EFTPS is now (as of January 1, 2011) required for all business tax payments, including payroll taxes. This got me to thinking about the difference between E-File and EFTPS, so I figured I should clear up any confusion. Basically, EFTPS is for tax payments (it replaces the old deposit coupon Form 8109), while E-file is for filing tax returns electronically.
EFTPS replaces the old deposit coupon (Form 8109). You must now make payments electronically through this system, and you can use EFTPS for all taxes you paid with the deposit coupon. These are the payments, not the returns:
- Form 941 - Employer's Quarterly Federal Tax Return
- Form 940 - Employer's Annual Federal Unemployment (FUTA) Tax Return
- Form 944 - Employer's Annual federal Tax Return
- Form 1120 U.S. Corporation Income Tax Return
Other types of taxes which can be paid by EFTPS are installment payments and estimated tax payments.
There are several parts to E-File:
- Free File, which is provided free to taxpayers with adjusted gross incomes under $58,000 who are under age 65. This service can be used with fillable forms or through online filing vendors. Before you sign up with a vendor, be sure they will complete Schedule C for your business tax return. These services will not file corporate or partnership returns.
- E-File, using tax preparation software or through your tax preparer.
You can use E-File to file all business income tax returns and employment tax returns (including 940, Employer's Federal Unemployment (FUTA) Tax Return, Form 941, Employer's QUARTERLY Federal Tax Return and Form 944, Employer's ANNUAL Federal Tax Return). Remember, this is the electronic filing of the return, not the tax payment. See the IRS article on E-Filing Options for Business and Self-employed Taxes for more information.
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