A lookback period is the period used to determine the amount of employment taxes paid by an employer, for the purpose of determining whether the employer must pay these taxes on a semiweekly or monthly basis. The lookback period has been determined by the IRS to be the aggregate amount of employment taxes reported by the employer in the twelve-month period ending the preceding June 30.
The employment tax amount is the total taxes (that is, not reduced by any advance EIC payments) reported on line 8 of Form 941. This line is marked "Total Taxes after Adjustments." If you reported $50,000 or less of taxes for the lookback period, you are a monthly schedule depositor; if you reported more than $50,000, you are a semiweekly schedule depositor.