If withholding is required of the arts organization, certain procedures should be followed with regard to depositing and remitting the tax withheld to the IRS. Withholding agents are required to pay the tax withheld on an annual, monthly, or quarter-monthly basis, depending on the amount withheld. The tax must be deposited in a Federal Reserve Bank, or commercial bank authorized to accept remittances of tax for transmittal to a Federal Reserve Bank, with a completed Federal Tax Deposit Form 8109.

A quarter-monthly period means one of the following: (1) the first day of the month through the seventh day; (2) the eighth through the fifteenth; (3) the sixteenth through the twenty-second; or (4) the twenty-third through the end of the month. If at the end of any quarter-monthly period, the total amount of accumulated undeposited tax is greater than $2,000, such tax must be paid within three (3) business days of the end of such quarter-monthly period. The quarter-monthly deposit requirement will be considered as having been satisfied if the withholding agent deposits 90 percent of the tax withheld during the period within three banking days after the close of the period. The remainder of the deposit must be made with the first deposit required after the fifteenth day of the following month.

Monthly deposits are required if, at the end of any month, the total amount of accumulated undeposited tax is more than $200 but less than $2,000. The aggregate amount of withheld tax is required to be deposited within fifteen days after the close of the calendar month.

Annual deposits are required if at the close of the calendar year the total amount of accumulated undeposited tax is less than $200. The deposit of such amount may be remitted with Form 1042 or by the due date for the Form 1042.