Lookback Period Law and Legal Definition

Lookback period refers to a twelve month period beginning on July 1 and ends on June 30 of the following calendar year. An employer's deposit schedule of the payroll taxes for a year is determined by the amount of Federal Withholding, Social Security, and Medicare (without being reduced by any advance earned income credit payments) accumulated in the lookback period. In simple terms, the lookback period helps an employer to determine the amount of employment taxes to be paid for a year.