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How to Transmit 941/940 E-files

This topic explains the step-by-step process for transmitting 941 and 940 e-files to the IRS using ProPay and the IRS e-file system.

Important: As of 4th Quarter 2015, the IRS abandoned the old Legacy e-filing programs and will only accept 940/941 returns transmitted under the new MEF filing guidelines.

Before You Begin

Before you can transmit any returns to the IRS, complete the registration process. See E-file IRS registration for details.

Get approved first before submitting production files.

Verify Your IRS Credentials in ProPay

Check that you have entered all required IRS credentials:

  1. Click Client Functions > Set-Up > System Setup > Electronic.
  2. Verify that the following fields are complete:
    • ETIN (Electronic Transmitter Identification Number)
    • EFIN (Electronic Filer Identification Number)
    • PIN (Personal Identification Number)
    • PTIN or SSN (Preparer Tax Identification Number)

    Submit Test Files First

    Before submitting regular (production) files, you must send one or more test files to get approved.

    Create a test client

    You can either:

    • Take an existing client and change the first 2 digits of the Federal ID to start with "00".
    • Create another company just for testing.

    Create Test or Production Files in ProPay

    1. Click Client Functions > Electronic Processing > Magnetic Media > Federal Quarterly 941/940/944 Filing.
    2. Select the clients to include in the submission.
    3. Select Test or Production as appropriate.
    4. Click Create File.

    ProPay creates an XML file and displays the file location.

    Review Before Uploading

    Before uploading the file to the IRS:

    1. Print the Internal Report (hard copy for your records).
    2. View Mag Media File to review at least one client's wages and taxes (spot-check some numbers and compare with a printed copy of the form).
    3. If everything checks out, click Upload File.

    Upload to the IRS

    1. Log in to the IRS e-file website using your credentials.
    2. Follow the on-screen directions to upload the file.
    3. Navigate through the upload wizard:
      • Select the file from your computer.
      • Confirm the file details.
      • Submit the file.

      Download IRS Acknowledgement Files

      After uploading the file:

      1. Click the IRS link to Receive/Download the IRS Acknowledgement file(s).
      2. Save the acknowledgement file(s) in your \PAYSOFT\PROPAY26 folder.

      The acknowledgement file is a .ZIP file that can be opened and read by ProPay.

      Read Acknowledgements in ProPay

      1. Click Client Functions > Electronic Processing > Magnetic Media > Read IRS 94x Acknowledgement file.
      2. Browse to the .ZIP file you downloaded.
      3. ProPay extracts and displays the acknowledgement information.
      4. Review the status for each return (Accepted or Rejected).

      If Returns Are Rejected

      If any returns are rejected:

      1. Review the error messages in the acknowledgement file.
      2. Make the necessary corrections in ProPay.
      3. Create a new file.
      4. Resubmit to the IRS.

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