The Small Business Owner’s (or Employer’s) January 2021 Compliance Calendar

Gusto Editors

When it comes to tax and benefits compliance there’s a lot to cover in January 2021, but not to worry! Take a deep breath; you are ON IT. And we’ll help you stay on top of these deadlines so you can file the right forms on time to avoid penalties or unnecessary fees.

Ongoing deadlines from January 1 – January 31

Employment tax deposits (for semi-weekly depositors) 

Are you a semi-weekly depositor? If so, you must adhere to this schedule when it comes to depositing employment taxes:

If payday for your employees is on . . . Deposit employment taxes by . . .
Wednesday The following Wednesday
Saturday The following Friday

Don’t know what a semi-weekly depositor is? If you report more than $50,000 in taxes during the lookback period, you’re required to deposit employment taxes on a semi-weekly basis. 

Wait! But, what’s the lookback period? This is a 12-month period that always ends on June 30 of the previous year (this means that for 2021, the lookback period is July 1, 2019 through June 20, 2020). 

Quarterly taxes

Fourth quarter tax returns for 2020 are due to state and local authorities; check your local government websites to find out when the deadline is in your state. 

January 1

New Year’s Day

Happy new year! 

Health benefit notices

If you offer certain health benefit plans (like QSEHRA, CHIP, WCRA, COBRA, HIPAA special enrollment, Newborns’ & Mothers’ Health Protection), you are required to distribute notices to your employees when the plans start or renew (this timing typically—but not always—aligns with the calendar year). 

(We’ve got a QSEHRA notice template all ready for you here.) 

Non-discrimination testing

If you offer certain benefits, you must perform non-discrimination testing (NDT) to ensure that highly compensated employees aren’t being given unfair advantages over their lower-compensated colleagues. HRAs and plans that include FSAs are often subject to NDT. 

January 1st is the deadline for NDT for plans governed by Section 125 (POP), also known as cafeteria plans, or Section 105 (including HRAs).   

Section 125 (POP) documents

Those who offer Section 125 (POP)/cafeteria plans must have all documentation in place by the first of the year. 

January 15

Payroll tax deposits (for monthly depositors) 

Are you a monthly depositor? If you reported less than $50,000 in taxes during the lookback period, then you are a monthly schedule depositor. Typically, you will have to deposit employment tax payments on or before the 15th of the next month.

Estimated taxes

Estimated tax payments are due four times a year, and the final 2020 estimated payment is due on January 15, 2021 by 8 p.m. eastern time.

January 31, 2021

First thing’s first: In 2021, January 31 falls on a Sunday. That means that none of the items below are officially due on the 31st. When an IRS deadline falls on a Sunday, it automatically shifts to the next business day; so technically, you can wait until Monday, February 1, 2021 to file these forms, but—hey, it’s always good to be a step ahead.  

Form W-2

This form must be filed by employers with certain state and local taxing authorities. A W-2 also must be filed with the Social Security Administration (make sure that you report the health care value on this form—including health insurance, QSEHRA, and HRA values).

January 31 is also the deadline to provide a copy of Form W-2 to your employees. 

Get all the details about Form W-2 here.  

Form W-3

Even if you have just one employee, it’s imperative that you file this form with the Social Security Administration by this date.

Understand everything you need to know about W-3 forms here

Form 1099-NEC

1099 forms will look really different in 2021; certain items that would have been recorded on a 1099-MISC form in 2020 must be recorded on a 1099-NEC form in 2021 (the IRS likes to keep things interesting). To avoid penalties, make sure you’re clear on the differences between these forms. 

Here is everything you need to know about Form 1099-NEC and Form 1099-MISC.

By January 31, you should file the 1099-NEC with the IRS, with state and local authorities (check your state’s website), and provide copies to any independent contractors you have worked with. 

Form 940

You report annual FUTA tax on Form 940; file this with the IRS by February 1. 

Form 941

Form 941 is the employer’s quarterly federal tax return; it reports how much money was withheld from employees’ paychecks within the quarter. File this form with the IRS.

Form 943

If you have agricultural employees (like farm workers) on your payroll and their Social Security wages are subject to Medicare or Social Security taxes, you must submit Form 943 to the IRS. 

Form 944

Form 944 is only for smaller employers whose annual tax liability is less than $1,000 for:

  • Social Security
  • Medicare
  • Withheld federal income tax

If that describes your business, you must submit Form 944 to the IRS annually. 

Form 945

Use Form 945 to report income tax that is withheld from non-payroll payments, like 401(k)s or gambling winnings. This form is due to the IRS on January 31, 2021.

Form 1096

If you submit forms to the IRS electronically, you can scratch this one off your list; this form is only for those who submit paper copies to the IRS and contains details about other forms you’ve filed. 

Gusto Editors Gusto Editors, contributing authors on Gusto, provide actionable tips and expert advice on HR and payroll for successful business management.
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