Final answer:
A semiweekly depositor must make a shortfall make-up deposit by the close of the next banking day if the shortfall is less than $100,000. If the shortfall is $100,000 or more, the deposit must be made by the next banking day. These rules are in place to ensure compliance with IRS payroll tax deposit requirements and to satisfy reserve ratio needs.
Step-by-step explanation:
For semiweekly depositors, the rules surrounding when to make a shortfall make-up deposit are associated with the Internal Revenue Service's (IRS) payroll tax deposit requirements. If a semiweekly depositor accrues a shortfall, which essentially is the inadequate payment of employment taxes for that period, the shortfall must be rectified within a specified timeframe. The deposit schedule is determined by the total tax liability reported on the employer's quarterly tax returns.
According to the IRS, when a shortfall occurs, a semiweekly depositor has until the close of the next banking day to make the necessary make-up deposit if the shortfall is less than $100,000. However, if the shortfall exceeds $100,000, the deposit must be made by the next banking day to avoid penalties. This requirement is to ensure that the money needed to meet the reserve ratios is available and to maintain the tax compliance of the business.