Question

The shortfall rule allows an employer to deposit what percentage of their payroll tax liability without a penalty?

A. Must be 100%
B. 98%
C. 95%
D. 90%

Answer 1

The shortfall rule allows employers to deposit 98% of their payroll tax liability without incurring a penalty.

Step-by-step explanation:

The question pertains to an employer's ability to deposit a certain percentage of their payroll tax liability without incurring a penalty, a concept known as the shortfall rule. The correct answer is B, which means an employer can deposit less than 100% of their payroll tax liability. Specifically, an employer may deposit 98% of their total payroll tax liability and still comply with the shortfall rule, avoiding any penalties.