Federal Tax Deposit Rule Change - Paper Coupons Eliminated
Posted 11-29-2010 | By Jared Weiskopf | Download Article
As of 1/1/11, businesses and organizations will no longer be able to use a paper coupon [Form 8109 (Federal Tax Deposit Coupon)] to deposit federal taxes directly to an authorized bank. Instead, deposits need to be made by telephone or online using the Electronic Federal Tax Payment System (EFTPS). This means that after 12/31/10, all federal tax deposits (including deposits of federal employment and unemployment taxes, corporate income taxes, tax exempt organization unrelated business income taxes, private foundation excise taxes, back-up withholding, and excise taxes) must be made using EFTPS.
Before depositing taxes using EFTPS, you must enroll either online at www.eftps.gov or by completing Form 9779 (EFTPS-Business Enrollment Form) and mailing it to the EFTPS enrollment center. However, we recommend enrolling online as it is more convenient and much quicker than filing Form 9779. (Expect to receive online confirmations in 15 business days, compared to the 10 weeks sometimes required for paper applications.)
To enroll online, have the following information available:
- Employer Identification Number (EIN).
- Banking account number and routing number.
- Business/organization name, address and phone number as it appears on IRS tax documents.
Enrolling in EFTPS is not difficult, but it does take a while for the processing to be completed. Since 1/1/11 will be here before you know it, please enroll as soon as possible.
When the enrollment process is completed, you will receive two separate mailings. One includes a confirmation/update form and a step-by-step instruction booklet. The other will be a letter that includes an enrollment trace number, a personal identification number (PIN), and instructions on how to obtain an Internet password. Upon receiving the PIN, you may begin making payments by phone. To make payments online, first follow the instructions to obtain an Internet password.
We know change can be difficult. Fortunately, using EFTPS has benefits. Payments can be made 24 hours a day, 365 days a year, and they can be scheduled up to 120 days in advance of the desired payment date. EFTPS also provides a confirmation number (EFT Number), which guarantees the tax deposit has been scheduled and allows the transaction to be traced if necessary. The IRS claims that errors resulting in penalties are 31 times less likely for businesses using EFTPS.
Please contact Jared Weiskopf at jweiskopf@hlbtr.com or 651-407-5830 with any questions.