If you’re a business owner, chances are you’ve come across the Electronic Federal Tax Payment System, also known as the EFTPS. (No, not the EFPTS or the ETFPS. It’s a confusing acronym!)
This free system lets you pay federal taxes online or by phone, hassle-free. You can even schedule payments in advance to be sure you don’t miss an important due date.
Any US taxpayer can use the EFTPS, but it’s particularly useful for business owners who need to pay federal taxes online regularly. Whether you’re filing estimated taxes or submitting withheld payroll taxes, the EFTPS is the fastest and easiest way to get your money to the Internal Revenue Service (IRS).
What taxes can be paid with the EFTPS?
You can pay any federal taxes using the IRS’s EFTPS website. For business owners, the most common taxes you might pay through this payment option are:
Estimated taxes, which are due every quarter, otherwise, you may owe the IRS a late fee. You need to pay estimated taxes if you expect to owe at least $1,000 to the IRS or if you think your withholding and refundable credits will be less than either 90% of your current year’s taxes or 100% of your previous year’s taxes.
Payroll taxes withheld from your employees’ paychecks, including Social Security, Medicare, unemployment, and federal income taxes. (Want to calculate your employees’ payroll taxes? We can help with that.)
LLC or corporate taxes due after filing tax forms 1065, 1120S, or 1120.
Excise taxes, which you’ll withhold when customers buy certain goods or services, such as gasoline or tanning services.
Personal income taxes due after you file Form 1040 can also be paid using the EFTPS.
How do I enroll in the EFTPS?
Enrolling in the EFTPS is simple, but you need to plan in advance since processing your registration can take up to five business days. Make sure to enroll well before your tax due date so you aren’t charged late fees.
First: Do you have an employer identification number (EIN), a type of Taxpayer Identification Number (TIN)? If so, you’re already pre-enrolled through EFTPS Express Enrollment for New Businesses.
Here’s how to activate your account:
Wait for your EFTPS Personal Identification Number (PIN) to arrive in the mail, which should take five business days or less.
Call 1-800-555-3453 and enter the financial institution information for the account you want to pay taxes from.
You can have EFTPS verify your payment information through your bank for the electronic funds transfer (EFT) from your account to the U.S. Department of the Treasury, using the Automated Clearing House (ACH). But with this form of direct pay that can be used by businesses or individuals, expect to wait another six to 10 business days before you can start paying taxes.
Enter your phone number.
Record your confirmation number—you’ll need it later.
Set up an internet password for EFTPS.gov, if you want to make electronic payments.
Congratulations! You’re enrolled. You’ll receive a welcome packet in about a week, but you can start making payments immediately.
If you didn’t activate your EFTPS account when you registered for an EIN, you can sign up for an EFTPS PIN online. Here’s how.
If you’re registering as a business
Registering for the EFTPS is easy, and it can be done completely online at www.eftps.gov.
You’ll need the following information on hand:
Your EIN
Your business name and phone number
The name, address, and phone number of the contact person handling your EFTPS account
The routing number and account information of the bank account you intend to use for paying taxes. Some banks may offer to initiate EFTPS payments for you. Check with your bank to see if you can take advantage of this option.
Once you’ve registered, you can easily make a payment online or by calling the EFTPS phone number, 1-800-555-3453. If you want to look at the EFTPS worksheet to prepare for the call, you can find it in the IRS’s payment instruction booklet starting on page 13.
This is what the worksheet looks like:
Make sure to schedule your payment for no later than 8pm Eastern the day before the due date.
What if you need to pay taxes as an individual?
The IRS is no longer accepting new EFTPS enrollments for individual taxpayers, aka sole proprietors. If you already had an EFTPS account as a sole proprietor, you can still use it for now—until the IRS says otherwise.
However, if you didn’t already have an EFTPS account, you’ll have to pay your taxes directly through your online IRS account. To create a new account, you’ll need to provide your email address and create a password, then submit some basic personal information.
What’s the difference between EFTPS and e-file?
The IRS’s e-file system is designed to help you submit your taxes. If you owe money when filing taxes, you can set up an automatic electronic funds withdrawal using e-file. However, it’s not designed to process regular payments, like estimated tax payments or excise taxes. For those, you should use EFTPS.
How does EFTPS work with payroll?
If you’re depositing employment taxes, you’ll want to determine the deposit schedule that aligns with your payroll schedule.
In general, if you reported $50,000 or less in federal employment tax in the previous four quarters (referred to as a lookback period), then you would have a monthly deposit schedule. But if you reported more than $50,000 in federal employment tax during the lookback period, you would be making semiweekly tax deposits.
You need to determine which deposit schedule you’re required to use by the beginning of each calendar year. Many payroll providers integrate directly with the EFTPS system, letting you make regular payments without having to log in to the system.
In general, if you reported $50,000 or less in federal employment tax in the previous four quarters (referred to as a lookback period), then you would have a monthly deposit schedule. But if you reported more than $50,000 in federal employment tax during the lookback period, you would have a semiweekly deposit schedule.
You need to determine which deposit schedule you’re required to use by the beginning of each calendar year. Many payroll providers integrate directly with EFTPS, letting you make regular payments without having to log in to the system.
FAQs
How long does it take for an EFTPS payment to process and post to my account?
When you make a payment on EFTPS, you’ll select a date for the payment, the same way you do with banks when you’re paying your credit card bill online. The date you select is the day your payment is processed. In general, though, it’s a good idea to submit your payment by 8 pm Eastern the day before your tax deadline to ensure it’s processed on time.
Who is required to use EFTPS to make federal tax deposits?
Most businesses are required to use EFTPS to make their federal tax deposits. That includes corporations, tax-exempt organizations, LLCs, and partnerships. The exception is sole proprietors—the IRS now encourages sole props to pay their taxes directly through their online accounts, not EFTPS.
What should I do if my EFTPS payment is rejected or I miss a deadline?
If you receive a payment return notice from the IRS in the mail, that means your payment wasn’t processed. In that case, you’ll need to immediately resubmit your payment. Make sure you check that your bank account has enough money in it to cover your IRS payment—having insufficient funds is a common reason payments don’t go through. If, on the other hand, your bank account shows that the money was pulled from your account, but it still doesn’t show up in your IRS account two days after you submitted the payment, you’ll need to contact the IRS by phone. If you miss your payment deadline, don’t panic. Just make your payment as soon as possible on your EFTPS portal. Unfortunately, you might have a penalty to pay, but the quicker you can get your late payment in, the less you’ll owe in fees.
How do I cancel or modify a scheduled tax payment in EFTPS?
You can’t modify a scheduled tax payment in EFTPS—your only option is to cancel your scheduled payment, then make a new one. Keep in mind that you have to cancel a scheduled tax payment at least two business days before the payment’s due date; otherwise, you won’t have the option to cancel. If you need to cancel a scheduled tax payment by phone, you have to call the IRS toll-free number at least two business days before the payment is due: 1 (800) 555-3453.
How can I use EFTPS to make payments for Form 941 (Employer’s Quarterly Federal Tax Return)?
If you need to make payments for Form 941, you just have to make sure you’re enrolled with EFTPS first. From there, all you have to do is log into your EFTPS account, then select the form you want to make payments for.
How do I recover my PIN or password if I am locked out of my EFTPS account?
Unfortunately, the EFTPS doesn’t have an option to recover your PIN or reset your password online. You can only do it by calling EFTPS customer service. The number is 1 (800) 555-4477. You’ll have to verify your identity by providing your Social Security Number or EIN, your name and address, your bank account information, and your most recent tax deposits. To avoid having to call, make sure you record your EFTPS PIN or password somewhere secure, like an online password manager or a notebook in a safe.
Quick note: This is not to be taken as tax advice. Since tax rules change over time and can vary by location and industry, consult a CPA or tax advisor for specific guidance. Find an accountant
