CPA & Business Advisory Blog

Many Smaller Employers Will Have to Use EFTPS for Payroll Tax Deposits

Per the American Payroll Association, the Treasury Department has announced that, as part of a three-pronged initiative to reduce the amount of paper transactions it handles, most employers that now are allowed to use paper Federal Tax Deposit Coupons and checks to make payroll tax deposits will have to make those deposits electronically through the Electronic Federal Tax Payment System (EFTPS) beginning in 2011. The primary exemption will be for employers that have $2,500 or less in quarterly payroll tax liability and that pay their liability when filing their employment tax returns (ie: Forms 941 or 944).

 

 

Taxes Covered by the New Rule

 

  • Employment taxes
  • Corporate income taxes
  • Unrelated business income taxes (paid by tax-exempt organizations)
  • Excise taxes
  • Estimated taxes on certain trusts
  • Retirement distribution withholding
  • Backup withholding
  • Nonresident alien and foreign corporation withholding

 

How to Enroll

  • Go to www.eftps.gov and select Enrollment
  • Read and accept the Privacy Act and Paperwork Reduction Act
  • Select whether enrollment is for a Business, an Individual, or a Federal Agency
  • Complete the enrollment application with the following information:

¨       Taxpayer Identification Number

¨       Name and address as they appear on your IRS tax documents

¨       Bank account number and routing transit number

  • You will receive a PIN by regular mail
  • Then call 1-800-982-3526 after receiving your PIN to get a temporary internet password

¨       An internet password will not be necessary if you will be making your payments only by telephone

 

How to Make Payments by Internet

  • Go to www.eftps.gov and select "Make Payment"
  • Log in with your Taxpayer Identification Number, PIN, and internet password
  • Enter your payment information
  • Save a copy of the Payment Confirmation page upon completion.  This page contains the EFT Acknowledgement Number that acts as your receipt.

 

How to Make Payments by Telephone

  • Call the toll-free number:

¨       1-800-555-3453 for businesses or 1-800-315-4829 for individuals

  • Follow the voice prompts to select the tax form, payment type, period and amount
  • Record your EFT Acknowledgment Number
  • You will need your Taxpayer Identification Number and PIN

For more information on how our Small Business Services Group can help you with EFTPS payroll tax deposits, please contact Deb Herr at 440-449-6800. 

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