Sandra Eve Kardos Payroll Update for 8-6-99

We are sending you this E-mail to keep you up to date on payroll issues

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We Thought you would find the information in todays IRS E-mail newsletter interestingly

Minimum Payroll deposits raised from $500 to $1000

JUNE 17 is  THE EFFECTIVE DATE of the final rules (T.D. 8822) which raised from $500 to $1000 the de minimus deposit rules for quarterly and annual employment tax returns.

IRS has also dropped the requirement for electronic funds transfer unless the liability exceeds your prior year liability exceeds $200,000 (Up from $50,000).

The rules apply to periods beginning on or after July 1, 1998 (for quarterly employment tax returns) and on or after January 1, 1999 (for annual employment tax returns). Under the final rules, taxpayers accumulating federal employment tax liabilities of less than $1000 for a return period do not have to make deposits but may remit their full liability with a timely-filed return for the return period.

IRS Still has in place the rule that if you exceed the $1000 per quarter it will penalize you  if you do not make the monthly deposits.

It is still going to be our recommendation that when you exceed $500 liability in a month to make a deposit to keep you from being caught in the penalty trap shown in the example below.

Futa deposits are still required if the liability exceeds $100 at the end of a quarter.

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