Status is set once a year
Under 26 CFR 31.6302-1(b), a contractor's deposit schedule for the whole calendar year is fixed at the start of the year from the employment taxes it reported during its lookback period.
For Form 941 filers, the lookback period is the twelve months ending the preceding June 30 (26 CFR 31.6302-1(b)(4)). For 2026, that is July 1, 2024 through June 30, 2025.
Traps:
- Using calendar year 2025 instead of July-to-June is a listed common error.
- Calendar year 2024 (the second calendar year before) is the rule for Form 944 filers, not Form 941 filers.
The $50,000 line
- $50,000 or less in the lookback period: monthly depositor for the entire year, under (b)(2)(i).
- More than $50,000: semiweekly depositor, under (b)(3).
Exactly $50,000 is monthly; treating it as semiweekly is a listed common error. The test uses the whole twelve-month total, not any single quarter.
Adding up the right quarters
Example: a Form 941 filer reported $12,000 (Jul–Sep 2024), $14,000 (Oct–Dec 2024), $13,500 (Jan–Mar 2025), $11,000 (Apr–Jun 2025), $12,000 (Jul–Sep 2025) and $11,500 (Oct–Dec 2025).
- Lookback for 2026: 12,000 + 14,000 + 13,500 + 11,000 = $50,500, over $50,000, so semiweekly.
- Calendar 2025 totals $48,000, but that is the wrong period.
- All six quarters ($74,000) reaches semiweekly for the wrong reason.
The $100,000 one-day rule overrides status
If $100,000 or more accumulates on any single day, the tax must be deposited by the close of the next day (26 CFR 31.6302-1(c)(3)). A monthly depositor that triggers this immediately becomes a semiweekly depositor for the rest of the calendar year and all of the following year under (b)(2)(ii).
So $105,000 accumulated on a Tuesday in March 2026 is due by the close of Wednesday, and the contractor is semiweekly for the rest of 2026 and all of 2027. Switching for the rest of 2026 only is a listed common error.