Electronic Federal Tax Payment System (EFTPS) is mandatory for all business tax payments, including payroll, beginning on January 1, 2011.
New regulations eliminate the rules for making federal tax deposits (FTDs) by paper coupon. After 12/31/10, the Treasury Department will no longer maintain that system. So, effective 1/1/11, employers of all sizes will have to make federal tax deposits via the Electronic Federal Tax Payment System (EFTPS).
If you haven’t already started, next year you’ll make deposits online with a computer or by telephone. To get started, you need a Taxpayer Identification Number (Employer ID or Social Security Number) and a Personal Identification Number (PIN). If you don’t have a PIN, call Customer Service at 800-555-4477. Then, schedule your payments at least one calendar day before the tax due date (by 8:00p.m. ET).
The system will allow you to:
- make payments 24 hours a day, seven days a week
- Improve compliance. Using EFTPS drastically reduced payment-related errors that could trigger penalties
- Track payments. You’ll receive an acknowledgement number (receipt). Use it to track the payment and communicate with IRS.
- Check the Internet or call Customer Service to verify payments/review up to 16 months of payment history.
The types of taxes required to be paid by EFTPS are:
- FICA and withheld income taxes
- certain excise taxes
- corporate income/estimated taxes
- estimated taxes on certain trusts
- nonpayroll taxes
- private foundation excise taxes
- taxes withheld from nonresident aliens, and
- unrelated business income taxes incurred by nonprofits.
If you need any assistance getting set up on EFTPS, give us a call or try one of these free resources:
- Publication 4132, explains the process of enrolling and paying via the Internet
- Publication 966, The Secure Way to Pay Your Federal Taxes for Business and Individuals
- Publication 4169, Tax Professional Guide to Electronic Federal Tax Payment System
- Publication 4275, Express Enrollment for New Businesses
- Electronic Payment Options Home Page