Banks are beginning to post notices that they no longer are going to accept Federal Tax Deposit Coupons, or what small businesses may know as Form 8109-B for tax payments. The Treasury Department has abandoned the paper coupon system and will force businesses and individuals to make tax payments via the Electronic Federal Tax Payment System. More commonly called EFTPS, this system has been in existence since 1996. Since then, more and more taxpayers volunteered or were forced to enroll and make electronic payments.
Smaller companies with infrequent tax payments could still take their 8109-B forms and checks to the bank to pay their taxes – but not after the end of this year. The IRS has issued proposed regulations to scrap the paper coupons. Using EFTPS is purported to be faster, easier and more convenient for taxpayers and the IRS. In fact, once enrolled, you can go on-line or phone in payments 24/7! You don’t even have to worry whether there is a bank holiday. EFTPS allows both businesses and individuals to make any federal tax payments and they can be scheduled in advance.
The final regulations will allow for some businesses with a minimal tax amount to send in a payment with the tax return. This will certainly help those who pay only once a year.
I assume this is not of concern for companies that use a payroll processing house such as Paychex?
Correct Drew, payroll companies have been enrolled in EFTPS as agents and make their clients’ payroll payments electronically. Companies that have to make income tax payments will still have to abandon the coupons and sign up with the electronic program.