Failure to Deposit Penalty

 

IRS Definition

The Internal Revenue Code provides for the Failure to Deposit (FTD) penalty if a taxpayer does not deposit tax in the correct amount, within the prescribed time period, and/or in the required manner.

More from H&R Block

The IRS sends each business with employees a letter explaining its federal tax deposit schedule, so the business knows how frequently it is required to make its federal tax deposits. This letter also explains that all deposits must be made electronically. If the business fails to make its deposits as scheduled, in the correct amount or in the manner required, the IRS will charge a federal tax deposit penalty.

The penalty rates are: 2% for 1-5 days late; 5% for 6-15 days late; 10% for deposits made more than 15 days late.

Failure to make the deposit electronically is 10% and the penalty is 15% if the amount remains unpaid more than 10 days after the first notice requesting payment.

Discover ways to deal with an IRS penalty.

Get help from an IRS expert

H&R Block’s experts can solve any IRS problem, no matter how complex.

Make an appointment

Or call 855-536-6504

Related Information

Private: How to Address IRS Business Tax Penalties

Understand the most common types of IRS business tax penalties for filing and paying late, and your possible options for requesting IRS penalty relief.

Private: What To Do If You Can’t Pay Your Business Taxes

Learn how to request an IRS payment option, like an extension to pay or an IRS installment agreement, when your business owes taxes and can't pay.

Power of Attorney: It’s How Your Tax Pro Deals with the IRS For You

Learn the three main benefits of engaging a power of attorney to research your IRS account and resolve your tax problems. Get the facts from the experts at H&R Block.