The Form 941 Lookback period is which dates prior to the calendar year for determining deposit status?

The Form 941 Lookback period is essential for employers to determine their required frequency of federal tax deposits, based on their payroll tax liabilities from a previous year. The correct choice, which refers to the period from July 1 to June 30, identifies the timeframe during which employers should assess their total payroll taxes.

This lookback period covers a full year prior to the calendar year in which they are currently operating. For instance, if an employer is looking to determine their deposit status for the calendar year 2024, they would examine their payroll tax liabilities from July 1, 2022, to June 30, 2023. If the total payroll tax liability during this period is below a certain threshold, they may qualify as a monthly deposit schedule, while a higher liability would require a semi-weekly deposit schedule.

Understanding the correct lookback period is crucial for compliance with IRS deposit requirements, ultimately affecting cash flow management and penalties for late deposits.