FAQ

Want more information about tax and compliance issues but don’t know where to start? Search our database of Frequently Asked Questions for answers to the most-requested topics. Packed with practical and easy-to-use information, FAQs may be just what you’re looking for!

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What is ADPCheck and how can it benefit my company?
ADPCheck^SM offers you payroll checks written on an ADP account - freeing you from the burden of reconciling your payroll account each month eliminating the tedious task of signing and stuffing checks and ending the need to contact multiple sources to issue stop payments or make other payroll inquiries.

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From what bank account does ADPCheck draw its funds?
Checks are drawn from an ADP account at an ADP partner bank in your region. Your sales manager can provide you with the name of ADP''s partner banks in your area.
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How does Reverse Wire work?
ADP generates a reverse wire request to charge your account for the net cash total of the ADPChecks. The reverse wire instruction is transmitted to the ADP partner bank on the day your bank account is to be charged (generally, two days prior to your check date). The partner bank then sends the wire request to your bank in order to process the charge.
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How does ACH debit work in conjunction with ADPCheck?
ADP generates an ACH debit to charge your account for the net cash total of the ADPChecks. Your account will generally be charged one day prior to your payroll check date.
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What is EFTPS?
The Electronic Federal Tax Payment System, or EFTPS, provides an electronic system for paying federal taxes. The Internal Revenue Service (IRS) has been replacing the current system of processing taxes in compliance with Congressional mandates. Through EFTPS, the IRS expects to expedite the availability of funds and investment decision-making information to the U.S. Treasury while providing flexible payment options to the business taxpayer.
The effort to overhaul the current system began in 1992 with the implementation of the TAXLINK system. TAXLINK operated as a prototype to test various features that could be utilized in EFTPS, the final nationwide system - which began implementation in 1995.
Why was EFTPS mandated?

In order to offset decreased revenues resulting from the North American Free Trade Act (NAFTA), Congress mandated the electronic collection of federal depository taxes.

Prior to 1995, all taxpayers were required to deposit these taxes - federal insurance (FICA), federal unemployment (FUTA), withheld income, railroad retirement, corporate income, and various federal excise taxes - with an authorized depository institution or Federal Reserve Bank on tax due date.

This could be accomplished by using federal tax deposit paper coupons or magnetic media. The depository institution was then given one banking day to transfer the funds to the Treasury's account.

The electronic mandate now requires that those funds be applied to the Treasury account on tax due date, thereby accelerating the government's use of the funds by one day.
How can I determine if my business is mandated to comply with EFTPS?
Internal Revenue Service (IRS) regulations, issued in 1994, mandate use of Electronic Funds Transfers (EFTs) for Federal Tax Deposits (FTDs) and require business taxpayers within specified thresholds to begin paying their FTDs electronically.
Once my company meets the mandated threshold for EFTPS, what must I do?
Once you meet the mandated employment tax or other depository tax threshold for the Electronic Federal Tax Payment System (EFTPS), all federal business tax payments must be made electronically, even if your deposit activity falls below the threshold in future periods.
What taxes must be paid electronically, in compliance with EFTPS?
All federal employment and other depository tax payments must be made using the Electronic Federal Tax Payment System (EFTPS):
- Quarterly Federal Excise Tax (Form 720)
- Employer's Annual Federal Unemployment Tax (Form 940)
- Employer's Quarterly Federal Tax (Form 941)
- Employer's Annual Tax Return for Agricultural Employees (Form 943)
- Annual Return of Withheld Federal Income Tax (Form 945)
- U.S. Corporation Income Tax (Form 1120)
- Farmer's Cooperative Association Income Tax (Form 990C)
- Employer's Annual Railroad Retirement and Unemployment (Form CT-1)
- Return of Private Foundation (Form 990PF)
- Exempt Organization Business Income Tax (Form 990T)
- Annual Withholding Tax Return for U.S. Source Income of Foreign Persons (Form 1042)
Once I determine that my business must comply with EFTPS, do I have to notify the IRS of our mandated status?
The Internal Revenue Service (IRS) will notify you. A letter will be sent to your address of record on file with the IRS. Since this address is most likely not that of the payroll department, you should take steps to ensure that the proper personnel receive this IRS notification. This is especially important since business taxpayers who reach mandated status are responsible for using the Electronic Federal Tax Payment System (EFTPS) - even if they do not receive IRS notification.