What is an 'overpayment' tax notice?

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.

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