FAQs About Tax Notices

Review the Tax Info tab in Zenefits Payroll for the respective taxing authority to ensure that Zenefits is authorized to file and pay taxes for the tax period indicated on the tax notice. See our FAQs for Tax Levels of Service in Zenefits Payroll for more details.

If Zenefits was not authorized to pay and file to this taxing agency for the period in question, you may need to work with your accountant or previous payroll provider to resolve the tax notice.

Tax agencies can assess an amount due for both tax due and penalty/interest fees. The reasons vary, but generally fall into the following categories:

Missing payment: If an agency has a missing payment in their system, many will automatically generate a tax notice to the taxpayer without reviewing the account. Causes for missing payments may be one of the following:

• A payment was sent, but not posted to the agency's system due to a delay or possible tax identification number error. In this case, proof of payment will usually resolve the notice.
• A business has switched payroll providers and the previous or new provider was not authorized to make payment for a portion of the tax period. In this case, the tax liability is due and should be paid by the taxpayer as soon as possible.
• Zenefits was not authorized to pay taxes to that agency for the tax period in question. In this case, the tax liability is due and should be paid by the taxpayer as soon as possible.

Late Payment: If an agency assesses a penalty for a payment that wasn't sent on or before the due date, there may be no tax due, but they will issue an amount due notice for the penalty (and possibly interest) assessed.

Tax Assessment: If an agency, usually an unemployment taxing authority, does not receive a filing for a given tax period, they will issue an estimate of the wages and associated tax due. These notices are not a reflection of the actual amount due and the filing will need to be completed in order to determine how much, if any, tax is due for the tax period.

Tax Adjustments: When a previously filed amount is corrected due to changes in wage/tax information, the additional amount due should be paid along with the corrected filing. Possible causes of an amount due notice resulting from a correction are as follows:

• The corrected filing was processed by the agency at a different time than the additional amount due (if applicable).
• The agency has assessed a penalty for the increase in tax liability.

Filing Error: Possible filing errors resulting in an amount due include the following:

• If a business has switched payroll providers and the previous and new provider were authorized to file for the tax period, this can cause an overstatement of taxable wages, which creates an erroneous amount due with the agency. In this case, the previous provider must work with the agency to back out their erroneous filing.
• An incorrect tax identification number was used when filing or paying taxes and the tax returns or corresponding payments were not properly posted.

Please note: Amount due tax notices should be sent in via Zenefits Contact Us for resolution, but there may be situations in which Zenefits is unable to assist with resolution:

• If Zenefits wasn't authorized to pay and file to this taxing agency for the period in question, you may need to work with your accountant or previous payroll provider to resolve the tax notice. See our FAQs for Tax Levels of Service in Zenefits Payroll for more details.
• If the amount due is comprised entirely of penalty and/or interest charges assessed by the agency, Zenefits may not be able to assist with resolution. Generally, payroll administrators will want to determine the reason for the penalty and interest assessment before sending the notice to Zenefits for further research.
• If the amount due is caused by a tax rate change, it is likely an accurate assessment of liability due. In this case, payroll administrators should resolve those tax notices directly with the tax agency and update the rate in their payroll account.

The reasons that a tax agency is indicating an overpayment on your account can vary, but generally fall into these categories:

Duplicate payment: Causes for duplicate payments may be one of the following:

• A business has switched payroll providers and the previous and new provider were both authorized to make payment for a portion of the tax period. In this case, the tax liability is overpaid and the taxpayer may be able to request a refund from the agency.
• A taxpayer paid tax liability directly to the agency because they received notice of an amount due, however the amount due notice was also resolved by the payroll provider.

Penalties Abated: If a request to abate penalties is granted by the agency after the penalty notice is paid, the agency will assess a credit on the taxpayer's account.

Tax Adjustments: When a previously filed amount is corrected due to changes in wage/tax information, it may result in a reduction in tax liability. In this case, the overpayment is valid and the taxpayer may be able to request a refund from the agency.

Filing Error: If a business has switched payroll providers in the middle of a tax period and the new provider doesn't have all of the wage/tax information for that tax period, the new provider may file understated taxable wages. As a result, if all payments were properly made, the agency's system will reflect that too much tax was paid as compared to the tax due on the return filed. In this case, the overpayment is not valid and the taxpayer should not request, accept, or cash any refunds from the agency. Instead, the filing must be corrected to reflect the proper liability due.

Please note: Overpayment tax notices may not need to be sent to Zenefits Customer Care for resolution unless payroll administrators need assistance in understanding the reason for the overpayment or believe it's due to a wage/tax error.

Generally, the reasons that a tax agency is indicating a filing has been missed on your account fall into these categories:

Incorrect Tax ID: The tax identification number entered into the Zenefits system is used to pay pay and file taxes and agencies use this number to identify accounts in which to post payments and tax returns. If a tax ID is missing a digit or has transposed numbers, agencies will post wage and tax data to a temporary holding account until the proper account can be identified. In this case, payroll administrators should contact the agency to request that the filings and payments be posted to the proper tax account and update their account number in the Zenefits system to avoid any additional errors from occuring.

Incorrect Filing Frequency: When payroll administrators set up tax jurisdictions in Zenefits Payroll, they are often prompted to enter frequency information. This information dictates the frequency of filing requirements for the respective agency. If the frequency is set to quarterly, for example, but the agency is mandating a monthly filing frequency for your account, they will often send a tax notice indicating that you have missed a filing period. In this case, payroll administrators should update their filing frequency in the Zenefits system and work with the agency to resolve the notice.

Filing Error: If a business has switched payroll providers in the middle of a tax period and neither the previous nor new provider were authorized to file for the tax period, no filing will be sent to the agency for the tax period. In this case, the taxpayer must work with one of the payroll providers or an accountant to ensure the filing is completed.

Please note: Missing Filing tax notices should be sent to Zenefits Customer Care for resolution, however, if Zenefits was not authorized to pay and file to this taxing agency for the period in question, you may need to work with your accountant or previous payroll provider to resolve the tax notice. See our FAQs for Tax Levels of Service in Zenefits Payroll for more details.

Most unemployment taxing authorities will send you a notice at the start of the new calendar year to let you know what your tax rate will be for the coming year. Sometimes the rate may go up or down depending on the agency's determination of your experience rating. For more information on how these agencies make rate determinations, see our article on Experience Ratings for State Tax Rates.

If your rate has changed, you will need to update the rate in your payroll account. To do this, go into the Payroll app and click on Settings. On the left-hand side, click into Tax Info, then edit for the state that needs to be updated.

Please note: You don't need to send informational notices to Zenefits, unless you're asked to by a Zenefits representative.

Typically, taxpayers will receive notices from taxing authorities letting them know that a filing is due soon and include a blank form. These notices do not need to be sent to Zenefits. Payroll administrators should review the Tax Info tab in Zenefits Payroll for the respective taxing authority to ensure that Zenefits is responsible for filing and paying taxes for the tax period indicated on the notice. See our FAQs for Tax Levels of Service in Zenefits Payroll for more details.

If the Level of Service indicates Calculate Only and you want Zenefits to file and pay taxes to this agency, payroll administrators should reach out to Zenefits as soon as possible. The best way to request a Level of Service change is to contact Zenefits Customer Care.

The Zenefits Payroll system will calculate unemployment taxes each payroll using the rate entered into the system. If you are updating your rate for an effective date in the past, please note the following:

• As long as the rate is updated within the same quarter that it becomes effective, Zenefits will reconcile the wages to the new rate at the end of the quarter and debit/refund any variances.
• If the rate is updated after the quarter in which it became effective has closed, Zenefits will only reconcile an open quarter. This means that all payments and filings for the closed quarter will be processed at the old rate and payroll administrators may receive a tax notice from the agency indicating an amount due or overpayment for the variance. Payroll administrators should resolve those tax notices directly with the tax agency.