Update a tax deposit schedule (state or federal)

If you need to change your state deposit schedule, learn how here.

Based on your historical tax payments, the IRS will assign your company a deposit schedule for tax payments (either semi-weekly or monthly) and they'll assign a specific payroll tax return to file–either Form 941 or Form 944.

How it works in Gusto

IRS deposit schedules

We'll default to depositing on the faster semi-weekly schedule in order to prevent late tax payments, penalties, and tax delinquency notices.

• Important: If you specifically instructed us to deposit using the monthly schedule, you must contact us from the Help section of your account if the IRS changes your schedule to semi-weekly. If not done immediately, there may be penalties and interest assessed for late tax deposits–these would be the employer's responsibility to pay.

IRS filing form (941 or 944)

In order to prevent late filings, we will file the quarterly Form 941 for:

• Existing customers
• New customers that run payroll with us in the first quarter (Q1) of each year

If you joined us after Q1, confirm which form the IRS assigned and set up your customer account using the IRS-assigned form requirement. 

The following year, we'll automatically file a Form 941 and you'll no longer need to confirm the requirement each year.

Update your federal filing form in your customer profile (to 941 or 944 if joining after April 1 in the current year)

1. Click the Taxes & compliance section and select Tax setup.
2. Under "Federal Tax Setup", click edit. 
3. Click Schedule a future change.
   • Note: If you don't see the option to schedule a future change, contact us from the Help section of your customer account. 
4. Select the Effective Date of the new filing form. 
5. Enter the future filing form change you have received on your IRS notice. 
6. Click Save. 

Additional detail about Form 944

The IRS allows certain small businesses to file annually on Form 944 instead of quarterly on Form 941. While this may seem like a benefit for small employers, the IRS may change your filing requirement mid-year which could result in notices and penalties if returns are late.

Filing more frequently (on Form 941) is a way to prevent that from happening, and it costs the same no matter how frequently we file (quarterly or annually).

At the end of the year, state agencies may issue new deposit schedules for the upcoming year, which would require your company to deposit more or less frequently than in prior years depending on your tax liabilities in prior year(s).

If you receive an updated deposit schedule, enter it into your Gusto account using the following steps. You can also follow these steps to review the schedules you've had in your account historically.  

If you don't see an option to update your schedule in Gusto, please send the notice to Gusto to confirm that you're set up correctly.  

1. Click the Taxes & compliance section and select Tax setup.
2. Click Manage Taxes under the applicable State Tax section.
3. Scroll to State Tax Settings and click edit next to Deposit Schedule.
   • If the ability to edit a deposit schedule does not exist, this means Gusto is handling the selection automatically.
     • We do this when we're depositing all taxes on the fastest tax deposit schedule—this prevents late tax deposits (available for select agencies only).
     • If for any reason you believe Gusto is not depositing taxes on time, you can let us know from the Help section of your account. 
4. Select to Add a new schedule—this is also where you can view past schedules you've had in your account.
5. Enter the schedule shown on the notice.    
6. Set the Effective Date to the effective date listed on your notice— typically it's the beginning of the current year (January 1). On rare occasion, it may be the beginning of another quarter (April 1, July 1, October 1).
   • Note: If you're making this update after the deadline listed on the notice, you will be responsible for any penalties the agency applies to your account.
7. Click Save.

If you've entered the wrong deposit schedule, please update this in your Gusto account as soon as possible by selecting Make a correction instead of Add a new schedule. The option to update your schedule will only be available in states where you currently have active employees. 

State or local withholding tax deposit schedule notice

This notice is to inform you of a change to your withholding tax deposit schedule and the day it will become effective—usually listed at the top.  

For example: a notice might say “We determined your new deposit schedule for the new tax year."

Issuing agency

State or local tax agency responsible for collecting withholding income tax.

Action required

Determine the new withholding tax deposit frequency (e.g. semi-weekly, monthly, quarterly) and update it in your Gusto account.

Update a state or local tax deposit schedule in Gusto

1. Click the Taxes & compliance section and select Tax setup.
2. Click Manage Taxes under the applicable state tax section.
3. Click Edit next to “Deposit Schedule / Company Filing Status” under the State Tax Settings headline.
   • If you don't see the option to edit your deposit schedule, it means your schedule matches the federal deposit schedule or Gusto uses a default schedule for all customers in that state and no action is needed.
4. If the effective date is in the future or in the current quarter, select Add a new setting. If the effective date on the notice is from a previous quarter, click Make a correction.
5. Set the Effective Date to the date listed on your notice, typically the beginning of a year or quarter (i.e. January 1, April 1, July 1, October 1).
   • Important: If your tax deposit frequency is increasing (e.g. monthly to semi-weekly) and you make this change after the effective date on the notice, there may be penalties or interest assessed for late tax payments which you’ll need to pay directly to the agency.
6. Click Save.

IRS withholding tax deposit schedule notice

Gusto defaults to depositing on the faster semi-weekly schedule in order to prevent late tax payments, penalties, and tax delinquency notices. Unless you've specifically asked Gusto to make your payments monthly, no action is needed.

If you specifically asked Gusto to deposit using the monthly schedule, you must contact us from the Help section of your account if the IRS changes your schedule to semi-weekly. If not done immediately, there may be penalties and interest assessed for late tax deposits–these would be the employer's responsibility to pay.