Business owners can simplify their payroll tax compliance by e-filing payroll tax returns. Employers can purchase e-file software that performs calculations and populates forms and schedules using a step-by-step process. This software also provides the filer with an email confirmation, generally within 24 hours of filing, that the IRS has received the return.
Payroll tax returns that can be e-filed. The most common types of employment tax returns can be e-filed. These returns include:
- Form 940, Employer’s Annual Federal Unemployment Tax Return. Employers use this form to report annual Federal Unemployment Tax Act tax.
- Form 941, Employer’s Quarterly Federal Tax Return. Employers use this form to report income taxes, social security tax, or Medicare tax withheld from employees’ paychecks. They also use it to pay their portion of Social Security or Medicare tax.
- Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees. Employers file this form if they paid wages to one or more farm workers and the wages were subject to social security and Medicare taxes or federal income tax withholding.
- Form 944, Employer’s Annual Federal Tax Return. This form is only filed by very small employers whose annual liability for Social Security, Medicare, and withheld federal income tax is $1,000 or less. Employers must have the IRS’s permission to use this form.
How to get started e-filing payroll tax returns. Employers who want to e-file their own payroll tax returns will need to purchase IRS-approved software.
The employer will need to sign the returns, which can be done in one of two ways:
- The employer can use their e-filing software to apply for an online signature PIN from the IRS. (Obtaining a PIN from the IRS usually takes at least 45 days, so plan accordingly.) The employer will use this PIN to sign any e-filed payroll tax returns.
- The employer can complete, sign, scan and upload with their return Form 8453-EMP, Employment Tax Declaration for an IRS e-File return. The employer will physically sign the Form 8453-EMP and attach it to their e-filed payroll tax return.
If the employer doesn’t want to buy special software to e-file their payroll tax returns, they can have their tax professional file the returns for them. These employers will need to provide their tax professional with a signed and dated Form 8879-EMP, IRS e-File Signature Authorization for Forms 940, 940-PR, 941, 941-PR, 941-SS, 943, 943-PR, 944, and 945.
Source: Checkpoint Newsstand 5/19/21
