How does one make changes to prior year 941s?
Changes to prior quarter Forms 941 are normally reported on Form 941c and attached to the 941 filed for the quarter in which the error was discovered. Prior quarter liability amount changes should not be included with the liability amounts reported on current quarter payments. If the prior quarter adjustment results in a reduction of liability, reduce the amount authorized for a current payment by the amount of the adjustment. If the adjustment amount increases the liability, increase the amount of the authorization to include the additional amount. See Chapter 7 in the FEDTAX II User Guide. Pages 7-59 thru 7-64.
With respect to the number of days between processing date and paydate (when creating payroll calendar), are the days based on business days or calendar days?
That is dependent upon whether you answered "yes" or "no" to the questions of "Processing excluding Saturday" and "Processing Excluding Sunday". If you answer "yes" to the questions, then Saturday and Sunday will not be counted. However, if you answer "no" to one or both questions, then that day, so indicated with the "yes", will be counted.
What is the FEDTAX II Internet address?
For federal tax payments, the FEDTAX II Internet address is: https://www.fedtaxii.com/ft2
When will the capability to electronically file CT-1s and 720s be added to FEDTAX II? Forms 945, 720, 1042, and CT-1 are not scheduled for electronic filing at this time.
How are 941Cs for a prior year reported? As part of the current 941 payment?
Payments associated with Form 941c should be reported as part of a current 941 payment, but liability amounts associated with the 941c should not be shown on a current payment record. Form 941c will be prepared and printed on FEDTAX II then faxed to the IRS Memphis Service Center.
User Guide, page 8-18: define paydate and due date. For payments for a prior quarter, how does one report payments and what dates are placed in the paydate and due date fields?
For payments for a prior quarter, agencies should use the Supplemental and Special Payment option under the Tax and Wage Data menu. The paydate field should contain the last day of the quarter for which the payment is being made. The due date is the date that the agency would like the funds to be transferred to the IRS (also called the settlement date).
Will there be a broadcast message for the head count due date (March 12th of every year)? Where is this information reported in FEDTAX II?
There will not be a broadcast message for this purpose. This information is entered on the ALC Setup screen, under the Master File Setup menu option. Completion of this field is optional.
Does the IRS PIN (for 941 tax filing) ever expire for an administrator? If so, what are the conditions?
The PIN code currently does not expire but remains in effect until revoked by the agency. The Application for FEDTAX II Form 941 PIN Code includes an option to revoke a previously issued PIN code. A proposal to issue new PIN codes annually is currently under consideration.
Does the IRS monitor PIN activity and consider PINs inactive after a certain period of non-use? If a PIN is inactive and an ALC Administrator tries to make a 941 filing, what happens? Will the filing be rejected?
The PIN currently remains in effect until revoked. However, if the proposal to issue new PIN codes annually is approved, a replacement for inactive PINs would not be issued. Any invalid PIN will cause the Form 941 to be rejected by IRS. FEDTAX II will notify the agency of the rejection within approximately five days. The agency will need to resubmit the Form 941 with a valid PIN code or file on paper.
What is the difference between the EFT paydate and the official (check) paydate going to be handled? Which date drives the tax payments?
If your payroll system gives you the information for the EFT payments, you can enter the information on the Tax and Wage Data screen as soon as you receive it. You should enter the EFT payment information using the official payment date (to ensure that your 941 filing is correct). Once this data has been entered, the system will automatically assign the due date based on the paydate and the dollar amount. The agency should then go to the Authorize Payment screen and modify the due date (settlement date) according to IRS guidance. To be technically in compliance with deposit regulations, the date that EFT money becomes available to the employees should be used to determine the date that the tax payment is due.
Example: A large agency's official payday is Thursday, September 24, but many employees receive their pay by EFT on Monday, September 21. If the payroll records are able to identify the tax amount associated with the EFT payments, the agency may make separate Tax and Wage Data records to settle on Tuesday and Friday, September 22 and 25. Both payments should show a paydate of September 24. If only one payment will be submitted, the Tax and Wage Data record should be authorized for settlement on September 22.
Does the password ever expire?
No, but it is recommended that you change your password periodically on the Current User/Change Password screen.
If a user's security level is modified from ALC Administrator to ALC User, does their PIN (for return filing) need to be revoked (user won't have filing capability since they will be ALC User)?
We recommend that you notify the IRS of this change. If the PIN code needs to be revoked, submit an "Application for FEDTAX II Form 941 PIN Code" with the "Revocation" box marked. See question 37.
Does the EFT# in any way identify the agency submitting tax payments or filings?
No. The EFT number does not identify the agency, but, the EFT number is unique throughout the system.
What code is to be used in the Deposit State Code field in the 941 Tax Filing (under Generate Tax Return Data)?
For federal agencies, the deposit state code field should be left blank.
Why is there a warning message for 941 and 945 Supplemental and Special payments that states "paydate is more than 15 days before/after system date" when trying to make a payment for a prior quarter?
This warning message, which can be overridden, is provided to advise the user when a current paydate is not entered, to reduce the opportunity for keying errors.
How often does the calendar have to be set up? Once a week? Once a month? Once a year? The calendar needs to be created only once a year but it can be modified, deleted, or recreated at any time. Note that only one calendar can exist at a time for an FEIN/ALC combination, however that calendar can be created to include multiple payrolls, such as a weekly and a bi-weekly.
If an agency goes into CA$HLINK II and pulls up all activity for its ALC, will the FEDTAX II activity be included? Alternatively stated, does the agency have to specifically call up FEDTAX II activity using CASHLINK II Account Number(CAN) 004936??
When an agency accesses all activity for its ALC in CASHLINK II, the FEDTAX II activity will be included. Using the FEDTAX II CAN will allow an agency to isolate FEDTAX II transactions.
How is a negative payment made?
This function is performed by entering a negative dollar amount in the appropriate subcategory on the Input Tax Data screen. The negative payment should be authorized in the same manner as regular payments, with the additional validation that another payment for the same tax type, tax period, and settlement date must have been previously authorized. An enhancement is currently being considered to display the net payment amount when a negative payment is made.
Under the Supplemental and Special Payments menu option, the choices for tax code are 1) payment with a return, 2) tax deposit, and 3) subsequent payment. The options for 941 and 945 payments are 1) payment with amended return, 2) payment with return, and 3) subsequent payment. If relocation taxes (941 payments) can be reported using the Supplemental and Special payments, how are these payments classified/coded? As a subsequent payment? Or should agencies be using Input Tax Data under the Tax and Wage Data menu for this type of payment?
Any current quarter liability, including relocation payments, should be made using the Input Tax Data screen under the Tax and Wage Date menu.
Can payments that have been adjusted be adjusted again, if done within seven days of the original settlement date?
Yes. Understand that you can adjust the adjusted amount, not the original amount.
What is the Adjust Wages and/or Tax Detail menu option used for?
If the payment amount is correct but the agency needs to correct wages or the distribution among the subcategories (withholding, social security, Medicare), the agency would use the Adjust Wages and/or Tax Detail menu option. (see page 7-52 of the User Guide).
What is the Adjust Net Tax Liability menu option used for?
Only the Adjust Payment Screen will change the dollar amount actually paid to the IRS (downwards only, within seven calendar days --see page 10-16 of User Guide). If an agency lowers the dollar amount paid when authorizing the payment, the FEDTAX II system will assume that additional payments are required and will continue to remind the agency that additional payments are due. An agency should use the Adjust Net Tax Liability screen to correct the liability to match the payment, and therefore eliminate the reminder messages (downwards only, within seven calendar days of settlement date). See page 7-44 of the User Guide.
Will the system time out if a user attempts incorrect or erroneous actions multiple times (vs. timing out for inactivity)?
No, but your agency's internal network configuration may cause you to time out prematurely.
Who can change contact information? The ALC User, ALC Administrator, or both?
Currently, both the ALC User and the ALC Administrator may change the contact information.
What should I do if I failed to authorize a payment by the due date? Will the transaction still be in the system if I try to authorize it five days later? What do I need to change to successfully authorize the payment?
The transaction would still be in the system. You would still need to authorize the payment, but change the settlement date (due date). The system will automatically assign a current settlement date if a payment is authorized after the "Expected Settlement Date".
Canceling an authorization doesn't delete the transaction from the system. How is a canceled payment completely removed from the system?
Once the payment authorization is canceled, the tax and wage data can be deleted completely from the system by using the Delete Tax Data menu option.
The example of the SF 224 in the User Guide should be clarified. The FEDTAX II Accounting Procedures (Chapter 13 in the FEDTAX II User Guide) have been expanded to include a full example of the SF 224 and SF 1219/1220 with other collections and disbursements reported. Updated User Guide pages will be distributed to all FEDTAX II users. SF 224 PREPARERS: FEDTAX II payments are processed through the CASHLINK II system. While the funds are considered a disbursement from an agency's ALC, they are transferred to IRS using a "collection" document, the SF 5515. Therefore, the FEDTAX II payments are reflected in Section I, Column 3 "Gross Disbursements," Section II, Line 2 "Collections Received this Month," Section III, Line 2 "Collections Received this Month" and Section III, Line 3 "Deposits Presented or Mailed to Bank in." SF 1219/1220 PREPARERS: FEDTAX II payments are processed through the CASHLINK II system. While the funds are considered a disbursement from an agency's ALC, they are transferred to IRS using a "collection" document, the SF 5515. Therefore, the FEDTAX II payments are reflected on the SF 1220 in Column 3 "Gross Disbursements" and on the SF 1219 on Line 4.20 "Deposits Presented/Mailed to Bank."
How is the settlement date calculated in IRS Circular E?
Every employer is designated as a "semi-weekly" or "monthly" depositor. Unless the agency or EIN is new, most agencies should have been notified by IRS that they are semi-weekly depositors. A semi-weekly depositor is required to pay ("settle") any tax deposit for a payday on Wednesday, Thursday, or Friday by the following Wednesday. A liability incurred on Saturday, Sunday, Monday, or Tuesday must be paid by the following Friday. A monthly depositor must submit their payment by the 15th day of the month following the payday. Regardless of depositor category, if the accumulated tax liability amount is $100,000 or more, the payment is due on the next banking day. See Circular E for more details. FEDTAX II calculates the Expected Settlement Date by looking at each payment separately. However, the $100,000 rule applies to all unpaid tax deposits for the same EIN, tax form, and quarter (941) or year (945/CT-1). To calculate the 941, 945 or CT-1 correctly, a separate FEDTAX II payment should be created for each payday in which taxable payments are made, even if several payments will settle on the same day.
How is backup withholding reported?
This is reported on the 945.
Does a federal agency have to file a 941 return for a quarter in which it did not make any payments?
Yes. Form 941 should be filed for any quarter in which wages subject to income tax withholding, social security, or Medicare were paid. If you do not need to file a return because no wages were paid, contact IRS or file a paper return marking the box to indicate a seasonal or final filing.
Should the 941C be sent to IRS Andover or IRS Memphis?
Beginning in January 1999, submit your 4th quarter Form 941 on FEDTAX II with entries on the appropriate adjustment lines. Then print and fax your Form 941c to the Memphis Service Center.
If an agency has both bi-weekly and monthly payrolls, and on a holiday backs up the paydate for the bi-weekly payroll, but moves it forward for the monthly payroll (next business day), how should the payroll calendar be set up?
The agency should create a calendar for the more frequent payroll (bi-weekly), giving the criteria for the more frequent payroll cycle. Once the calendar is created, each due date associated with the less frequent payroll can be edited. Additionally, dates may be added or deleted as necessary, using the View/Edit Payroll Calendar menu option.
How long will data be retained on-line in FEDTAX II?
15 months.
What are some examples of why a federal agency would make 941 supplemental or special payments?
An agency would make a 941 supplemental or special payment in the case of a payment for a prior quarter or a payment on an amended return.
If a federal agency does not make any 941 payments during a quarter, will the FEDTAX II system build a zero dollar 941 to be filed electronically?
Yes, and the return will contain zero dollar amounts. In order to file a zero tax return, the user should enter at least one tax record that contains all zero wage and tax dollar amounts, generate the 941, and then authorize it.
Will IRS issue several Form 941 PIN codes for the same EIN?
No. The electronic 941 program currently allows only one PIN code per EIN. During FEDTAX II training, it was recommended that each official who may be asked to approve a Form 941 submit an application for a PIN code. This was incorrect. If more than one has been requested, IRS will issue a PIN to the primary request only. If multiple requests were submitted and the PIN has been assigned to the wrong person, contact the IRS Austin Service Center electronic filing help desk at 512-460-8900.
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