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System Setup (Electronic)

Electronic Tax Payments #

Table of Contents #

  1. Introduction
  2. ACH Debit Method – EFTPS
  3. ACH Credit Method – Tax Impounding
  4. Registration Process
  5. Electronic Tax Agent
  6. 941 Electronic Filing (E-File)
  7. Troubleshooting
  8. FAQs
  9. Feedback

Introduction #

This knowledge base article provides comprehensive information about electronic tax payments using ProPay’s payroll software. It covers both ACH Debit and ACH Credit methods, registration processes, and important terminology related to electronic tax filings.

ACH Debit Method – EFTPS #

The ACH Debit method works as follows:

  1. A computer file is sent to a bank authorized by the Federal or State government.
  2. The file contains instructions to debit the employer’s account when taxes are due.
  3. The appropriate government agency is then credited with the payment.

ProPay capabilities:

  • Handles all Federal ACH Debits
  • Supports STATE ACH debits for states capable of receiving them
  • Most states accept ACH Debits for STWT payments
  • For states not accepting ACH Debit payments for SUI taxes, ProPay creates a paper check

ACH Credit Method – Tax Impounding #

The ACH Credit method operates as follows:

  1. A computer file is sent to the client’s bank or the Payroll Processor’s bank.
  2. The file instructs the bank to charge the employer’s account and place funds in a separate payroll account (Tax Impounding).
  3. On the due date, the bank debits this account and credits the Government’s bank account with the taxes due.

ProPay capabilities:

  • Handles ACH Credits for both Federal and State tax payments
  • If a state agency doesn’t accept ACH Credits, ProPay prints a paper check for the taxes due

Registration Process #

Before sending tax payments electronically, employers must submit a registration form:

  • IRS uses Form 9779
  • Most states require a similar form
  • Register with the U.S. Treasury Financial Agent predominant in your area
  • Register separately for state withholding taxes and SUI-unemployment taxes in most states

Electronic Tax Agent #

The Electronic Tax Agent determines which U.S Treasury Financial Agent you’ll use for ACH Debits or Credits. The latest version is:

EFTPS Batch Provider – 2006 version #

To enroll as a Batch Provider and download the software:

  1. Visit www.eftps.gov
  2. Enter the Batch Provider ID given during registration
  3. Enter the Batch Provider PIN given during registration

Other options (older versions, to be phased out):

  1. Bank One (Northern U.S.): 1-800-945-8400
  2. Bank of America (Southern U.S.): 1-800-555-4477
  3. 1st Chicago Batch filer (for 50+ clients)

941 Electronic Filing (E-File) #

Important terms for E-Filing:

  • ETIN: Electronic Transmitter Identification Number
  • EFIN: Electronic Filer Identification Number
  • PIN: Personal Identification Number
  • DPIN: Third Party Designee Personal Identification Number
  • SSN/PTIN: Preparer Tax Identification Number

For more details, see Help Topic Efile 941_940.

Troubleshooting #

If you encounter issues while using ProPay for electronic tax payments:

  1. Verify your internet connection
  2. Ensure all required fields are filled correctly
  3. Double-check your Batch Provider ID and PIN
  4. Confirm that your bank account information is up-to-date
  5. Check if the state you’re filing for accepts electronic payments

If problems persist, contact ProPay support through our help menu or website.

FAQs #

Q: How do I know if my state accepts ACH Debits for SUI taxes?

A: Check with your state’s tax agency or consult the ProPay software for the most up-to-date information.

Q: What if I need to change my bank account information?

A: Update your bank details in the ProPay software and re-register with the appropriate tax agencies.

Q: How often should I check for software updates?

A: We recommend checking for updates monthly to ensure you have the latest features and compliance updates.

Feedback #

We value your input! To provide feedback on this documentation or report any issues:

  1. Use the help menu in the ProPay payroll software
  2. Visit our website at https://www.Paysoft.com and navigate to the support section
  3. Contact our customer support team directly

Your feedback helps us improve our documentation and services. Thank you for using ProPay!