This article is for admins who get tax notices from the Internal Revenue Service (IRS) or state agencies about their company’s withholding or unemployment taxes. You can handle most of these notices by checking or updating your settings in Gusto.
Important: Agencies do not send notices to Gusto directly. Make sure you read and act on any notices before the deadline or effective date.
If the notice is about a change to your deposit schedule or unemployment tax rate, you can update it in Gusto:
Change your federal deposit schedule
We default to depositing on the faster semi-weekly schedule to prevent late tax payments, penalties, and tax delinquency notices.
For other changes to federal or state details, follow the steps in this article. You can also go to the How to read and handle tax notices section to learn more about the notice you received and what steps to take.
Report a notice to Gusto if:
You cannot fix the notice yourself.
You’re not sure what the notice means.
The notice shows a missing payment or balance owed.
Learn how to upload the notice in the Report and upload a tax notice to Gusto section.
If you have Gusto Business Compliance, mail from agencies in your covered states also shows up on your Business compliance page, and your concierge team can help with it. Learn more.
Here’s how admins can understand and handle common notices, like refunds, amounts due, rate changes, and more.
Check if the notice is from the IRS or a state agency. The name is usually at the top.
Make sure the notice is about a payroll tax we file for you, like withholding or unemployment tax.
If we do not file that tax, handle the notice outside of Gusto. Contact the agency or work with your tax professional.
Confirm that we handled your payroll taxes during the time period on the notice.
We start filing taxes the quarter of your first check date with Gusto. This is different from the pay period.
Use the Reports page in Gusto to find your first check date. Find the Paystubs report, then click Choose a check date and scroll to the bottom of the list.
Check that these details on the notice match your Gusto account:
Company name
Company address
Deposit schedule
Tax rate
Account ID/Employer Identification Number (EIN)
If anything is incorrect, update it in Gusto right away.
To check what we paid and filed for the period on the notice, view your tax payments and filings.
Deposit schedule change: Update your deposit schedule in Gusto. Note the effective date to avoid penalties.
We default to depositing on the faster semi-weekly schedule to prevent late tax payments, penalties, and tax delinquency notices.
We deposit on the semi-weekly schedule and file Form 941. Because of this, the IRS may send a notice that says you’re a monthly depositor. It may also confirm that you file Form 941 instead of Form 944. These notices are for your information only. You do not need to change anything in Gusto.
Unemployment tax rate change: Update your rate in Gusto before the effective date (to help avoid penalties).
Here’s how we handle taxes based on when you make the update:
Before the effective date: We’ll apply the new rate to payrolls with a check date on or after the effective date.
Mid-quarter with a backdated effective date: We’ll reconcile at the end of the quarter so your quarterly payments use the new rate.
The effective date was before the current quarter started: We may have withheld taxes incorrectly for prior quarters. Contact the agency to resolve any balances or credits.
We’ll adjust for the current quarter during our end-of-quarter reconciliation.
Before you accept a credit (refund), confirm the rate change is the only reason for it.
Tax credit notices: If an agency says you have a tax credit, we need to know so we can apply it correctly. Upload the notice in Gusto and select Credit listed or refund check when asked what the notice is about. We'll review the notice and give you next steps, which could be:
Asking you to request the refund directly from the agency.
Applying the credits in Gusto. When this happens, we’ll use your tax credit to lower or clear the amount you owe for that period. If there is any credit left over, we will apply it to future filings.
Refund: If the agency owes you money, contact the IRS or state agency to confirm the details. Send the notice to Gusto before you cash the refund.
Be careful when you accept refunds. Errors can lead to penalties later if you need to return the money to the agency.
Refunds often happen when you overpay.
Amount due: Contact the IRS or state agency for more details and request an extension. Then send the notice to Gusto.
Reminder to file: The IRS or your state may send you reminders about quarterly tax forms. If we file the form for you, you can ignore the notice.
If the notice says something else, like a balance due, report the notice to us.
Inactive or closed tax account: If the agency says your account is inactive or closed and you no longer run payroll there, close the account in Gusto. This tells us to stop filing with that agency.
If you still run payroll in that state, contact the agency to learn how to reactivate the account.
If a deadline is coming up, contact the agency to ask for an extension or a hold on your account. Most notices list how to contact the agency.
You can also request more details from the agency to help speed up the time it takes to correct the issue.
Learn how to upload the notice in the Report and upload a tax notice to Gusto section. To learn what happens next and how long it takes, go to What happens after you report a tax notice.
If you’re unable to make updates in Gusto, do not understand a notice, or see missing payments or balances owed, you can report it to Gusto.
Upload a clear scan, screenshot, or photo of the notice from the agency. We need a copy of the notice to look into it. You can upload:
A paper notice the agency mailed you
An email from the agency
A notice or detailed screenshots from your online account with the agency
If the agency emailed to say you have a new notice in your online account, sign in to the agency’s website. Download the notice, then upload that file.
If the agency called you but did not send a notice, ask the agency to send it to you in writing. Then upload it.
Include all pages, but upload them one at a time.
If you have more than one notice, upload them individually.
Supported file types: PDF, XLSX, DOCX, RTF, EML, MSG, MHT, CSV, TXT, ICO, JPEG, JPG, PNG, TIF, TIFF.
To report and upload a tax notice from your web browser:
Go to Taxes & compliance.
Click Report a notice.
Choose the agency the notice is from (search by name or scroll by state).
Select what the notice is about from the dropdown menu.
Click Continue and fill out the requested details.
Click Submit.
Click Upload.
Add any thoughts you’d like to share.
Click Send.
To report and upload a tax notice in the Gusto mobile app:
Open the Gusto mobile app and sign in.
In the bottom-right corner, tap More.
Tap Taxes & compliance.
Scroll down to Tools and find Report a notice. Tap Get started.
Choose what agency the notice is from (search by name or scroll by state).
Select what the notice is about from the dropdown menu.
Tap Continue.
Fill out the requested details.
Tap Submit.
Tap Upload to attach a photo or scan of the notice.
(Optional) Add a note if there's anything you'd like us to know.
Tap Send.
After you submit it, we’ll email you to confirm we got it. A tax specialist will review your notice and email you with next steps. Learn what happens next and how long it takes.
We only have authorization to file and pay taxes for you starting the quarter of your first check date (different from the related pay period). If the notice is for an earlier time, we cannot help with it.
To find your first check date in Gusto:
Go to Reports.
Scroll until you find Paystubs.
Use the Choose a check date dropdown and scroll to the bottom.
What you can do:
Ask your previous payroll provider for help.
Contact the agency that sent the notice.
Talk to a CPA for advice.
If you do not have one, check out our CPA directory.
After you report a tax notice in Gusto, we email you status updates. You do not need to do anything else unless your tax specialist asks for more information.
Confirmation: We’ll email you to confirm we got your notice. The subject starts with “We got your notice for” and your company name. The email lists the agency and the tax period.
Delay update: If our review takes longer than usual, we’ll send another email with the same subject. It lets you know we’re still working on it.
Findings and next steps: Your tax specialist emails you to explain why you got the notice and what to do, if anything.
If you reported more than one notice, you’ll get a separate email for each one.
We typically assign a tax specialist to your case in 4 – 6 weeks. If you have Priority support, we typically assign one within 1 week.
Resolving notices often takes time because we need to coordinate with tax agencies.
Contact the agency to ask for an extension or a hold on your account. A hold can pause collection actions and stop penalties for a set time while we work on the issue.
Our tax specialists do not take inbound calls because they often work directly with tax agencies. To ask a question or request a call, reply to the email your tax specialist sent you.
If a deadline is close and a specialist has not emailed you yet, contact us.
You may get a tax notice if there’s a problem with filing or payments. If we told you we could not file or pay for you, there are several possible reasons why. Tax agencies sometimes do not explain why our attempted filings or payments were unsuccessful.
To resolve the issue, you’ll need to contact the tax agency directly for details and instructions.
Sometimes tax filings or payments fail because the agency cannot verify your information.
Use the sections below to find common reasons and how to fix them. You may need to contact the agency, since there may be more than one issue.
Here are some common reason for failed failings:
Inactive tax accounts
Your state tax account may become inactive when:
You do not file required returns
You file several “zero” returns in a row
The account is set to start in the future
If your account is inactive, contact the agency to learn how to reactivate it. Each state has different rules.
Incorrect effective date
The effective date on your state account must be on or before the start of the quarter when we first tried to file and pay your taxes.
Invalid account number
Your account number in Gusto must match the one the agency has. Two issues can cause failures:
The number in Gusto does not match the agency’s record
You have the right number but the wrong account type
How to fix it:
Call the agency to confirm your account number and account type.
Check your number in Taxes & compliance → Tax setup in Gusto.
Be careful when updating an account number after filings have happened. This can cause tax issues. (We offer reports that can help you correct past problems.)
Company name or address mismatch
If your company name or address in Gusto does not match the agency’s record, filings can fail.
Call the agency to confirm what they have on file
Check your details in Company profile → Company details in Gusto
FEIN mismatch
A mismatch between your FEIN in Gusto and the agency’s record prevents the agency from verifying your account.
How to fix it:
Call the agency to confirm your FEIN
Check your FEIN in Taxes & compliance → Tax setup
FEIN changes can cause tax issues, so we may need to help.
To contact us, sign in to your Gusto account and click the help icon in the top-right corner of the page.
Authorization problems (TPA or PoA)
Some states require Third-Party Authorization (TPA) or Power of Attorney (PoA) before we can file for you.
Make sure:
Our authorization date starts on the first day of the quarter when you ran your first payroll in that state. You can find your first payroll date in Pay → Pay history
Gusto is listed as authorized to file and pay on your behalf. Check your state’s TPA rules in the state tax registration section of our Help Center.
Previous payroll provider still listed
If your old payroll provider is still listed as your “reporting agent,” the agency may ignore our filings. Contact the agency or your old provider to remove them.
You can use this script when you speak to the agency:
“Hi, this is (your name) from (your company). Our FEIN is XX-XXXXXXX.
My payroll provider, Gusto (formerly ZenPayroll), received an error when trying to file for us. I’d like to fix this. I need to check:
Is my account active?
Is my effective date correct?
Does my account number match your records?
Do my company name and address match?
Is the FEIN you have the same as what Gusto has?
Is Gusto listed as my authorized provider?
Is my previous provider still listed as the reporting agent?”
If your account is inactive because you no longer run payroll in that state, close the account and let us know.
After you resolve the issue with the agency:
Sign in to your Gusto admin account.
On your Home page, click the to-do notification about the filing or payment error. The to-do will stay in Gusto until the issue is fully fixed.
You can also go to Taxes & compliance > Tax documents > Needs attention to view the notification.
If we asked you to let us know and no to-do appears, contact us.
Update the account number or mark the issue as resolved.
Make sure the issue is fully resolved. If filings continue to fail, and you have three failed attempts, you'll need to file taxes outside of Gusto.
Once the issue is fixed:
We usually refile within 2 weeks.
You will not see a separate form in Gusto; refilings show under the original filing.
You can confirm success by checking your agency portal or contacting the agency. If no new notifications appear in Gusto, the refiling most likely worked.