Federal Deposit Frequency Change to Semi-Weekly CP136
In this article
The CP136 notice is related to a change in your Federal 941 Tax Deposit frequency requirements (i.e., when tax payments are due -- monthly, semi-weekly or next-day). Generally, new employers are required to deposit 941 taxes to the IRS on a monthly schedule. However, this will change if an employer's prior 941 tax liability exceeds $50,000 in a "look-back" period.
Semi-weekly Deposit Frequency: If your payroll was dated February 1st, the 941 taxes for that payroll would be due by February 8th.
Monthly Deposit Frequency: Taxes for payroll dated February 1st would not be due until March 15th.
Payroll Frequency vs. Deposit Frequency
Don't be confused; tax deposit frequency is different from the frequency you pay your employees (payroll frequency). You can continue to run payroll once a month.
What Do I Need to Do?
If you're a
client of ASAP, please
share a copy with us so that we may update your company's deposit requirements. But no worries if you don't notify us; there is a good chance we have already adjusted your deposit schedules as we monitor your liability requirements automatically based on the data on-hand to ensure compliance.
Rule of Thumb
The more money you owe, the faster the IRS and state would like you to pay.
Example: The four-quarter look-back period for 2017 would reference the 941 liabilities accrued between July 1, 2015 - June 30, 2016.
Deposit requirements typically only change at the start of a calendar year. However, if you have accumulated more than $100,000 in 941 liabilities, then you would be required to pay those taxes the next day. If such an event were to occur, your frequency going forward would also change to that of a semi-weekly depositor regardless of the time of year.
State Tax Frequency
Colorado and many other states follows a similar look-back period concept in terms of an employer's requirements to deposit CO withholding taxes weekly, monthly or quarterly.