One-Day Requirement (Federal only). Employers who accumulate taxes of $100,000 or more on any day during a deposit period are required to make the deposit by the close of the next banking day, whether they are a monthly or semi-weekly depositor. Personal Liability for Payment of Employment Taxes. To encourage prompt payment of withheld income and employment taxes, including Social Security taxes, railroad retirement taxes, or collected excise taxes, Congress passed a law that provides for the TFRP (Trust Fund Recovery Penalty). These taxes are called trust fund taxes because you actually hold the employee’s money in trust until you make a federal tax deposit in that amount. In the event that an employer fails to pay its employment taxes, its individual officers, members, directors, owners or others, who are responsible for collecting or paying withheld income and employment taxes and willfully fail to collect or pay them may be held personally liable for unpaid taxes. See the IRS information Employment Taxes and the Trust Fund Recovery Penalty (TFRP). Electronic Federal Tax Payment System (EFTPS). The EFTPS is the system sponsored by the U.S. Department of Treasury that taxpayers use to initiate Federal tax payments electronically. As of January 1, 2011, all required Federal Tax Deposits must be made electronically using EFTPS. For more information or to enroll in EFTPS or call the EFTPS Customer Service Center at 800-555- 4477, or 800-733-4829 (TDD hearing-impaired), or 800-244-4829 (Español). Electronic State Deposits. State tax deposits must be made electronically if state tax withholdings total more than $10,000 in Minnesota income tax during the last 12-month period ending June 30, if they use a payroll service company, or they are required to electronically pay any other Minnesota business tax to the Minnesota Department of Revenue. If you are required to pay business taxes electronically for one year, you must continue to do so for all future years. For more information see the Minnesota Income Tax Withholding Instruction Booklet and Tax Tables. Filing Requirements Quarterly Withholding Tax Return. Each quarter, all employers (except annual filers) must file federal Form 941, Employer’s Quarterly Federal Tax Return with the Internal Revenue Service. In addition, all employers (except Minnesota annual filers) must file a Minnesota Quarterly Tax Withholding Return for each quarter. These returns must be filed electronically via Minnesota Department of Revenue e-Services. W-2 filing. Federal Form W-3, Transmittal of Income and Tax Statements, must be filed annually with the federal copies of each employee’s Form W-2 to the Social Security Administration. The federal Form W-3 of the W-2 must be filed no later than January 31 in the year following the taxable year, or within 30 days of going out of business. The state copies of each employee’s Form W-2 and 1099s that show Minnesota withholding must be filed with the Minnesota Department of Revenue. For requirements regarding the filing of Forms W-2 and 1099 see Withholding Tax Fact Sheet #2 Submitting Form W-2 and W-2c Information and #2a Submitting Form 1099 Information at Withholding Tax Fact Sheets. The federal Form W-3 and the state copies of the W-2 must be filed no later than January 31 in the year following the taxable year, or within 30 days of going out of business.
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