Taxing authorities commonly send letters to taxpayers notifying them of changes to their account, upcoming deadlines, new tax rates, and any discrepancies (overages, underpayments, or missing filings). Tax Notices generally fall into these five categories:
Please note: Many of these notices can be resolved on your own by verifying and/or updating the settings in your Zenefits account. If you do need to send it to Zenefits, you may do so by clicking the '?' icon in your Zenefits account and following the prompts to send us the Tax Notice.
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:
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:
Filing Error: Possible filing errors resulting in an amount due include the following:
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:
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:
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: