EFT REQUIRED FOR MOST BUSINESS TAX PAYMENTSBondBeebe
Glenn Bailey, CPA
EFT Now Required For Most Business Tax Payments
Electronic Funds Transfer (EFT) is now required for most business related tax payments made after December 31, 2010.
Payments should be made thru the EFTPS system (www.EFTPS,gov)
Taxpayers that were formerly not required to use EFT and used Federal Tax Deposit (FTD) coupons now must make eligible payments via EFT.
This includes the following taxes:
Corporate income and estimated taxes;
Excise taxes reported on Form 720, Quarterly Federal Excise Tax Return.
Unrelated business income taxes of tax-exempt organizations;
Private foundation excise taxes;
Estimated taxes on certain trusts;
Taxes withheld on nonresident aliens and foreign corporations reported on Form 1042;
FICA taxes and withheld income taxes;
Railroad retirement taxes;
Non-payroll taxes, including backup withholding reported on Form 945;
Federal Unemployment Tax Act (FUTA) taxes;
There is an existing de minimus rule where certain payments of a nominal amount (ranging from $2500 for Form 720 to $200 for Form 1042) may still be made via check with the return. Prior registration is required before using the EFTPS system. IRS has stated that any company using deposit coupons will be automatically enrolled in the EFTPS system and will receive their account information in the mail. Payments must be entered in the EFTPS system 1 day before their due date in order to be considered timely. Taxpayers may also be able to arrange for their financial institutions, tax professionals or other 3rd parties to make a deposit on their behalf using a master account.