What is a $100,000 next-day deposit obligation?
92 views | Last modified 7/16/2020 4:42:44 AM EST

Applicable To
94X 1099 W-2 ACA W-4

When you accumulate a tax amount equal to $100,000 or above on any day of the deposit period, you have to deposit the corresponding tax amount on the next business day regardless of your deposit schedule.  If you have accumulated taxes of $100,000 or above at least once in the deposit period, you naturally become a semiweekly depositor for the rest of the calendar year and the following calendar year.

It is also advisable not to accumulate the tax liability after the deposit period ends. Consider the below example to understand better.

Example 1:

Star LLC is a monthly schedule depositor, and as per their schedule, they have to deposit the tax before 15th of the following month. In February, they accumulated the taxes of $25,000 and paid the taxes by March 15. On March 1, they aggregated the taxes of $123,000. Since they have acquired the tax above $100,000, they are liable to deposit the tax by the next day, March 2, according to the $100,000 next-day deposit rule. Also, they become a semiweekly schedule depositor for the rest of the calendar year.

Example 2:

Consider that Mat LLC is a semiweekly schedule depositor who has accumulated the tax liability of $125,000 on Monday. According to the $100,000 next-day deposit rule, they should deposit this tax amount by the next day, Tuesday. They again accumulate the tax of $15,000 on Tuesday. As per the semiweekly schedule, they can deposit it by Friday since it does not exceed $100,000.

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