CP136 – Reminder for Upcoming Employment Tax Deposits

What It Means:

The IRS sends a CP136 notice to notify a business that its federal tax deposit requirements are being modified for the next tax year. This is generally based on the information reported on Form 941 for the four (4) previous quarterly periods (lookback period) ending on June 30 of the previous year. Depending on the total tax reported for that period, their deposit schedule may change (monthly or semi-weekly).

Next Steps:

The first step is to review your CP136 notice and adjust your tax deposit schedule accordingly. If you use an outside payroll service, be sure to inform them of the changes, as well.

You should also:

• Verify the amounts listed on your CP136 line up with your records. If the figures do not match, you may need to revise your deposit schedule based on your numbers.
• Make sure your payroll personnel or outside providerfollows the new deposit schedule beginning January 1 of the new year.
• Set up reminders to avoid making late deposits.
• Submit all tax deposits electronically, as required by the IRS, unless you meet one of the following exceptions:
  • Your tax liability is less than $2,500, or
  • Your tax for the prior tax period was less than $2,500, and you did not have a $100,000 liability due the next day.
• Consult a tax professional if you’re unsure how to implement the required tax deposit changes.

It’s important to note that once your accumulated tax liability reaches $100,000, you’ll automatically become a semi-weekly depositor for the remainder of the current tax year and the following tax year.

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