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EFTPS: What Is Electronic Federal Tax Payment System

Updated: November 1, 2023

The EFTPS, or Electronic Federal Tax Payment System, is a free service offered by the U.S. Department of Treasury. This system gives taxpayers and businesses an easy and secure way to pay federal taxes online or by phone or to schedule a payment for a later date. Read on to learn more about the EFTPS.

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    KEY TAKEAWAYS

    • The EFTPS is a secure online payment system.
    • Enrollment is necessary if you want to make certain tax payments through the EFTPS.
    • EFTPS offers more control and security than the Direct Pay system.
    • Enrollment can take up to 1 week to complete.

    What is EFTPS?

    The EFTPS was developed during the mid-1990s to decrease federal costs associated with tax collection. Since its rollout, the automated system helped streamline how businesses and the public pay their taxes. Once enrolled, you use a 3-step safeguard system to log in to your online account. 

    You can make income, employment, estimated, and excise federal tax payments online or by phone, year-round, any time of day or night. You can also schedule, cancel, and change payment arrangements, track payments through email notifications, and view up to 15 months of transaction history. The system provides real-time acknowledgment of payments.

    Ahead Of Tax Time Every Time

    Which Payments Can Be Made Via EFTPS?

    Users of EFTPS can only make payments once they are enrolled. The enrollment process can take up to 1 week. To ensure payments are on time, register before the payment due date. 

    Once you are enrolled, you can use the system to pay all your federal taxes, including:

    • Income tax
    • Corporate tax
    • Employment tax
    • Excise federal tax
    • Estimated tax

    There is no limit to the size of an EFTPS payment.

    EFTPS vs Direct Pay

    EFTPS isn’t the only payment tool accepted by the Department of Treasury. IRS Direct Pay is another service for tax remittance. The 2 services have significant differences. 

    Direct Pay only allows you to pay taxes for income taxes, estimated taxes, health care, civil penalties, retirement plans, and tax-favored accounts. Unlike direct pay, you can use EFTPS to make business-related tax payments. 

    With Direct Pay, you can only make up to 2 payments in a 24-hour period and schedule payments up to 30 days in advance. Direct Pay is also only available during certain hours. You can schedule payments 24/7 up to 365 days in advance with EFTPS.

    If you have signed up for email notifications, you can track your payments and use the included confirmation number to look up your most recent payment with the Direct Pay service. You can view up to 15 months of payment history with the EFTPS.

    How To Enroll In EFTPS

    The enrollment process can take up to 1 week, but it can be simple if you have your information ready. You will need your: 

    • Taxpayer Identification Number (Employer Identification Number or Social Security Number);
    • Bank account number and routing number; and
    • Address and name as they appear on your IRS tax documents

    Once you have gathered your information:

    • Go to the enrollment page
    • Select the enrollment tab
    • Select business, individual, or federal agency
    • Enter the required information
    • Submit

    You will receive an EFTPS letter with your PIN (personal identification number) in the mail within 5 to 7 business days. Once you have the PIN, you can go to EFTPS.gov to set up your password. You will need to authenticate with ID.me or Login.gov, or if you’re a federal agency worker, you can use your PIV/CAC. You will then need to verify your banking information or your EFTPS enrollment number.

    If your business received a pre-enrollment letter, you can call 1.800.555.3453 to activate the enrollment.

    Use your EIN/SSN, PIN, and internet password to log in. The system will prompt you to change your temporary internet password to a personalized password the first time you log in. You will also have to authenticate with Login.gov or ID.me to access the site. 

    You use these same login credentials when using the EFTPS voice response system.

    EFTPS Online Payment Benefits

    Initially, the Department of Treasury instituted the EFTPS to decrease paperwork and save the department money. However, there are many benefits for the taxpayer. The top benefit is convenience because it allows you to make your tax payment from home or office any time of day, 7 days a week, online, or through the voice response system. EFTPS allows you to:

    • Schedule payments up to 365 days in advance
    • Pay your income, employment, estimated tax payments, and excise federal tax payments
    • Easily change or cancel scheduled payments up to 2 days before the payment they are due
    • Track your payment with email notifications
    • View 15 months of payment history
    • Get help from Customer Service Agents

    When you make a payment, you receive an immediate acknowledgment that confirms your payment went through.

    EFTPS Tax Payment Drawbacks

    There are a few drawbacks to the EFTPS. The history only shows payments made through EFTPS. It won’t display any payments made through checks, electronic funds withdrawals from your bank account, money orders, or credit or debit cards. The system only shows the history as originally processed and does not display changes made after processing.

    You need to know for which tax period you are submitting the payment and what the amount is. EFTPS will not show you the amounts due. 

    You will also have to submit payments by 3 PM ET on a business day if you want them to be recorded that day. The payments also cannot be larger than $1,000,000.

    Another challenge some users experience is phishing scams. Through email, social media, and text alerts, phishing scams send messages that suggest there is an error with your EFTPS information and prompt you to change your personal information. This scam happens outside the EFTPS, which uses multiple security measures to protect your personal information. The IRS may contact you through email, but only if you have opted in for email notifications. The IRS requests you report all instances.

    FreshBooks Helps You Simplify Taxes and Save Time

    Using the Electronic Federal Tax Payment System is a secure and convenient way to pay your federal taxes online. Now that you have a better understanding of how it works and the many benefits, you can take control of your payments and streamline your tax process. FreshBooks offers many articles and guides to help you and your small business through payroll, invoicing, filing tax returns, and more. FreshBooks accounting software can track and categorize expenses to help you capture every eligible deduction. Try FreshBooks free by signing up today to see how easy tax filing can be!

    It's Time For Owners To Own Tax Season
    Sandra Habinger headshot

    Written by Sandra Habiger

    Sandra Habiger is a Certified Public Accountant with a Bachelor’s Degree in Business Administration from the University of Washington. Sandra’s areas of focus include advising real estate agents, brokers, and investors. She supports small businesses in growing to their first six figures and beyond. Learn more about her work at http://www.sixfiguresaccounting.com/ .

    Sandra Habinger headshot

    Written by Sandra Habiger

    Sandra Habiger is a Certified Public Accountant with a Bachelor’s Degree in Business Administration from the University of Washington. Sandra’s areas of focus include advising real estate agents, brokers, and investors. She supports small businesses in growing to their first six figures and beyond. Learn more about her work at http://www.sixfiguresaccounting.com/ .

    FAQs About EFTPS

    Who needs to enroll in EFTPS?

    EFTPS enrollment is necessary for anyone who wants to use the online payment system. The system also allows you to schedule, change, or cancel payments up to 365 days in advance. You can track your history and enjoy the convenience of 24/7 availability.

    Who is the primary taxpayer for EFTPS?

    The primary taxpayer is listed first on your tax return. If you have a small business without employees and you are the sole proprietor, you can enroll as an individual. Use the primary SSN associated with your TIN when you enroll with EFTPS.

    Can I pay with a credit card to EFTPS?

    Yes, you can use a credit card, direct deposit to your bank account, or wire transfer directly from your bank to pay your federal taxes. Once you log in to your EFTPS account, select “Make a Payment” and use the step-by-step screens to enter the payment information.

    When did EFTPS become mandatory?

    EFTPS is not mandatory, but it is a convenient way to pay your federal taxes. You can still mail a money order, a check, or send a wire transfer, however, you will have no guarantee that it will be processed on time. You can also use the Direct Pay system to pay your federal taxes.

    Is EFTPS used for payroll taxes?

    Yes, businesses and third-party payroll service providers can use EFTPS for payroll taxes. You can track your history and monitor tax payments made on behalf of your business through the ‘”Payments” and “Check Payment History” tabs on your EFTPS account.

    Am I required to use EFTPS?

    No, you are not required to use EFTPS when making tax payments, but it is a convenient way to pay your federal taxes. You can still use the postal service to mail a wire transfer, money order, or check. You can also use the Direct Pay system to make tax payments.

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