Federal Tax Deposits (FTD)

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Federal Tax Deposits (FTDs) are required payments from employers to the Internal Revenue Service (IRS) for employee tax withholdings specified in the Federal Insurance Contributions Act (FICA). The IRS requires monthly or semi-weekly payments depending on the size of the employer of employee tax withholdings through the Electronic Funds Tax Payment Service (EFTPS). This ensures that the withholdings by employers actually get paid to the IRS and are not lost due to a business bankruptcy or other financial issue. If late on payments, the employer could face fees of 15% or more on the withholding tax. 

[Last updated in June of 2021 by the Wex Definitions Team]