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Pay your federal tax liability when it's over $100,000

SOLVED•by QuickBooks•52•Updated January 12, 2024

Learn what to do when a federal tax liability exceeds $100,000.

When any single payroll (or a combination of payrolls within an assigned deposit period) has a federal tax liability amount of $100,000 or more, the $100,000 Next-Day Deposit Rule applies. This means the tax must be paid by the next banking day. It's important to make this payment on time. The IRS penalty for a late next-day tax deposit is automatically 10% of your 941 taxes due.

Note: Per IRS, your tax payments will be due on a semi-weekly schedule for the remainder of the year and the following year. 

Select your payroll service below to find out when to send your payroll, or how to make the tax payment.

Note: Not sure which payroll service you have? Here's how to find your payroll service.

The answer depends on if QuickBooks Payroll makes the payment for you, or you pay your taxes yourself. If you aren't sure, check your automatic tax payments and form filing status.

If QuickBooks makes your tax payments for you (either automatically, or you use e-pay)

You'll need to send your payroll to us at least two banking days before your paycheck date. Then we can make the payment on time with the IRS. If you use next-day or same-day direct deposit, this means you may need to adjust your paycheck date to a later date, or send your payroll to us sooner.

If you miss this cutoff, you can pay the IRS directly the next banking day for the payment to be on time. Then, contact us for help with the pending payment and entering your direct payment in QuickBooks.

If you make your own tax payments, or your tax setup isn't complete in QuickBooks

You can send your payroll as normal, but you'll need to pay the IRS directly the next banking day for the payment to be on time.

You'll need to send your payroll to us at least two banking days before your paycheck date. Then we can send the payment on time. If you use next-day direct deposit, this means you may need to adjust your paycheck date, or send your payroll to us sooner.

If payroll is not sent by 5 pm PST, at least two business days before the check date, the IRS debit will be late. And you will be assessed a penalty amounting to at least 10% of the tax liability.

The remaining state taxes, along with federal unemployment, are recorded on the QuickBooks Desktop Payroll Service liability check. This is a separate debit to your company's bank account.

When you exceed the $100,000 threshold, make the payment directly to the IRS. Don't use the QuickBooks Desktop E-pay service. You may need to make a next-day tax payment directly to your state too (CA, NY, OR, SC, AZ).

  1. Select I understand on the prompt that appears when you send your payroll.
  2. Go to the EFTPS website.
  3. Select Make Payment. Then log in. You can use the same login you use in QuickBooks E-pay.
  4. Follow the instructions provided.
  5. Create a liability check in QuickBooks Desktop to record the payment. Then assign EFTPS to the check number.

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