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40.6302(c)-1 Deposits.
(a) In general—(1) Semimonthly deposits required. Except as provided by statute, or by paragraph (e) of this section, each person required under § 40.6011(a)-1(a)(2) to file a quarterly return must make a deposit of tax for each semimonthly period (as defined in § 40.0-1(c)) in which tax liability is incurred.
(2) Treatment of taxes imposed by chapter 33. For purposes of this part 40, tax imposed by chapter 33 (relating to communications and air transportation) is treated as a tax liability incurred during the semimonthly period—
(i) In which that tax is collected; or
(ii) In the case of the alternative method, in which that tax is considered as collected.
(3) Definition of net tax liability. Net tax liability means the tax liability for the specified period plus or minus any adjustments allowable in accordance with the instructions applicable to the form on which the return is made.
(4) Computation of net tax liability for a semimonthly period. The net tax liability for a semimonthly period may be computed by—
(i) Determining the net tax liability incurred during the semimonthly period; or
(ii) Dividing by two the net tax liability incurred during the calendar month that includes that semimonthly period, provided that this method of computation is used for all semimonthly periods in the calendar quarter.
(b) Amount of deposit—(1) In general. The deposit of tax for each semimonthly period must be not less than 95 percent of the amount of net tax liability incurred during the semimonthly period.
(2) Safe harbor rules—(i) Applicability. The safe harbor rules of this paragraph (b)(2) are applied separately to taxes deposited under the alternative method provided in § 40.6302(c)-3 (alternative method taxes) and to the other taxes for which deposits are required under this section (regular method taxes).
(ii) Regular method taxes. Any person that made a return of tax reporting regular method taxes for the second preceding calendar quarter (the look-back quarter) is considered to have complied with the requirement of this part 40 for deposit of regular method taxes for the current calendar quarter if—
(A) The deposit of regular method taxes for each semimonthly period in the current calendar quarter is not less than
1/6 of the net tax liability for regular method taxes reported for the look-back quarter;
(B) Each deposit is made on time;
(C) The amount of any underpayment of regular method taxes is paid by the due date of the return; and
(D) The person's liability does not include any regular method tax that was not imposed at all times during the look-back quarter or a tax on a chemical not subject to tax at all times during the look-back quarter.
(iii) Alternative method taxes. Any person that made a return of tax reporting alternative method taxes for the look-back quarter is considered to have complied with the requirement of this part 40 for deposit of alternative method taxes for the current calendar quarter if—
(A) The deposit of alternative method taxes for each semimonthly period in the current calendar quarter is not less than
1/6 of the net tax liability for alternative method taxes reported for the look-back quarter;
(B) Each deposit is made on time;
(C) The amount of any underpayment of alternative method taxes is paid by the due date of the return; and
(D) The person's liability does not include any alternative method tax that was not imposed at all times during the look-back quarter and the month preceding the look-back quarter.
(iv) Modification for tax rate increase. The safe harbor rules of this paragraph (b)(2) do not apply to regular method taxes or alternative method taxes for the first and second calendar quarters beginning on or after the effective date of an increase in the rate of any tax to which this part 40 applies unless the deposit of those taxes for each semimonthly period in the calendar quarter is not less than
1/6 of the tax liability the person would have had with respect to those taxes for the look-back quarter if the increased rate of tax had been in effect for the look-back quarter.
(v) Failure to comply with deposit requirements. If a person fails to make deposits as required under this part 40, the IRS may withdraw the person's right to use the safe harbor rules of this paragraph (b)(2).
(c) Time to deposit—(1) In general. The deposit of tax for any semimonthly period must be made by the 14th day of the following semimonthly period unless such day is a Saturday, Sunday, or legal holiday in the District of Columbia in which case the immediately preceding day which is not a Saturday, Sunday, or legal holiday in the District of Columbia is treated as the 14th day. Thus, generally, the deposit of tax for the first semimonthly period in a month is due by the 29th day of that month and the deposit of tax for the second semimonthly period in a month is due by the 14th day of the following month.
(2) Exceptions. See § 40.6302(c)-2 for the special rules for September. See § 40.6302(c)-3 for the special rules for deposits under the alternative method.
(d) Deposits required by electronic funds transfer. All deposits required by this part must be made by electronic funds transfer, as that term is defined in § 31.6302-1(h)(4) of this chapter.
(e) Exceptions—(1) Taxes excluded. No deposit is required in the case of the taxes imposed by—
(i) Section 4042 (relating to fuel used on inland waterways);
(ii) Section 4161 (relating to sport fishing equipment and bows and arrow components);
(iii) Section 4682(h) (relating to floor stocks tax on ozone-depleting chemicals);
(iv) Sections 4375 and 4376 (relating to fees on health insurance policies and self-insured insurance plans);
(v) Section 5000B (relating to indoor tanning services); and
(vi) Section 5000D (relating to the sale of designated drugs).
(2) One-time filings. No deposit is required in the case of any taxes reportable on a one-time filing (as defined in § 40.6011(a)-2(b)).
(3) De minimis exception. For any calendar quarter, no deposit is required if the net tax liability for the quarter does not exceed $2,500.
(f) Applicability dates—(1) Paragraphs (a) through (d). Paragraphs (a) through (d) of this section apply to deposits and payments made after March 31, 2013. For rules that apply before March 31, 2013, see 26 CFR part 40, revised as of April 1, 2013.
(2) Paragraph (e). Paragraph (e) of this section applies to calendar quarters beginning on or after October 1, 2023. For rules that apply before October 1, 2023, see 26 CFR part 40, revised as of April 1, 2024.
[T.D. 8963, 66 FR 41776, Aug. 9, 2001, as amended by T.D. 9486, 75 FR 33686, June 15, 2010; T.D. 9507, 75 FR 75903, Dec. 7, 2010; T.D. 9602, 77 FR 72728, Dec. 6, 2012; T.D. 9621, 78 FR 34846, June 11, 2013; T.D. 10003, 89 FR 55511, July 5, 2024]