StartEaseHelp / Payroll glossary
What is EFTPS?
EFTPS is the Electronic Federal Tax Payment System. Federal payroll tax deposits are made through it.
What is EFTPS?
EFTPS is the Electronic Federal Tax Payment System. Federal payroll tax deposits are made electronically through EFTPS, and StartEase never asks for your EFTPS PIN or password.
Why does it matter?
A federal tax deposit is a payment of the federal income tax withheld plus Social Security and Medicare, both the employee's share and yours. EFTPS is where that payment is made.
It matters because a deposit made after its due date carries a penalty that grows with every day it is late.
The key facts
| Fact | What it means |
|---|---|
| What it is | The IRS's electronic system for paying federal taxes. |
| What goes through it | Federal payroll tax deposits. A deposit is a payment, not a return. |
| Who makes the deposits | You choose in Company details: StartEase as your authorized agent (Managed payroll only; you sign IRS Form 8655), or you from your own EFTPS account. |
| Your PIN and password | StartEase never asks for them and never keeps them. |
| What you record | The date, the confirmation number and the receipt for each deposit. |
How does it work in StartEase Payroll?
- Open Company details and the Federal tax setup card, and choose who makes the federal deposits.
- Open Reports & forms and choose Monthly tax deposits to see the amount and the due date.
- If you deposit yourself, pay through EFTPS by the due date, then mark the deposit paid with the date, the confirmation number and the receipt.
- If StartEase deposits as your agent, check the recorded deposits in the same report.
Common mistakes
- Paying after the due date. The IRS charges a penalty on a late deposit, and a person responsible for paying over withheld tax can be personally liable if it is not paid.
- Sharing your EFTPS PIN or password with anyone. StartEase does not need them.
- Marking a deposit done without checking it on the IRS site. Marking it only records it for you.
Related guides
Federal tax deposits and Form 941, Form 8655 and What is a federal deposit schedule?
Sources (government sites)