TaxBandits Knowledge Base

What are the federal tax payment responsibilities?

Employers must deposit unemployment tax, Social Security, Medicare, and federal income taxes to the IRS and state income tax withholding and unemployment tax to the respective state agencies. If you fail to deposit on time, it may result in costly penalties. 

Info: TaxBandits offers some special pricing to pay your federal and state taxes on time to the IRS on your behalf.

Federal Tax Payments
IRS requires employers to deposit the withheld taxes accurately and on time. Here are the taxes to be deposited.

• FICA: The Federal Insurance Contribution Act is a combination of both Social Security and Medicare taxes, and it's important for both employers and employees to contribute equally to the IRS.
  • Social Security Tax: The Social Security tax rate for 2025 is 6.2% for each, which is, in total, 12.4%. The wage base limit for Social Security tax is $176,100.
  • Medicare Tax: The Medicare tax rate is 1.45% for each, which is a total of 2.9%. There is no wage base limit for Medicare taxes. Employees must pay 0.9% additional medicare taxes if they earn over the threshold of $200,000(for individuals) and $250,000(for married couples filing together).

FICA tax rates for 2025

Note: Based on your tax liability, your deposit schedule might vary. To learn more about the deposit schedule, click here.

• FUTA: The Federal Unemployment Tax Act(FUTA) is to provide benefits for the unemployed who have lost their job. Employers who pay more than $1,500 in any calendar quarter or have at least one or more employees for some more different weeks are required to pay FUTA tax. This tax is 6% of the first $7,000 for each employee’s annual wages.

Conditions for FUTA Tax Payments:

FUTA taxes must be deposited based on the following conditions:

• Tax liability exceeds $500: You must remit the FUTA taxes by the last day of the month following the end of the quarter.

• Tax liability less than $500: If the FUTA tax liability is less than $500 in a quarter, it will be carried forward to the next quarter.

Note: If the total FUTA tax liability is less than $500 throughout the year, it must be paid by January 31.