Employers are assigned one of two depositor status classifications for Payroll Tax Deposit Rules. Which of the following is correct?

In the context of payroll tax deposit rules, employers are classified into two depositor status categories based on the amount of payroll taxes they accumulate. The correct option identifies these classifications as monthly or semiweekly.

Employers that have a smaller amount of payroll tax liability are typically classified as "monthly depositors." These employers are required to deposit their payroll taxes once a month. On the other hand, employers with a higher payroll tax liability are classified as "semiweekly depositors," meaning they must make deposits more frequently, either on Wednesdays and Fridays, depending on their payday schedule.

This classification system helps the IRS manage and collect payroll taxes more effectively by requiring more frequent deposits from those who have a larger tax liability and allowing smaller employers to have less frequent deposit requirements.

The other classifications mentioned, such as quarterly, monthly, or semimonthly, do not accurately reflect the established IRS depositor status rules regarding payroll tax deposits.