Schedule B (Form 941): Report of Tax Liability for Semiweekly Schedule Depositors – 2013 Guide

What Schedule B Is For

Schedule B (Form 941) is a supplemental form that certain employers must attach to their quarterly Form 941 tax return. Think of it as a detailed calendar showing exactly when you accumulated employment tax liabilities throughout the quarter—not when you deposited the money, but when you actually paid your employees.

This schedule tracks three types of taxes: federal income tax withheld from employee paychecks, Social Security taxes (both employer and employee portions), and Medicare taxes (both portions). The IRS uses Schedule B to verify that you deposited these taxes on time according to the semiweekly deposit schedule rules. If you fail to properly complete and file Schedule B, the IRS may assess an "averaged" failure-to-deposit penalty—essentially penalizing you as if your deposits were spread evenly throughout the quarter, which typically results in higher penalties than your actual deposit pattern might warrant. IRS.gov

When You’d Use Schedule B

Who Must File

You're required to file Schedule B if you're a "semiweekly schedule depositor." This designation applies to you if either: (1) you reported more than $50,000 in employment taxes during the four-quarter lookback period (July 1 of the second preceding calendar year through June 30 of the preceding year), or (2) you accumulated $100,000 or more in tax liability on any single day during the current or prior calendar year. Once you hit that $100,000 threshold on any day, you become a semiweekly depositor immediately—starting the very next day—and remain one for at least the rest of that calendar year plus the entire following year. IRS.gov

Important Exception

Do NOT file Schedule B if your total tax liability for the quarter was less than $2,500. In this case, you can pay when you file Form 941 instead of making deposits.

When to File

Schedule B is always filed with your quarterly Form 941, so it's due by the last day of the month following the end of each quarter (April 30 for Q1, July 31 for Q2, October 31 for Q3, and January 31 for Q4). If you deposited all taxes on time and in full, you get an extra 10 days to file.

Amended Schedule B

If you've been assessed a failure-to-deposit penalty and you made an error on Schedule B that doesn't change your total quarterly liability, you can file an amended Schedule B to potentially reduce your penalty. Write "Amended" at the top and file it at the address shown in your penalty notice—not with your original return. IRS.gov

Key Rules or Details for 2013

Tax Rates

For 2013, the Social Security employee tax rate increased back to 6.2% (from the temporary 4.2% rate in prior years), with the employer rate remaining at 6.2%, for a combined 12.4%. The Social Security wage base was $113,700—once an employee's wages reached this amount, you stopped withholding and paying Social Security tax on additional wages for that employee. Medicare tax remained at 1.45% each for employer and employee (2.9% combined) with no wage limit. IRS.gov

Additional Medicare Tax

New for 2013, employers had to withhold an additional 0.9% Medicare tax on wages exceeding $200,000 paid to any employee during the calendar year. This is employee-only—there's no employer match—and withholding begins the pay period you pay wages over $200,000. IRS.gov

Deposit Schedule Rules

Semiweekly depositors follow this pattern: if you paid wages on Wednesday, Thursday, or Friday, deposit by the following Wednesday; if you paid wages on Saturday, Sunday, Monday, or Tuesday, deposit by the following Friday. These deadlines refer to when you actually paid employees, not when the pay period ended. For example, if your pay period ended December 31, 2013, but you paid employees on January 6, 2014, you'd record the tax liability on January 6 (line 6 of Month 1 on Schedule B). IRS.gov

$100,000 Next-Day Rule

If you accumulate $100,000 or more in tax liability on any single day, you must deposit that amount by the next business day—regardless of your normal schedule. Once you reach $100,000, stop accumulating at the end of that day and start fresh the next day. IRS.gov

Step-by-Step (High Level)

Step 1: Enter Your Business Information

At the top of Schedule B, carefully enter your Employer Identification Number (EIN) and business name exactly as they appear on your Form 941. Any mismatch can cause processing delays.

Step 2: Check the Correct Quarter

Mark the appropriate box for the quarter you're reporting (1st, 2nd, 3rd, or 4th) and enter the calendar year. This must match what you've indicated on Form 941.

Step 3: Enter Tax Liabilities by Date

Schedule B divides the quarter into three months, with 31 numbered lines per month representing each calendar day. Enter your total tax liability (federal income tax withheld plus all Social Security and Medicare taxes—both employee and employer portions) on the line corresponding to the date you actually paid wages. Leave other days blank. For example, if you paid employees on the 5th and 19th of the first month, you'd only enter amounts on lines 5 and 19 of Month 1.

Critical Point: Enter liabilities based on when you paid wages, not when you made deposits. The IRS gets deposit information electronically from EFTPS (Electronic Federal Tax Payment System).

Step 4: Calculate Monthly Totals

Add up all the daily entries for each month and enter the total on the "Tax liability for Month" line at the bottom of each monthly section.

Step 5: Calculate Quarterly Total

Add the three monthly totals together. This "Total liability for the quarter" must exactly equal line 10 on your Form 941. If it doesn't match, you've made an error somewhere.

Step 6: Attach to Form 941

Staple Schedule B to your Form 941 in the upper left corner and file them together at the appropriate IRS address. IRS.gov

Common Mistakes and How to Avoid Them

Mistake #1: Entering Deposit Dates Instead of Payroll Dates

Many employers mistakenly enter the dates they made deposits rather than the dates they paid wages. Remember: Schedule B tracks when tax liability accrued (payday), not when you fulfilled that liability (deposit day). The IRS already knows your deposit dates from EFTPS.

Mistake #2: Mismatched Totals

If your Schedule B total doesn't match Form 941 line 10, the IRS will notice immediately. This happens when employers include adjustments from Form 941-X on their Schedule B. Don't do this—Schedule B should only reflect current quarter liabilities as originally reported, before any corrections. IRS.gov

Mistake #3: Filing Schedule B When Not Required

Monthly schedule depositors should use the monthly deposit schedule section on Form 941 itself (Part 2, line 16), not Schedule B. Only semiweekly depositors file Schedule B. Filing it unnecessarily can confuse the IRS processing system.

Mistake #4: Forgetting the $100,000 Trigger

Even if you started the year as a monthly depositor, accumulating $100,000 or more on any single day instantly converts you to a semiweekly depositor starting the next day. Many small employers forget to file Schedule B after hitting this threshold, exposing themselves to penalties.

Mistake #5: Not Checking the Right Quarter

A simple checkbox error—marking Q2 when you meant Q3—can cause your entire return to be processed incorrectly. Always double-check that the quarter marked on Schedule B matches Form 941.

What Happens After You File

Immediate Processing

The IRS scans your Schedule B into their system and matches it against your electronic deposit records from EFTPS. Their computers analyze whether you deposited the correct amounts on the correct dates according to the semiweekly schedule rules.

Penalty Assessment or Clearance

If your deposits were timely and accurate, you'll hear nothing—no news is good news. If the IRS finds discrepancies, you'll receive a notice (often a CP complaint notice) assessing failure-to-deposit penalties. These penalties vary based on how late deposits were: 2% if 1-5 days late, 5% if 6-15 days late, 10% if 16+ days late or within 10 days of receiving an IRS notice, and 15% for amounts still unpaid more than 10 days after the first IRS notice or the day before the IRS issues a levy.

Data Matching with Social Security Administration

The IRS also reconciles your four quarterly Forms 941 (including all attached Schedules B) with your annual Form W-3 and individual W-2s sent to the Social Security Administration. Discrepancies in Social Security wages, Medicare wages, tips, or federal income tax withholding can trigger additional inquiries from either agency. IRS.gov

Record Retention

Keep copies of Schedule B and supporting payroll records for at least four years. The IRS can audit employment tax returns for three years after filing (six years if there's a substantial understatement of tax), and you'll need these records to defend your deposit schedule and timing.

FAQs

Q1: I'm a new employer who just started business in 2013. Am I a monthly or semiweekly depositor?

New employers are automatically monthly schedule depositors for their first year because your lookback period tax liability is considered zero. However, if you accumulate $100,000 or more in tax liability on any single day, you immediately become a semiweekly depositor starting the next day and must file Schedule B. IRS.gov

Q2: What if my pay period ended in one quarter but I paid employees in the next quarter?

Report the tax liability in the quarter when you actually paid the wages, not when the pay period ended. For example, if your pay period ended December 31, 2013 (Q4), but you paid employees on January 3, 2014 (Q1), report the liability on your Q1 2014 Schedule B on line 3 of Month 1 (January). IRS.gov

Q3: Can I correct mistakes on Schedule B without filing an amended Form 941?

Yes, in certain situations. If you've been assessed a failure-to-deposit penalty and your Schedule B error doesn't change your total quarterly liability (you just recorded the liability on the wrong day), you can file an amended Schedule B to potentially reduce your penalty. Write "Amended" at the top and send it to the address in your penalty notice. However, if your total quarterly liability is wrong, you must file Form 941-X. IRS.gov

Q4: My payroll service makes deposits for me. Do I still need to file Schedule B?

Yes. Even if a third party handles your deposits, you as the employer remain legally responsible for filing Schedule B if you're a semiweekly depositor. You can enroll in EFTPS to monitor deposits made on your behalf and verify they're being made correctly and on time. Failure to file Schedule B—even if deposits were perfect—can result in penalties. IRS.gov

Q5: What's the "accuracy of deposits rule" and how does it help me?

The IRS requires you to deposit 100% of your tax liability by the due date, but recognizes perfection is difficult. Under the accuracy rule, you won't face penalties if: (1) your deposit shortfall doesn't exceed the greater of $100 or 2% of the required amount, AND (2) you make up the shortfall by the "makeup date"—generally, the earlier of the next required deposit date or your return due date. This provides a small margin of error for inadvertent calculation mistakes. IRS.gov

Q6: I had a $98,000 liability on Tuesday and a $10,000 liability on Wednesday. Do I need a next-day deposit?

No. The $100,000 next-day deposit rule applies to accumulation within a single deposit period. For semiweekly depositors, Tuesday ends one deposit period (Saturday–Tuesday) and Wednesday begins another (Wednesday–Friday). So you'd deposit $98,000 by Friday and $10,000 by the following Wednesday under normal semiweekly rules. However, if you had accumulated $100,000 on Tuesday alone, that would trigger next-day deposit for that amount. IRS.gov

Q7: My total taxes for the quarter were $2,400. Do I still file Schedule B?

No. If your total tax liability for either the current quarter or the preceding quarter was less than $2,500, you don't need to make deposits at all—you can pay the full amount when you file Form 941. In this case, don't file Schedule B even if you're technically a semiweekly depositor based on your lookback period. The small-liability exception overrides the normal deposit schedule requirements. IRS.gov

Sources

All information sourced from official IRS publications including Instructions for Form 941 (Rev. January 2013), Instructions for Schedule B Form 941 (Rev. January 2014), and Notice 931 (Rev. October 2013), available at IRS.gov.