What is the Electronic Federal Tax Payment System?

What is the EFTPS?

The Electronic Federal Tax Payment System (EFTPS) is a free tool provided by the U.S. Department of the Treasury that processes secure tax payments (both owed and estimated) online via direct debit from a bank account. It’s used by over 12 million groups, including individuals, businesses, nonprofits and other government organizations. Many find EFTPS to be a convenient way to make regular tax payments to the IRS, especially since it’s available 365 days a year, 24 hours a day.

Should employers set up an EFTPS account?

Employers may want to consider setting up an EFTPS account for the following reasons:

• They can schedule payments in advance to help ensure they do not miss deadlines
• When making payments on behalf of a client, payroll service providers generally use EFTPS
• EFTPS has three-factor authentication to increase security
• Corporations are required to deposit their federal taxes electronically

The difference between Direct Pay and EFTPS

The difference between EFTPS and the IRS’s other electronic payment tool, Direct Pay, is quite simple. Both individuals and business owners may pay federal taxes using EFTPS, whereas Direct Pay is only available to individuals. In addition, there is no limit to the amount of money that can be sent via EFTPS, unlike Direct Pay, which caps at $10 million.

What payments can be made via EFTPS?

A variety of payments can be made through EFTPS, including:

• Estimated taxes
• Corporate taxes
• Self-employment taxes
• Payroll taxes, including Federal Insurance Contribution Act taxes
• Excise taxes on alcohol, gasoline and certain other goods

How to enroll in the EFTPS

1. Visit the official EFTPS site
2. Submit the following information:
   • Employer identification number (EIN) or taxpayer identification number (TIN)
   • Business name and address
   • Contact information and phone number
   • Bank account number and routing number
3. Wait seven to 10 days for approval and a PIN, which will arrive via mail to the extent approval is provided
4. Use the PIN to create an online account with a login name and password
5. Start making or scheduling payments

Making a payment on EFTPS

Paying federal taxes via EFTPS is straightforward and convenient. Simply log on to the site, select the “make a payment” option and follow the on-screen, step-by-step instructions. Payments can be scheduled up to 365 days ahead of time by choosing a specific date for the money transfer. Changes and cancellations may be made up to two days prior.

Once the transaction is complete, users receive a confirmation number as receipt. EFTPS also includes an email alert system that keeps individuals posted on the status of their payments and has up to 15 months of payment history. If additional assistance is needed, customer service agents can be reached at 1-800-555-4477.

A note on the rules governing EFTPS (and how to avoid EFTPS scams)

The EFTPS is strictly a payment system. The IRS cannot use it to access accounts or seize funds to satisfy taxes owed. In addition, the Department of the Treasury generally communicates with individuals via the postal service. Emails that prompt EFTPS users to click a link to change their passwords is a well-known phishing scam.

Frequently asked questions about EFTPS

What is the EFTPS used for?

The EFTPS is used to make secure tax payments, both owed and estimated, online via direct debit from a bank account.

What taxes are paid to EFTPS?

EFTPS users can pay estimated, corporate, self-employment, excise and payroll taxes through the electronic system.

Is the EFTPS legitimate?

Yes, the EFTPS is administered by the U.S. Department of the Treasury.

Is EFTPS mandatory?

Using the EFTPS is not required, although corporations must pay their federal taxes electronically. Individuals and smaller businesses have the option of sending checks, money orders or cash to the IRS.

Who should use EFTPS?

EFTPS is ideal for both business entities and individuals who want a convenient and secure way to pay their federal taxes.

This guide is intended to be used as a starting point in analyzing the EFTPS and is not a comprehensive resource of requirements. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.