Do state and local government employers follow the same tax deposit schedule as private employers?

State and local government employers do not follow the same tax deposit schedule as private employers. This difference arises because government entities may have distinct regulations and procedures established by federal and state laws governing tax collection and remittance.

Private employers typically adhere to the deposit schedules set forth by the Internal Revenue Service (IRS), which categorize employers based on their tax liability. These schedules dictate how frequently employers must deposit the taxes withheld from employee paychecks, such as Social Security and Medicare taxes.

On the other hand, state and local governments are subject to different rules regarding their payroll taxes, often allowing for varying frequencies in deposit requirements. This can result from differences in tax structure, payroll processing systems, or collective agreements among public sector unions.

The correct choice clarifies that while both private and public sectors contribute to Social Security and other payroll taxes, the timing and methods of their deposits can differ significantly due to the unique nature of government operations and regulations.