Semi weekly depositor (payroll)

[ILLMAS]

I have a client that received a notice, I don’t prepare their payroll but at first the notice didn’t make sense but I am wondering if this caused the problem. Employees are supposed to get paid every Friday and payroll is prepared on Tuesday or Wednesday, I am thinking the person preparing the payroll is using either Tuesday or Wednesday date as the check date and not Friday, or sometimes they run payroll checks outside the payroll cycle.  Your thoughts?  

[RitaB]

I think IRS is sending a lot of incorrect letters.  But, it is very common that people don't know that the date of the liability is the date of the payroll checks.  

 

 

[DANRVAN]

35 minutes ago, ILLMAS said:

Tuesday or Wednesday date as the check date and not Friday

The penalty is calculated on the date the liability is reported on 941 vs the date of the deposit. 

Since they are semi weekly, a Wednesday payroll liability is due the same day as a Friday payroll, which is the following Wednesday, so that won't make any difference.

You need a copy of schedule B to figure out what is going on. 

[DANRVAN]

36 minutes ago, RitaB said:

I think IRS is sending a lot of incorrect letters

I have seen a few.

[ILLMAS]

I prepare their 941's and I do see in the month of December 2020, 12-25-20 (Friday) payroll was paid on 12-23-20, one darn payroll caused this mess.

[DANRVAN]

On 3/22/2021 at 8:42 AM, ILLMAS said:

12-25-20 (Friday) payroll was paid on 12-23-20,

But for a semi weekly depositor, the Wednesday and Friday liability would both be on the following Wednesday, so I don't see an issue here.