Tax Impounds #
Overview #
This article provides comprehensive information about the Tax Impounds feature in ProPay, our payroll processing software. Tax Impounds are automatically created during check printing and are crucial for managing various tax payments, including 941, 940 STWT, SUI, and local taxes.
Key Features #
- Automatic creation of Tax Impounds during check printing
- Handling of multiple tax types (941, 940 STWT, SUI, and local taxes)
- Support for both electronic and check payments
- Daily transmission of Tax Impounds to your financial institution
Accessing Tax Impounds #
- Click on “Client Functions”
- Select “Electronic Processing”
- Choose “Tax Impounds”
Understanding the Tax Impounds Screen #
Columns Explained #
- Co-Id & Company: Sorted by Company Id and name for easy review
- Pay Date: The employer’s regular pay date for these entries
- Settle Date: The date funds must be in the receiver’s bank account
- Type: Indicates the type of tax or entry (e.g., DRAFT, PROC_DR, 941, SUI)
- D/C: D for Debit, C for Credit
Entry Types #
- DRAFT: Drafting of Employer’s Bank account
- PROC_DR: Debit into Payroll Processor’s bank account
- PROC_CR: Credit into Payroll Processors Account
- BILL: Billing fees for Payroll Processing
- 941, 940, SUI, STWT, LOC1, LOC: Indicates the type of Tax being paid
Common Tasks #
Reviewing and Deleting Transactions #
- Review all entries before transmission
- Option to delete any or all Tax Impound transactions prior to transmitting
Balancing Entries #
- Check total Debits and Credits
- Ensure the difference equals zero
- If unbalanced, identify the out-of-balance employer
- Delete extra entries or recreate entries for the specific employer
Exporting Tax Impounds File #
- Click “Export” when ready to send the file
- ProPay creates a NACHA compatible text file
- File naming convention: 8-digit filename with .TAX extension (e.g., 35010424.TAX)
- First 4 digits: Sender’s unique ID
- Last 4 digits: Month and day
Uploading to ACH Processor or Financial Institution #
Follow your ACH processor or financial institution’s instructions for file upload.
Troubleshooting #
Recreating Entries for a Specific Client #
If you need to recreate entries for a particular client:
- Delete all entries for this client in the Tax Impounds screen
- Delete all tax payments for this client
- Run “Print checks for Selected employees” to force the re-creation of tax payments
Handling Non-Electronic Tax Payments #
For states or local agencies not accepting electronic tax payments:
- ProPay will still impound taxes from the employer’s account
- A check will be printed to the agency instead of an electronic payment
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 through the help menu in ProPay or visit our website at https://www.paysoft.com.
For additional information or related topics, please refer to our comprehensive help documentation within the ProPay software or on our website.