Electronic Federal Tax Payment System

Get more insight into this federally mandated tax payment process. Learn How EFTPS Applies To You.

An employer’s mandated status and EFTPS effective date are determined based on employment threshold amounts as identified by the IRS. The employers deposits made during a calendar year are totaled for the returns listed below under each of his Employer Identification Numbers (EINs) to determine whether or not the current EFTPS threshold of $200K has been met. For EINs that meet the $200K threshold in the reviewed year, all federal liabilities must be deposited via EFTPS or the employers may be subject to an avoidance penalty of 10%.

Form	Type of Tax
941	Employer’s Quarterly Federal Tax Return
943	Employer’s Annual Tax Return for Agricultural Employees
945	Annual Return of Withheld Federal Income Tax
CT-1	Employer’s Annual Railroad Retirement Tax Return
940	Employers’ Annual Federal Unemployment (FUTA) Tax Return
720	Quarterly Federal Excise Tax Return
1120	U.S. Corporation Income Tax Return
990	Series of Taxes for Organizations Exempt from Income Tax

Since ADP has chosen to submit deposits via EFTPS for all clients, deposits will be made through EFTPS regardless of meeting the mandated requirements.The ACH or Wire deposit method will be used to transmit the funds. The ACH method requires ADP to initiate the deposit one day prior to due date. The Wire method will be used for next-day deposit and special circumstances only.

From the IRS Web Site:

You may have to deposit taxes using EFTPS. You must use EFTPS to make deposits of all depository tax liabilities (including social security, Medicare, withheld income, excise, and corporate income taxes) you incur in 2007 if you deposited more than $200,000 in federal depository taxes in 2005 or you had to make electronic deposits in 2006. If you must use EFTPS but fail to do so, you may be subject to a 10% penalty. For more information click here to download the IRS EFTPS brochure.