WITHHOLDING TAX DEPOSIT AND FILING REQUIREMENTS
Overview Both the Internal Revenue Service and the Minnesota Department of Revenue require employers to deposit withheld tax on a periodic basis, and to file periodic returns. Deposit and filing requirements are discussed below. Employers should note that for purposes of determining the frequency of payment, federal and state withholdings are totaled separately. Deposit Requirements Annual Requirement (Federal only). Agricultural employers who accumulate less than $2,500 federal tax liability during the year may pay the tax and file the return annually. Annual Requirement (Minnesota only). Minnesota employers with $500 or less in Minnesota withholding tax in a year may be approved by the Department of Revenue to file on an annual basis. If during the year the Minnesota withholding tax exceeds $500, the employer is required to make a deposit at the end of the month following the month in which withholding tax exceeded $500. To make a deposit, the employer should use Minnesota Department of Revenue e-Services or use a payment voucher. Quarterly Requirement. Employers with federal deposit liability of less than $2,500 in the current quarter or state withholdings of $1,500 or less in the prior quarter must pay the entire amount to the Internal Revenue Service or Minnesota Department of Revenue quarterly. The payment is due the last day of the month following the end of the quarter. General Rule for Making Deposits (Minnesota). If an employer withholds more than $1,500 in Minnesota tax during the previous quarter, the employer is required to make Minnesota deposits in the next quarter as often as it is required to make federal deposits, either monthly or semiweekly. Monthly Requirement. New employers and employers whose total federal tax liability for the four quarters in the lookback period is $50,000 or less are required to deposit employment taxes each month by the fifteenth day of the following month. The lookback period is the four quarters beginning July 1 of the second preceding year and ending June 30 of the prior year. Employers should consult IRS Publication 15, Circular E , and the Minnesota Department of Revenue Income Tax Withholding Instruction Booklet and Tax Tables for specific rules and exceptions. Semi-weekly Requirement. Employers whose total tax liability for the lookback period is more than $50,000 are required to deposit employment taxes on Wednesday and/or Friday, according to their payroll day. Employers should consult IRS Publication 15, Circular E, Employer’s Tax Guide, and the Minnesota Department of Revenue Income Tax Withholding Instructions for specific rules.
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