Using the IRS Electronic Federal Tax Payment System

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Due to the new Tax Cuts and Jobs Act, many exempt organizations are now required to file Form 990-T and pay tax associated with fringe benefits to employees. The new filing requirement also requires new administrative responsibilities for not-for-profits (NFPs). One of the most important administrative responsibilities is implementing tax payments through the IRS Electronic Federal Tax Payment System (EFTPS).

Organizations that are subject to the new tax enacted on fringe benefits will need to submit their payments through the EFTPS. NFP organizations should plan carefully to implement the new payment system accounting for the time that the IRS needs to complete registrations and set up from a technical standpoint. For this reason, exempt organizations should begin steps to implement the EFTPS as soon as possible.

Here are the steps to follow to implement the EFTPS within your organization. Please contact your CSH representative if you have questions.

Steps to Implement EFTPS

  1. Register the organization with an EFTPS account by enrolling at eftps.gov. This process will take 10 days. All payments made by exempt organizations are required to be made using EFTPS.
  2. After enrolling, a PIN will be sent from EFTPS. This PIN must be provided during the log-in process to EFTPS.
  3. Plan for the new payment schedule. To be considered timely, payments must be made at least 24 hours prior to the due date. For example, a return ending 12/31 will need to have the balance due submitted by 5/14 to be considered timely.
  4. Select 990-T as the form type once logged into EFTPS. Please do not insert 990. If 990 is incorrectly chosen, the amount paid will be refunded and the Organization will receive a notice for late payment.
  5. For any organizations with a year-end other than 12/31, the year of the payment will serve as the year-end of the Organization. For example,if a 6/30/19 year-end filer owes $500 with its 2018 990-T, the Organization would indicate it is making a $500 payment for the 2019 990-T.

Please contact us with any questions you may have regarding the above information.

 

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