Business FinancesQuestion 505 of 690
Under IRS rules, when does a contractor's payroll tax liability require deposits by electronic funds transfer (EFTPS) rather than by check?
a.Once the business has more than 10 employees
b.Only when the contractor is a corporation
c.When aggregate annual federal tax deposits exceed $200,000
d.Whenever the contractor is paid by the federal government
Explanation
IRS regulations require electronic deposit through EFTPS for businesses with more than $200,000 in aggregate annual federal tax deposits in a prior year. Once required, EFTPS use continues even if amounts later drop below the threshold.
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