941/940 E-file #
Overview #
This knowledge base article provides information about the 941/940 E-file functionality in ProPay payroll software. E-filing allows users to submit Form 941 (Employer’s Quarterly Federal Tax Return) and Form 940 (Employer’s Annual Federal Unemployment Tax Return) electronically to the IRS, offering cost savings and convenience.
What is a 941/940 E-file? #
A 941/940 E-file is an XML file containing all the information typically found in paper Forms 941 or 940. The E-File system is detailed in IRS Publication 3823. While the file format and terms can be complex, ProPay software handles most technical aspects, simplifying the process for users.
Key Terms and Definitions #
- Reporting Agent: An accounting service, franchiser, bank, or other entity authorized to prepare and electronically file Forms 940 and 941 for taxpayers.
- ETIN: Electronic Transmitter Identification Number (5 digits)
- EFIN: Electronic Filer Identification Number (6 digits)
- PIN: Personal Identification Number (5 or 10 digits)
- DPIN: Third Party Designee Personal Identification Number (5 characters)
- SSN/PTIN: Preparer Tax Identification Number (9 characters)
For more detailed explanations of these terms, refer to the “Terms and Definitions” section in ProPay’s help menu.
Setting Up E-filing in ProPay #
- Apply to the IRS to become an E-filer
- Receive necessary Filer IDs and PIN numbers from the IRS
- Enter Preparer Information in ProPay:
- Go to Client Functions > Setup > System Setup > Electronic
- Enter IRS-provided IDs and PINs in the 941 E-file Parameters section
- Enter Client Information:
- Go to Client Functions > Edit/Change client > Tax filing and Other Info
- Indicate if the client has signed Form 8655
- Enter the 941 Business Name Control assigned by the IRS
Creating and Filing E-file Returns #
- Go to Client Functions > Electronic Processing > Magnetic Media > Federal Quarterly 941 Returns
- ProPay will generate an XML file for transmission to the IRS
- Transmit the file to the IRS via modem
- Receive an acknowledgment number from the IRS as a receipt
- ProPay retains a separate file as the “official” IRS filed copy
Troubleshooting #
If you encounter issues while setting up or using the E-file functionality:
- Verify all IDs and PINs are correctly entered in the system setup
- Ensure the client’s information is up-to-date and accurate
- Check that Form 8655 has been signed and indicated in the client’s profile
- Review the generated XML file for any errors before transmission
- If transmission fails, check your internet connection and try again
- For persistent issues, contact ProPay support for assistance
Additional Resources #
- IRS Publication 3823: https://www.irs.gov/pub/irs-pdf/p3823.pdf
- ProPay Help Menu: Access through the software or visit https://www.paysoft.com
Feedback #
We value your input! If you have suggestions for improving this documentation or encounter any issues not addressed here, please contact our support team or use the feedback option in the ProPay software.
For further assistance, please consult our help menu within the ProPay payroll software or visit our website at https://www.paysoft.com.