Employment Tax e-file System
The Employment Tax e-file System offers an improved way to file Forms 940, 941, and 944 electronically, in an XML format only. There are “two methods” available to file Forms 94x, using the Employment Tax e-file System.
Two Methods of e-filing Forms 94x:
- 94x e-file Programs through an Approved IRS e-file for Business Provider (Reporting Agent)
- 94x On-Line Filing Programs as an IRS Authorized Signer through approved IRS COTS software.
The two methods provide “three Options” for e-filing Employment Tax e-file Returns.
Three Options to e-file 94x Returns:
- Option 1 – Sign and e-file own returns as 94x OnLine e-Filer ( IRS Authorized Signer) in 4 Steps:
Step 1 – Buy IRS Approved Commercial Off the Shelf (COTS) Software
Step 2 – Complete the 94x OnLine PIN Registration within the COTS Software and submit to IRS for approval as an IRS Authorized Signer to receive a 10 digit PIN
Step 3 – Return 94x PIN acknowledgement Statement of Receipt for the PIN to the IRS within 10 business days.
Step 4 – e-file 94x returns using your COTS software.
Note: 94x OnLine e-Filers can only e-file five (5) employment tax returns a year
For complete guidelines refer to Publication 3823, Employment Tax e-file System Implementation and User Guide.
- Option 2 – Authorize a Reporting Agent to prepare, sign and e-file all 94x Family of returns for you
- Option 3 – Become an Authorized e-file Provider by completing the IRS e-file Application and choosing the Provider Role(s) that meet the needs of your business.
For complete guidelines refer to Publication 3112, IRS e-file Application and Participation and Revenue Procedure 2007-40.
The Employment Tax e-file System offers new features and greater flexibility for filing employment tax returns.
Features of the System
• More Filing Options - The Employment Tax e-file System accepts the following forms and schedules:
- Form 940
- Form 940, Schedule A
- Form 940, Schedule R
- Form 940PR
- Form 941
- Form 941PR
- Form 941SS
- Form 941, Schedule B
- Form 941, Anexo B
- Form 941, Schedule D
- Form 941, Schedule R
- Form 944
- PIN Registration and
- Payment Record
Form 941c, entitled Supporting Statement to Correct Information is no longer accepted electronically. Corrections must be made using Form 94x (series) X Series), Adjusted Tax Forms. (For more information refer to Correcting Employment Taxes.)
More Flexible Filing - Forms 940, 941 and 944 can now be filed in a single transmission file.
- More Explicit Error Conditions - New error conditions pinpoint the location of the error in the transmission, and provide complete information for each error identified.
- Faster Acknowledgements - Transmissions are processed upon receipt, and acknowledgements are returned in near real-time. No more waiting for once or twice daily system processing cycles.
- Integrated Payment Option - Owe Taxes? - You can e-file a balance due return and, at the same time, authorize an electronic funds withdrawal from your bank account or pay by credit card. Payments are subject to limitations of the Federal Tax Deposit Rules.
- Completely Electronic Signature Process - Taxpayers and Reporting Agents can continue to sign their returns with their own IRS issued Personal Identification Number (PIN).
Who Can Participate
For the purposes of the Employment Tax e-file System, a taxpayer is any business entity that has employees, and has a requirement to file any of the Form 940, 941 or Form 944 family of returns with the IRS.
The taxpayer has two (2) methods to e-file their return:
- They may choose to become a 94x OnLine e-Filer participant ( IRS Authorized Signer), using IRS approved COTS software.
- Or, they may use the services of a Reporting Agent, as defined below.
Taxpayers do not file directly to the IRS. (Additional guidance is found in Publication 3823, Employment Tax e-file System Implementation and User Guide.)
Electronic Return Originator
An Electronic Return Originator is any entity that "originates" the electronic submission of tax returns to the IRS. EROs are identified by an Electronic Filer Identification Number (EFIN). An ERO does not originate its own employment tax returns (Form 94x family); an Authorized IRS e-file Provider must be used for this purpose.
An accounting service, franchiser, bank, or other person that complies with Rev. Proc. 2003-69, as modified by Rev. Proc. 2005-60 and is authorized to prepare and electronically file Forms 940, 941, and 944 for a taxpayer. Reporting Agents can sign all of the electronic returns they file with a single PIN signature.
Third Party Transmitters
A firm, organization, or individual that receives electronic return data from taxpayers, ERO's, and Reporting Agents may reformat the data (if necessary), batch it with returns from other filers, and transmit the data to the IRS.
Companies that develop software for their own use, or commercial sale for the purpose of electronically filing employment tax returns, the software must pass an Assurance Testing process prior to being approved for e-filing.
How to Participate
Prospective 94x OnLine e-Filer participants must complete the 94x PIN (Personal Identification Number) Registration Process to request approval to participate as an IRS Authorized Signer and receive a 10 digit PIN used to sign electronic returns.
Prospective Authorized IRS e-file Provider participants must complete and submit an IRS e-file application. Complete the IRS e-file application online after registering for e-services. Additional guidance can be found in Publication 3112, follow the instructions provided to complete your application.
NOTE: If you or your organization participates in more than one of the IRS e-file for Business programs, you should submit a single IRS e-file Application which includes all of the return types you plan to file. This will help expedite the processing of your application.
Your e-file Application for the Employment Tax e-file System must be completed to meet timely to meet the following tentative deadlines:
Assurance Testing – December 2011
Production Filing – January 2012
If you have questions, or require assistance completing the 94x PIN Registration Process or IRS e-file Application, please contact the e-help Desk at 1-866-255-0654 (toll-free).
How Returns Are Signed
Taxpayer (94x OnLine e-Filer Participant)
The 94x OnLine e-Filer is the IRS Authorized Signer that electronically files Forms 94x through IRS Approved COTS software. A Personal Identification Number (PIN) is used as the IRS Authorized Signer’s signature. The employer’s authorized signer must register through an approved Software Provider for a PIN. The software will request information pertaining to the authorized signer’s business. This process must be completed before electronic returns can be transmitted. Once this process is completed the IRS will send the approved IRS Authorized Signer a 10 digit PIN, used to sign electronic returns via U.S. Mail within 7 – 10 days. Once the IRS Authorized Signer receives the 10 digit PIN and returns the acknowledgment Statement of Receipt, they are ready to file their Forms 940, 941, and 944 electronically. (Refer to Publication 3823 for complete guidelines regarding the 94x OnLine e-Filer (IRS Authorized Signer) participant. Also, for complete guidelines regarding Authorized IRS e-file Providers that support 94x OnLine e-Filer participants refer to Publication 3112 and Revenue Procedure 2007-40.
Note: Currently, the system is unavailable. It will be operational in January 2016. The Form 8453-EMP signature option is available for filers that need to sign their returns.
Electronic Return Originator (ERO)
An ERO does not have signature authority and should not be issued a 10 digit PIN to sign an OnLine Employment Tax Return for the taxpayer. The Business taxpayer (authorized signer) must sign their own returns via the approved software and should not disclose the PIN to anyone. PINs are confidential. If the ERO applied for multiple roles, indicating on his IRS e-file Application that he wants to be a Reporting Agent then and only then will he be granted signature authority for the client and tax periods referenced on his Form 8655 submitted to IRS for processing.
Reporting Agents sign all of the electronic returns they file with a single five (5) digit PIN Signature.
A complete list of software providers which includes links to approved Employment Tax e-file providers can be found on the Approved IRS e-file for Business Providers' page. And, be sure to check the e-file for Business Partners', page where you can find special offers and discounts.
Frequently Asked Questions about Employment Tax e-file
I was issued a PIN in January 2005 and filed my own return electronically. My business is now growing. Can I go to an Authorized IRS e-file Provider?
Do I need a new PIN?
No, A PIN remains active unless it has been reported as compromised.
What should I do if I used my PIN last quarter and now I’ve lost it?
If you’ve lost your PIN you should notify the e-Help Desk at 866-255-0654 (toll-free).
Can I file Form 941's for prior quarters?
Yes. You can file original returns for the four (4) prior quarters. However, Form 941X, Adjusted Employer’s QUARTERLY Federal Tax Return (FTR) or Claim for Refund returns cannot be e-filed.
How do I pay my taxes electronically?
Taxpayers who file electronically using IRS e-file can e-pay in a single step by authorizing an electronic funds withdrawal (EFW) or by credit or debit card payment through the Electronic Federal Tax Payment System (EFTPS).
Businesses can make their Federal Tax Payments, installment agreement and estimated tax payments using EFTPS--securely, online or by phone. Visit eftps.gov, for more information or call EFTPS Customer Service at 1-800-555-4477.
How do I locate an Authorized IRS e-file Provider to file my return?
Find an Authorized IRS e-file Provider in your area by visiting the e-file Resource Page.
Or, you can find a complete list of business software providers which includes links to approved Employment Tax e-file providers on the Approved IRS e-file for Business Providers' page. And, be sure to check the e-file for Business Partners page where you'll find special offers and discounts.
Where Can I Find Additional Information?
Additional information can be found on the Employment Tax e-file System on the 94x XML Developers' Forum,page. The 94x XML Developers' Forum provides a single point of reference. The Developers’ Forum contains links to the 94x XML Schemas, Schema Updates, Change Pages, and guides to transmission file construction. You may also view or download Publication 3823, Employment Tax e-file System Implementation & User Guide.