What is an 'amount due' 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.
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