Equity compensation is often paid or vests at a time other than the regular payroll date. IRS payroll deposit rules may require tax deposit dates for these “off-cycle” payments that are earlier than regularly scheduled payroll deposit dates; as a result, companies may miss the deadlines.
Read an August 2020 report [PDF 91 KB] that describes the complexity of the deposit timing rules, cautions that employers could potentially face penalties if deadlines are missed, and lays out some ideas designed to comply with the rules and avoid these pitfalls: What’s News in Tax: Deposits of Federal Employment Taxes for Equity Related Transactions—Pitfalls to Avoid
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