is on time. 

Important: The IRS automatically assesses a penalty of 10% of your 941 taxes due for late next-day deposits.  Per the IRS, your tax payments will follow a semi-weekly schedule for the remainder of the current year and the following year. 

Select your payroll service below to find out when to send your payroll, or how to make the tax payment.

Note: Not sure which payroll service you have? Here's how to find your payroll service.

The answer depends on if QuickBooks Payroll makes the payment for you or you manage them yourself. Check your automatic tax payments and form filing status if you're unsure.

Automatic tax payments (auto-pay or e-pay)

If QuickBooks makes your tax payments for you or you e-pay: 

  • Send payroll early: Send your payroll to us at least two banking days before your paycheck date. Then we can make the payment to the IRS on time. 
  • Adjust pay date: If you use next-day or same-day direct deposit, you may need to change your paycheck date to a later date or send your payroll sooner
  • Missed cutoff: If you miss the two-day cutoff, you can pay the IRS directly on the next banking day to ensure the payment is on time. Contact us for help with the pending payment and to enter your direct payment into QuickBooks. 

Manual tax payments

If you make your own tax payments or your tax setup is incomplete:

  1. Send your payroll as normal.
  2. Pay the  IRS directly  by the next banking day to avoid penalties.
  • Send payroll early: Send your payroll to us by 5 PM PT at least two banking days before your paycheck date.  This ensures the payment is sent on time.
  • Adjust pay date: If you use next-day direct deposit, you may need to adjust your paycheck date or send your payroll sooner.
  • Penalties: If payroll isn’t sent by the cutoff, the IRS debit will be late, and you’ll be assessed a penalty of at least 10% of the tax liability.
  • Remaining taxes: Remaining state taxes and federal unemployment are recorded on the QuickBooks Desktop Payroll Service liability check.  This is a separate debit to your company’s bank account.

When you exceed the $100,000 threshold, make the payment directly to the IRS. Don't use the QuickBooks Desktop E-pay service.

Note: You may also need to make a next-day tax payment directly to your state (CA, NY, OR, SC, AZ).

  1. Select I understand on the prompt that appears when you send your payroll.
  2. Go to the EFTPS website.
  3. Select Make Payment. Then log in. You can use the same login you use in QuickBooks E-pay.
  4. Follow the instructions provided.
  5. Create a liability check in QuickBooks Desktop to record the payment.
  6. Assign EFTPS to the check number.
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