Final Answer:
The taxes from the off-cycle payment made on Monday must be deposited by the employer on the following Wednesday, as it falls within the timeline specified by the Internal Revenue Service (IRS).
Step-by-step explanation:
According to IRS regulations, employers are required to deposit federal income tax withheld, along with both the employer and employee portions of Social Security and Medicare taxes, in a timely manner. For off-cycle payments, the deposit deadline is influenced by the payday. In this case, the employer issued an off-cycle payment on Monday, so the deposit deadline is Wednesday. This aligns with the general rule that taxes on payments made on a Wednesday, Thursday, or Friday are due on the following Wednesday.
The tax liability on Friday amounted to $200,000.00. When the employer issued the off-cycle payment on Monday, the associated tax liability would include the federal income tax withheld, Social Security tax, and Medicare tax. Calculating the exact tax liability for the off-cycle payment involves considering the applicable tax rates and limits for each category. The deposit amount on Monday should cover these taxes, ensuring compliance with IRS requirements.
In summary, the employer is obligated to deposit the taxes from the off-cycle payment made on Monday by the subsequent Wednesday. This adherence to the IRS deposit schedule is crucial for maintaining tax compliance and avoiding potential penalties. The precise amount of the deposit is contingent on the total tax liability associated with the off-cycle payment, which includes federal income tax, Social Security tax, and Medicare tax.