The IRS uses two different sets of deposit rules to determine when a particular business must deposit their Social Security, Medicare, and Federal income taxes withheld. An Employers deposit schedule is not determined by how often that employer pays their employees. A "deposit schedule"' depends on the total tax liability an employer has reported on Form 941 during the previous four-quarter lookback period (July 1 of the second preceding calendar year through June 30 of last year).

Before the beginning of each calendar year, the employer must determine which type of deposit schedule that need to be used. If that employer reported:

1. $50,000 or less in taxes during the lookback period:
In this situation, then that employer must use a monthly schedule depositor. That employer must check the appropriate box on line 17 and, if the payroll tax liability for the quarter was $2,500 or more, then that employer must fill out the tax liability for each month in the quarter.

2. More than $50,000 of taxes for the lookback period:
In this situation, then that employer is a semiweekly schedule depositor. That employer must check the appropriate box on line 17 and, if the payroll tax liability for the quarter was $2,500 or more, then that employer must fill out Schedule B (Form 941) and attach it to Form 941 when the payroll tax return is submitted.

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