Schedule B (Form 941): Report of Tax Liability for Semiweekly Schedule Depositors – 2014 Guide

What Schedule B (Form 941) 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 diary where you record exactly when you owed payroll taxes during the quarter, based on when you paid your employees—not when you deposited the money with the IRS.

This schedule tracks three types of employment taxes: federal income tax you withheld from employee paychecks, plus both the employee and employer portions of Social Security and Medicare taxes. The IRS uses Schedule B as a watchdog tool to verify whether you deposited your payroll taxes on time according to the semiweekly deposit schedule. Filing an incomplete or incorrect Schedule B can trigger an "averaged" failure-to-deposit penalty, even if you paid the full amount owed, so accuracy matters tremendously. IRS

The form consists of three monthly grids (one for each month of the quarter), with 31 numbered lines representing each day of the month. You enter your tax liability on the line corresponding to the actual pay date—the day wages were paid to employees, not the day you made your deposit.

When You’d Use Schedule B (Including Late and Amended Filings)

You must file Schedule B for the 2014 tax year if you fall into the semiweekly depositor category. This applies in two situations:

Regular Semiweekly Depositors

You reported more than $50,000 in total employment taxes during your "lookback period"—the 12-month period ending June 30, 2013 (for determining your 2014 status). Once you qualify as a semiweekly depositor, you remain in this category for the entire calendar year. IRS

The $100,000 Next-Day Rule

Even if you started the quarter as a monthly depositor, you instantly become a semiweekly depositor if your accumulated tax liability reaches $100,000 or more on any single day during 2014. This status change is permanent for at least the remainder of the calendar year and the entire following year. IRS

Important Exception

You don't need to file Schedule B if your total quarterly tax liability is less than $2,500, even if you're technically a semiweekly depositor.

Late Filing

Schedule B is due on the same date as your Form 941—the last day of the month following the end of the quarter (April 30, July 31, October 31, and January 31 for the preceding quarter). If you file Form 941 late, your Schedule B is also late.

Amended Filings

You can file an amended Schedule B after the deadline in specific circumstances:

If the IRS assessed a failure-to-deposit penalty and you made an error on the schedule
For monthly depositors incorrectly assessed a penalty, you can file Schedule B to correct monthly liability errors
When filing a late Form 941-X (correction return) for a tax increase, you must include an amended Schedule B or risk an "averaged" penalty
File amended schedules at the address shown on your penalty notice, not the regular filing address IRS

Key Rules or Details for 2014

Deposit Schedule Requirements

The semiweekly deposit schedule divides the week into two deposit periods. If you paid wages on Wednesday, Thursday, or Friday, you must deposit the taxes by the following Wednesday. If you paid wages on Saturday, Sunday, Monday, or Tuesday, you must deposit by the following Friday. These deadlines are strict and penalties apply for late deposits regardless of whether you eventually pay the full amount. IRS

The $100,000 Next-Day Emergency Rule

If your accumulated employment tax liability reaches $100,000 or more on any day, you must deposit the tax by the next banking day—no exceptions. This rule applies to all employers, regardless of your normal deposit schedule. Once triggered, you immediately become a semiweekly depositor for the rest of the calendar year and all of the next year. IRS

Critical Recording Rules

Record liabilities by the date wages were paid, not when deposits were made
If a payroll period ended in December 2013 but you paid employees on January 6, 2014, record the liability on line 6 of Month 1 (January) on your Q1 2014 Schedule B
Your total quarterly liability on Schedule B must exactly match line 10 of your Form 941
Never adjust Schedule B figures for corrections reported on Form 941-X or Form 944-X—those are separate processes IRS

Lookback Period for 2014

Your deposit schedule status for calendar year 2014 was determined by your total employment taxes reported during the lookback period (July 1, 2012, through June 30, 2013). If that amount exceeded $50,000, you're a semiweekly depositor for all of 2014.

Step-by-Step (High Level): How to Complete Schedule B

Step 1: Verify Your Status

Confirm you're required to file Schedule B by checking your employment tax total for the lookback period (July 2012–June 2013) or confirming you hit the $100,000 threshold on any day in 2013 or 2014.

Step 2: Enter Basic 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. Check the appropriate quarter box and enter 2014 as the calendar year.

Step 3: Record Tax Liabilities by Pay Date

Go through your payroll records for the quarter. For each date you actually paid wages (handed out paychecks or processed direct deposits), calculate your total tax liability for that day—federal income tax withheld plus employee and employer Social Security and Medicare taxes combined. Enter this amount on the numbered line corresponding to that date in the appropriate month grid.

Step 4: Calculate Monthly Totals

Add up all the daily entries for each month and write the totals in the "Tax liability for Month" boxes.

Step 5: Calculate Quarterly Total

Add the three monthly totals together and enter the result on the "Total liability for the quarter" line at the bottom. This figure must exactly match line 10 of your Form 941. If it doesn't match, review your entries for errors. IRS

Step 6: Attach to Form 941

Schedule B must be physically attached to your Form 941 (or Form 941-SS). It cannot be filed separately. Make sure you check the box in Part 2 of Form 941 indicating you're a semiweekly schedule depositor.

Common Mistakes and How to Avoid Them

Mistake #1: Recording Deposit Dates Instead of Pay Dates

Many employers mistakenly enter the dates they made deposits rather than the dates they paid employees. Schedule B requires pay dates—the actual dates wages were handed to employees or electronically transferred. The IRS uses this information to determine if your deposits were timely based on when the liability occurred.
How to avoid: Keep clear payroll records showing actual pay dates (not just payroll processing dates) and use only those dates when completing Schedule B.

Mistake #2: Adjusting for Prior Period Corrections

Some employers try to adjust Schedule B figures to account for corrections reported on Form 941-X. The instructions explicitly prohibit this—Schedule B should reflect only the tax liability as originally calculated for the quarter, without any adjustments. IRS
How to avoid: Complete Schedule B using original liability figures from your payroll records. If you need to correct errors from a previous quarter, handle those separately through Form 941-X.

Mistake #3: Mismatched Totals with Form 941

The total at the bottom of Schedule B must exactly match line 10 of Form 941. When these don't align, the IRS may reject your return or assess penalties.
How to avoid: Double-check your arithmetic. If totals don't match, review both forms for calculation errors or missing payroll dates.

Mistake #4: Filing Without Required Schedule B

Some semiweekly depositors incorrectly fill out the monthly schedule depositor section on Form 941 instead of attaching Schedule B. This is a serious error that can result in "averaged" failure-to-deposit penalties even if you paid all taxes owed.
How to avoid: If you're a semiweekly depositor or hit the $100,000 threshold at any point, you must attach Schedule B—there are no exceptions.

Mistake #5: Missing the $100,000 Next-Day Rule Impact

Employers sometimes don't realize that accumulating $100,000 or more on a single day immediately changes their depositor status, requiring Schedule B not just for that quarter but for the remainder of the year and the entire following year. IRS
How to avoid: If you hit the $100,000 threshold on any day in 2014, switch to filing Schedule B immediately and continue for all remaining 2014 quarters and all of 2015.

What Happens After You File

Immediate Processing

The IRS matches your Schedule B data against electronic deposit records transmitted by the Electronic Federal Tax Payment System (EFTPS) or your financial institution. The IRS doesn't rely on you to report deposits—they already have that information from the banking system.

Penalty Assessment Window

The IRS compares when your liabilities occurred (from Schedule B) against when deposits were actually made. If deposits were late based on the semiweekly schedule rules, the IRS calculates failure-to-deposit penalties:

2% penalty if deposits are 1-5 days late
5% penalty if deposits are 6-15 days late
10% penalty if deposits are 16+ days late or made directly to the IRS instead of through EFTPS
15% penalty if still unpaid more than 10 days after the first IRS notice IRS

Correspondence

If the IRS identifies discrepancies between your reported liabilities and deposit records, you'll receive a notice (often Notice CP207 or similar). This notice will detail any assessed penalties and provide instructions for response.

Audit Selection

Schedule B is a key document in employment tax audits. Significant discrepancies or patterns of late deposits can trigger broader examinations of your payroll records.

Penalty Abatement Opportunities

If you receive a penalty notice and believe it's incorrect due to Schedule B errors, you can file an amended Schedule B. For first-time penalty assessments, you may also qualify for first-time penalty abatement if you have a clean compliance history for the preceding three years.

The IRS typically processes returns and assesses any penalties within 6-8 weeks of filing, though complex cases may take longer.

FAQs

Q1: I'm a monthly depositor but had one unusually large payroll that reached $100,000. Do I need Schedule B for the entire year?

Yes. The moment you accumulate $100,000 or more in tax liability on any single day, you immediately become a semiweekly schedule depositor. This status applies for at least the remainder of the current calendar year and the entire following year. You must file Schedule B with all remaining quarterly Form 941s for 2014 and all four quarters of 2015. IRS

Q2: My quarterly total is $2,300. My accountant says I'm a semiweekly depositor based on last year's taxes. Do I still need Schedule B?

No. Even if you're classified as a semiweekly depositor, you don't need to file Schedule B if your total quarterly tax liability is less than $2,500. In this case, you can complete the monthly schedule depositor section on Form 941 instead. IRS

Q3: I made all my deposits on time but messed up Schedule B. Can I still get penalized?

Unfortunately, yes. The IRS may assess an "averaged" failure-to-deposit penalty if you don't properly complete and file Schedule B, even if you made all deposits correctly and on time. The form itself is a compliance requirement. However, if you receive a penalty notice, you can file an amended Schedule B to potentially reduce or eliminate the penalty if you can show the deposits were actually timely. IRS

Q4: What's the difference between the date I processed payroll and the date I should enter on Schedule B?

Schedule B requires the date employees were actually paid—when they received their paychecks or when direct deposits hit their accounts. This might be different from when you processed payroll in your accounting system. For example, if you process payroll on Thursday but pay employees on Friday, use Friday as the date on Schedule B.

Q5: I need to file Form 941-X to correct an error from last quarter. How does that affect my Schedule B?

It depends on timing. If you're filing Form 941-X on time (by the due date of the Form 941 for the quarter when you discovered the error), you generally don't need an amended Schedule B unless you were specifically assessed a failure-to-deposit penalty. However, if you're filing a late Form 941-X showing a tax increase, you must include an amended Schedule B or the IRS may assess an "averaged" penalty. The amended Schedule B must show the corrected total liability. IRS

Q6: Can I file Schedule B electronically in 2014?

Yes. Schedule B can be filed electronically as part of your e-filed Form 941 through IRS-approved e-file providers or payroll service companies. Electronic filing often reduces processing time and errors.

Q7: Where do I send an amended Schedule B if I need to correct a penalty?

File amended Schedule B forms at the specific address provided on your penalty notice from the IRS, not at the regular Form 941 filing address. Include "Amended" written at the top of the schedule and don't submit your original Schedule B again—only the corrected version. IRS

Additional Resources

This summary is for informational purposes based on 2014 IRS guidelines. Tax laws and requirements may change. Consult with a tax professional or the IRS for specific advice regarding your situation.