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System Setup - Electronic

Electronic Tax Payments

ProPay supports electronic tax payment methods to simplify federal and state tax filing. This section explains how to configure electronic payment options in your system.

ACH Debit Method - EFTPS

A computer file is sent to a bank authorized as an agent of the federal or state government. The file contains instructions to debit the employer's account when taxes are due and credit the appropriate government agency.

Federal payments: ProPay handles all federal ACH debits.

State payments: ProPay can handle state ACH debits for states that accept this payment method. Most states accept ACH debits for state withholding tax (STWT) payments. However, most states do not accept ACH debit payments for state unemployment insurance (SUI) taxes. For these states, ProPay will create a paper check for the tax payment.

ACH Credit Method - Tax Impounding

A computer file is sent to the client's bank or the payroll processor's bank. The file contains instructions to charge the employer's account and place funds in a separate payroll account (tax impounding). On the due date, the bank debits this account and credits the government's bank account for the taxes due.

ProPay can handle ACH credits for both federal and state tax payments.

Registration Requirements

Whether using the debit or credit method, you must submit a registration form before sending tax payments:

  • Federal: IRS Form 9779
  • State: Most states require a similar form

Register with the U.S. Treasury Financial Agent predominant in your area and with the appropriate state agency. In most states, you must register separately for state withholding taxes and SUI unemployment taxes. If a state agency does not accept ACH credits, ProPay will print a paper check for taxes due.

Electronic Tax Agent

ProPay uses the EFTPS Batch Provider system for electronic federal tax payments.

EFTPS Batch Provider

The Electronic Federal Tax Payment System (EFTPS) is the IRS system for making federal tax payments electronically.

To enroll:

  1. Visit www.eftps.gov
  2. Follow the enrollment instructions for your business type
  3. Complete the registration process

Note: Batch Provider IDs are issued by the IRS to Payroll Processors who transmit tax payments on behalf of multiple clients. If you are a payroll processor requiring a Batch Provider ID, contact the IRS directly through the EFTPS website.

EFTPS File Location

ProPay saves the EFTPS.TXT file to:

C:\PAYSOFT\PROPAY26\

To import this file into your EFTPS software, navigate to the ProPay installation folder and select the EFTPS.TXT file.

941 Electronic Filing (e-file)

For detailed information about filing Form 941 electronically, see the E-File 941/940 help topic.

Key Identifiers

ETIN (Electronic Transmitter Identification Number): A five-digit number assigned by the IRS to each applicant who transmits returns directly to the IRS data communications subsystems.

EFIN (Electronic Filer Identification Number): A six-digit number assigned by the IRS to identify the filer by IRS district.

PIN (Personal Identification Number): A five or ten-digit unique confidential number used by each authorized agent or taxpayer approved to participate in the IRS e-file for Business Programs.

DPIN (Third Party Designee Personal Identification Number): A self-assigned five-character identification number used by third-party authorized agents. This number also prints on paper Forms 941/940 for third-party designees.

SSN/PTIN (Preparer Tax Identification Number): A nine-character identification number that prints on paper Form 941. A PTIN starts with "P" followed by 8 digits. The IRS assigns PTINs to identify responsible individuals within an organization who transmit e-files. Register at www.irs.gov/ptin to obtain a PTIN. In the absence of a PTIN, you may use the preparer's Social Security Number.

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