Schedule B (Form 941) Report of Tax Liability for Semiweekly Schedule Depositors – 2022 Guide

What the Form Is For

Schedule B (Form 941) is a detailed daily tax liability report that semiweekly schedule depositors must attach to their quarterly Form 941 (Employer's Quarterly Federal Tax Return). Think of it as your "payroll tax diary" that shows the IRS exactly when you accumulated employment tax liabilities throughout the quarter—not when you made deposits, but when you actually paid wages to employees.

This form reports three types of taxes combined: federal income tax withheld from employee paychecks, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes. The IRS uses Schedule B to verify whether you deposited your employment taxes on time according to semiweekly deposit rules, which helps them determine if failure-to-deposit (FTD) penalties should apply. IRS.gov

You're required to file Schedule B if you're classified as a semiweekly schedule depositor—meaning you reported more than $50,000 of employment taxes during the "lookback period" (July 1, 2020, through June 30, 2021, for the 2022 tax year), or if you accumulated $100,000 or more in tax liability on any single day during 2021 or 2022. Even if you only became a semiweekly depositor partway through a quarter, you must complete Schedule B for the entire quarter. IRS.gov

When You’d Use Schedule B (Late/Amended Filing)

Amended Schedule B to reduce penalties

If you've already been assessed a failure-to-deposit penalty and you discover an error on your original Schedule B—such as reporting tax liability on the wrong date—you can file an amended Schedule B to potentially reduce or eliminate the penalty. For example, if you mistakenly reported a $3,000 liability on day 1 of Month 1 when it actually belonged on day 1 of Month 3, you'd prepare an amended Schedule B showing the corrected dates. Write "Amended" at the top and mail it to the address shown on your penalty notice. IRS.gov

Filing with Form 941-X

If you're filing Form 941-X (the correction form for 941) and you have a tax decrease and were assessed an FTD penalty, you can include an amended Schedule B. If you're filing a late Form 941-X showing a tax increase, you must attach an amended Schedule B; otherwise, the IRS may assess an "averaged" FTD penalty, which assumes your deposits were spread evenly throughout the quarter and can be more expensive than the actual penalty you deserve.

Monthly depositors correcting errors

Interestingly, monthly schedule depositors who were assessed FTD penalties can also file Schedule B for the first time as a correction tool. In this case, you only need to enter monthly totals rather than daily entries. IRS.gov

Key Rules for 2022

The matching rule

Your total liability for the quarter on Schedule B must exactly equal line 12 on Form 941. This is non-negotiable. If these numbers don't match, the IRS will flag your return for review and may propose penalties.

Date by wages paid, not deposits

Enter your tax liability on the dates you paid wages, not when you made deposits or when the payroll period ended. For example, if your payroll period ended June 30, 2022, but you paid wages on July 2, 2022, you'd report that liability on line 2 of Month 1 (July).

Nonrefundable credits reduce liability

If you claimed nonrefundable credits on Form 941 (such as the qualified small business payroll tax credit for increasing research activities on line 11a, or the credit for qualified sick and family leave wages on lines 11b and 11d), you must reduce your daily tax liabilities on Schedule B accordingly. Apply these credits starting with the first payroll of the quarter and work forward through subsequent paydays until the credit is exhausted. Never reduce a daily liability below zero. IRS.gov

COVID-19 credits in 2022

For 2022, employers could still claim the nonrefundable portion of credits for qualified sick and family leave wages paid in 2022 for leave taken during specific earlier periods (after March 31, 2020, and before April 1, 2021, or after March 31, 2021, and before October 1, 2021). These credits had to be factored into Schedule B calculations.

$2,500 exemption

You don't need to complete Schedule B if your total tax liability on Form 941, line 12, is less than $2,500 for the quarter, even if you're technically a semiweekly depositor.

Semiweekly deposit deadlines

For context, semiweekly depositors must deposit taxes by the following Wednesday for wages paid Wednesday through Friday, and by the following Friday for wages paid Saturday through Tuesday. These deposits must be made electronically through the Electronic Federal Tax Payment System (EFTPS). IRS.gov

Step-by-Step (High Level)

Step 1 – Gather your payroll records

Before starting, collect all payroll records for the quarter showing the exact dates you paid wages and the total employment tax liability for each payday (federal income tax withheld plus both employee and employer shares of Social Security and Medicare taxes).

Step 2 – Enter identifying information

At the top of Schedule B, enter your Employer Identification Number (EIN) and business name exactly as they appear on your Form 941. Select the calendar year and check the box for the appropriate quarter (first, second, third, or fourth).

Step 3 – Report daily liabilities by month

Schedule B is divided into three monthly sections, each with 31 numbered lines representing calendar days. For each date you paid wages, enter the total tax liability on the corresponding line. If you pay employees on the 15th of each month, you'd enter your liability on line 15 in each monthly section. If you didn't pay wages on a particular day, leave that line blank.

Step 4 – Apply nonrefundable credits

If you claimed any nonrefundable credits on Form 941 lines 11a, 11b, or 11d, reduce your reported liability starting with the first payday of the quarter. Subtract the credit amount from your first payday's liability (but don't go below zero), then apply any remaining credit to the second payday, and continue until the credit is exhausted.

Step 5 – Calculate monthly and quarterly totals

Add up all entries for Month 1, then Month 2, then Month 3. Enter each month's total on the designated line. Finally, add the three monthly totals to get your "Total Liability for the Quarter."

Step 6 – Verify the match

Compare your Total Liability for the Quarter from Schedule B with line 12 on your Form 941. These must be identical. If they don't match, review your entries carefully to find the discrepancy before filing.

Step 7 – Attach to Form 941

File Schedule B as an attachment to Form 941. Mail both forms together to the IRS address specified in the Form 941 instructions, or file electronically if using an approved e-file provider. IRS.gov

Common Mistakes and How to Avoid Them

Mistake 1 – Using deposit dates instead of pay dates

The most frequent error is entering tax liabilities on the dates deposits were made rather than when wages were paid. Remember: Schedule B tracks when you incurred the liability (payday), not when you fulfilled it (deposit day). Solution: Create a simple chart showing each payday and its corresponding tax amount before starting Schedule B.

Mistake 2 – Total doesn't match Form 941, line 12

Arithmetic errors or forgetting to include certain paydays can cause your Schedule B total to differ from Form 941. The IRS will reject returns with mismatches. Solution: Double-check your addition using a calculator or spreadsheet, and cross-reference all paydates from your payroll software.

Mistake 3 – Failing to account for nonrefundable credits

If you claimed credits on Form 941 lines 11a, 11b, or 11d but didn't reduce your Schedule B liabilities accordingly, your Schedule B total will exceed line 12, causing a mismatch. Solution: Apply credits systematically starting with the first payday, and document which paydays received credit reductions.

Mistake 4 – Incomplete filing for partial-quarter semiweekly status

If you became a semiweekly depositor midway through the quarter (by hitting the $100,000 next-day deposit threshold), you must still complete Schedule B for the entire quarter, including days when you were a monthly depositor. Solution: Review your deposit status at the beginning of each quarter and prepare accordingly.

Mistake 5 – Wrong quarter or year checked

Simple box-checking errors can cause processing delays. Solution: Always verify the quarter and year boxes match your Form 941 before submitting.

Mistake 6 – Missing Schedule B entirely

Semiweekly depositors who fail to attach Schedule B may face "averaged" FTD penalties, which assume poor deposit timing and can be costlier than actual penalties. Solution: Mark your tax calendar to remind yourself that semiweekly status requires Schedule B attachment. IRS.gov

What Happens After You File

IRS processing and verification

The IRS receives deposit information automatically through the Electronic Federal Tax Payment System (EFTPS), so they already know when and how much you deposited. Schedule B provides the missing piece—when you should have deposited based on when wages were paid. IRS computers compare your Schedule B dates and amounts against your actual deposit dates to determine if you met the semiweekly deposit deadlines (Wednesday for Wed-Fri paydays, Friday for Sat-Tue paydays).

Penalty assessment or approval

If your deposits were timely according to Schedule B, your return is processed normally with no FTD penalties. If Schedule B reveals late deposits, the IRS calculates failure-to-deposit penalties (2% for deposits 1-5 days late, 5% for 6-15 days late, 10% for 16+ days late, and 10% for amounts deposited more than 10 days after receiving an IRS notice). You'll receive a notice explaining any penalties assessed. IRS.gov

Processing timeframe

Electronically filed Forms 941 typically process within 21 days, while paper returns can take 6-8 weeks or longer during busy periods. You won't receive a confirmation unless there's a problem, you're due a refund, or penalties are assessed.

Refunds or additional payments

If line 15 of Form 941 shows you overpaid (your deposits exceeded your liability), the IRS will either issue a refund or apply the overpayment to your next quarter, depending on your selection. If you underpaid, you'll receive a bill with interest and potentially penalties.

Audit selection

Schedule B helps the IRS identify businesses for employment tax audits. Patterns of late deposits, frequent amendments, or mismatches between Forms 941 and W-2s may trigger examination.

Record retention

Keep your Schedule B, Form 941, deposit records, and payroll records for at least four years. The IRS recommends retaining these records even longer if possible, as employment tax issues can surface during audits of later years. IRS.gov

FAQs

1. What's the difference between monthly and semiweekly depositors for 2022?

Monthly depositors reported $50,000 or less in employment taxes during the lookback period (July 1, 2020–June 30, 2021) and deposit taxes once monthly by the 15th of the following month. They complete the monthly liability section on Form 941 itself. Semiweekly depositors reported more than $50,000 during the lookback period and must deposit within three business days of payday following a Wednesday-Friday or Saturday-Tuesday schedule. They must file Schedule B with daily detail instead of the monthly section. IRS.gov

2. What if I became a semiweekly depositor mid-quarter in 2022 due to the $100,000 rule?

If you accumulated $100,000 or more in tax liability on any single day, you immediately became a semiweekly depositor starting the next day, regardless of your lookback period status. You must complete Schedule B for the entire quarter, including the portion when you were a monthly depositor, and you remain a semiweekly depositor for at least the remainder of the calendar year. IRS.gov

3. Can I file Schedule B electronically?

Yes, Schedule B can be filed electronically along with Form 941 through IRS-approved e-file providers. Many payroll software systems handle this automatically. Electronic filing is faster and reduces errors compared to paper filing.

4. What if I discover an error on Schedule B after filing?

If the error doesn't change your total quarterly liability, you can file an amended Schedule B (write "Amended" at the top) to correct the dates and potentially reduce FTD penalties. If the error changes your total liability, you must file Form 941-X along with an amended Schedule B. IRS.gov

5. Do I include refundable credits when calculating Schedule B liabilities?

No. Schedule B should reflect your gross tax liability before refundable credits. Only nonrefundable credits (Form 941 lines 11a, 11b, 11d) reduce your Schedule B liabilities. Refundable credits appear on Form 941 but don't affect Schedule B calculations. IRS.gov

6. What happens if I forget to attach Schedule B?

The IRS may assess an "averaged" FTD penalty, which assumes your tax liability was spread evenly across the quarter and that you deposited monthly rather than semiweekly. This often results in higher penalties than you'd face with proper Schedule B documentation. If this happens, file Schedule B immediately and request penalty reconsideration. IRS.gov

7. How do I handle a pay period that straddles two quarters?

Report the liability on the date you actually paid wages, not the payroll period ending date. If your payroll period ended June 30 (end of Q2) but you paid wages on July 2 (beginning of Q3), report that liability on your Q3 Schedule B, not Q2. IRS.gov

Sources: All information in this guide comes from official IRS publications, including the Instructions for Schedule B (Form 941) (Rev. June 2022), About Form 941, and Topic No. 757 (Deposit Requirements).