Blog · 16 October 2026

Form 720 Deposits and the Special September Deposit Rule: Q3 2026 Reconciliation Guide for US CPA Firms

By Keshav Bansal, CA

Form 720 deposits and the special September deposit rule are where federal excise compliance most often goes wrong, because the deposit calendar and the quarterly return calendar run on different rules. For 2026, every third-quarter deposit date has now passed, including the October 14 deposit for the last four days of September. What remains is reconciliation: tying semimonthly EFTPS deposits to the liability your client will report on the third-quarter Form 720, which the IRS’s Publication 509 (2026) lists as due Monday, November 2, 2026. This guide walks US CPA firms through the rules from Treas. Reg. §§40.6302(c)-1 through -3, the Instructions for Form 720 (Rev. June 2026), Pub. 509 and Intuit’s October 2026 checklist, and shows how to plan the next special September cycle.

Deposits vs the quarterly Form 720 return

Form 720 is a quarterly report; it is not the main payment mechanism. Under Treas. Reg. §40.6302(c)-1(a), a quarterly filer must make a deposit for each semimonthly period in which liability is incurred. The Form 720 instructions define a semimonthly period as the 1st through the 15th of a month, or the 16th through the last day of the month. All deposits must be made by electronic funds transfer, in practice EFTPS.

• The $2,500 threshold. The instructions say no deposit is required when the net liability for Form 720, Part I taxes doesn’t exceed $2,500 for the quarter; those taxes are payable with the return. Part II taxes are generally not deposited, except the floor stocks tax.
• Regular method timing. The deposit for a semimonthly period is due by the 14th day of the following semimonthly period. In practice that is the 29th for the first half of a month and the 14th of the next month for the second half.
• Amount. Each deposit must be at least 95% of the net tax liability for the period (§40.6302(c)-1(b)(1)). Alternatively, the look-back safe harbor treats a filer as compliant if each semimonthly deposit is at least 1/6 of the regular method liability reported for the second preceding quarter, each deposit is on time, and any underpayment is paid by the return due date.

The instructions add a warning worth repeating to clients: if you don’t deposit as required and instead pay the taxes with Form 720, you may be subject to a penalty.

How the special September deposit rule split Q3 2026

Treas. Reg. §40.6302(c)-2 breaks the second half of September into two deposit periods for regular method taxes, so more of the quarter’s tax is paid before September 30. Section 40.6302(c)-3(f) applies a parallel split to first-half September billings of communications and air transportation taxes deposited under the alternative method (IRS Nos. 22, 26, 27 and 28, based on amounts billed or tickets sold). Pub. 509 (2026) applies those rules to this year’s calendar:

• Regular method, Sept. 16–26: deposit by Tuesday, September 29.
• Regular method, Sept. 27–30: deposit by Wednesday, October 14, using the normal 14-day rule. Intuit’s Nadia Rodriguez, CPA, lists the same date.
• Alternative method, Sept. 1–11 billings: deposit by September 29.
• Alternative method, Sept. 12–15 billings: deposit by October 13. That deposit is due three business days after October 7, and Columbus Day fell on October 12.
• Alternative method, last 15 days of September: deposit by Tuesday, October 27. This one is still ahead, and both Pub. 509 and Intuit list it.

For amounts, the reg lets a depositor estimate the second-half September liability, treat 11/15 of it as the September 16–26 liability, and true up the remainder in the September 27–30 deposit. A filer relying on the look-back safe harbor keeps it for the third quarter only if the September 16–26 deposit is at least 11/90 of the look-back quarter’s regular method liability and the total second-half September deposits are at least 1/6. The instructions put 11/90 at 12.23%.

Deposits move backward; returns move forward

Weekend and holiday rules point in opposite directions, and teams that blur them miss dates. Under §40.6302(c)-1(c), a regular method deposit due on a Saturday, Sunday or District of Columbia legal holiday is due on the preceding business day. The special September dates follow their own rule. Under the reg and Pub. 509, a September 29 date that falls on a Saturday moves back to Friday, and one that falls on a Sunday moves forward to Monday.

Returns go the other way. Under 26 U.S.C. §7503, an act due on a weekend or legal holiday is timely on the next business day, and the Form 720 instructions say the same for the return. The third-quarter Form 720 is normally due October 31. In 2026 that is a Saturday, so Pub. 509 lists November 2, 2026. The quarterly Form 941 for Q3 2026 follows the same November 2 shift, so excise and payroll close can share one review window.

Where the sources disagree

• Return date. Intuit’s checklist tells firms to file Forms 941 and 720 “by October 30.” That is a sensible internal target, but Pub. 509 (2026) gives November 2 as the Form 720 due date.
• Sept. 27–30 deposit. A caution box in the June 2026 Form 720 instructions says to deposit by “the 10th day of October” because “October 11 is a Saturday.” October 11, 2026 is a Sunday, and that wording doesn’t match §40.6302(c)-1(c). Pub. 509 (2026) and Intuit both list October 14. We follow the regulation and Pub. 509, and a deposit made earlier under that wording was simply early, not late.

Q3 reconciliation checklist before November 2

• List every Q3 EFTPS confirmation by semimonthly period. For the second half of September, list the September 16–26 and September 27–30 deposits separately.
• Recompute each period’s net liability and test it against the 95% floor. Where the safe harbor is used, test it against 1/6 of the look-back quarter and the 11/90 September floor.
• Pay any underpayment by the return due date. The safe harbor requires it.
• Check alternative method clients for the October 27 deposit before their Q3 Form 720 is finalized.
• Flag new 2026 taxes separately. The instructions note limited deposit-penalty relief for remittance transfer tax (IRS No. 155) for the first three quarters of 2026. See our Notice 2026-52 remittance excise tax guide. For fuel clients, keep the deposit trail described in our federal diesel excise tax note.

Planning next year’s special September deposits

Build the split into the excise calendar now. Put a September 16–26 cut-off in the close checklist, use the 11/15 estimate where actual data won’t be ready by the 29th, and check the weekday of September 29 against the 2027 Pub. 509 once it is published. EFTPS deposits must be initiated at least one day before the due date, by 8:00 p.m. Eastern time. If that is missed, the instructions point to a same-day wire through your bank.

Where Tax Brew fits

Tax Brew supports US CPA firms with bookkeeping, semimonthly liability schedules and EFTPS-to-return tie-outs, so reviewers can sign off on Form 720 deposits before the return is due. Your firm keeps the advice and the signature. The first 20 hours are free for qualifying engagements. See our services, or email info@taxbrewglobal.com.

Sources: Treas. Reg. §40.6302(c)-1 (deposits; 95% rule; look-back safe harbor; 14th-day timing; $2,500 de minimis), §40.6302(c)-2 (special rules for September) and §40.6302(c)-3 (alternative method; September rules), eCFR; IRS, Instructions for Form 720 (Rev. June 2026); IRS Pub. 509, Tax Calendars (2026), Excise Tax Calendar; 26 U.S.C. §7503 (Cornell LII); Nadia Rodriguez, CPA, CTC, “Key tax dates and to-do-list: October 2026,” Intuit Accountants Tax Pro Center (Sept. 18, 2026). Check current IRS guidance; as of 16 October 2026.