Q: How Do I Use the Electronic Federal Tax Payment System (EFTPS)?

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!) 

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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 IRS. 

What taxes can be paid with the EFTPS?

You can pay any federal taxes using the IRS’s EFTPS. For business owners, the most common taxes you might pay through the EFTPS 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 Form 1065, Form 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)? 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 PIN to arrive in the mail, which should take five business days or less.
  • Call 1-800-555-3453 and enter the banking information for the account you want to pay taxes from.
    • If you want to have EFTPS verify your bank information, 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 a 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.

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If you didn’t activate your EFTPS account when you registered for an EIN, or if you’re self-employed or don’t need an EIN, you can sign up for an EFTPS PIN online. Here’s how.

If you’re registering as a business

EFTPS-pin-for-business-owners-What-is-the-EFTPS

Registering for the EFTPS is easy, and it can be done completely online at 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 and account information of the account you intend to pay taxes from. Some banks may offer to initiate EFTPS payments for you. Check with your bank to see if you can take advantage of this option.

If you’re registering as an individual

EFTPS-pin-for-individuals-What-is-the-EFTPS

This is how you’ll register if you don’t have an EIN and only expect to pay estimated taxes. Just like registering as a business, you can register for your individual EFTPS account online.

Here’s what you’ll need to know:

  • Your name, Social Security number, and phone number
  • If you file your taxes jointly, information about your joint filer
  • The name, address, and phone number of the contact person or company who can handle EFTPS inquiries (probably you)
  • The routing and account information of your bank account. Unlike with business accounts, banks can’t initiate EFTPS transactions for individual accounts.

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 12.

This is what the worksheet looks like:

EFTPS-worksheet-What-is-the-EFTPS

Make sure to schedule your payment for no later than 8pm Eastern the day before the due date.

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 taxes 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 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.

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