From time to time, you may get notices in the mail from the IRS and/or state agencies regarding your company’s withholding and/or unemployment tax accounts. Many of these notices can be resolved on your own by verifying and/or updating the settings in your Gusto account.
If the notice is regarding an upcoming change to your deposit schedule or unemployment tax rate, you can make the change in Gusto without our assistance.
If you need to edit other federal or state details, see our guidance in this article.
Important
Agencies do not send notices to Gusto directly so it’s important that you read and take action before any listed deadlines or effective dates of requested changes.
If you can't resolve the notice on your own, are unsure what the notice is in reference to, or the tax notice has a missing payment or balance owed, follow the steps in the Report and upload a tax notice in Gusto dropdown below.
Click How to review your notice to help you understand what kind of notice you received and what additional action you can take to help speed up the time it takes to resolve the issue.
Deposit schedule change
The IRS sets your deposit schedule for Federal Income Tax based on your previous deposit amounts during the ‘lookback period'. Your company will be assigned a semi-weekly or monthly deposit schedule.
If the IRS changes your schedule, they’ll send a notice to let you know.
Refund
An overpayment of taxes can result in a credit owed to your company. If this is the case, you’ll receive a notice letting you know.
Amount due
If the notice contains an amount due:
Deposit schedule change
Just like the IRS, if a state agency changes your State Income Tax deposit schedule they’ll send a notice to let you know. These generally come at the end of the year for the following year, but it’s good to always be on the lookout.
Some states will follow your federal deposit schedule and some will not. If your state has a separate schedule, you can update it by navigating to the 'State Tax Setup' section of your Gusto account and following steps 2-4 in this article.
Unemployment rate updates
Individual states will audit your company’s unemployment tax rate annually and decide if it aligns with your company’s history. If your unemployment tax rate changes, they’ll send a notice letting you know what the new rate is and when it will be effective.
Make sure to update the unemployment rate in Gusto before the effective date on the notice.
Refund
An overpayment of taxes can result in a credit owed to your company. If this is the case, you’ll receive a notice letting you know.
Amount due
If the notice contains an amount due:
If you can’t make the updates in Gusto, are unsure what the notice is in reference to, or the tax notice has a missing payment or balance owed, follow the steps below to report it to us.
Based on the information entered, we’ll provide some next steps.
Gusto’s authorization to file and pay on your behalf begins in the quarter that your first official check date with Gusto falls in–since we didn’t file taxes for you during that quarter, we can’t help with the notice.
Here are a few options you can take to move forward:
Upload a scan, screenshot, or high-quality image of the document. Make sure to include all the pages of your notice, but only one at a time. If you have another notice, report it separately.
Once submitted, it’s been added to our queue and we’ll review it as soon as possible. Some notices are more complicated than others—you can expect a response in a few weeks. After we review your notice, we’ll email you with next steps.
Notice: Unemployment Compensation Contribution Rate Notice for Calendar Year 20XX.
Issuing agency: The state department that’s responsible for collecting unemployment tax, which varies by state.
Action needed: Update the unemployment rate in your Gusto account. To do so, click the Update your SUI rate in Gusto dropdown of this article.
Please reference the table at the bottom of this article to find out if your particular notice has any special instructions in addition to the steps below.
Details: This notice is to inform you of a change to your unemployment rate and the day it will become effective—usually listed at the top. For example, it might say “Your employer contribution rate effective 01/01/2019 is 0.055555.”
To update your rate in Gusto:
What to expect after making a rate update in your Gusto account
If... |
Then... |
The rate was updated prior to the effective date listed on the notice. |
Gusto will withhold at the new rate starting on payrolls with a check date on or after the effective date you set in Gusto. |
The rate was updated mid-quarter with a backdated effective date. |
Gusto will run a reconciliation payroll at the end of each quarter to ensure the accurate quarterly payment is made based on the entire quarter’s applicable wages and new rate. |
The rate was updated successfully but the effective date listed is before the date that the current quarter began. Example: The effective date was January 1 but you did not update the rate in your Gusto account until April 15. |
Action needed: Call the agency directly to discuss potential account balances or credits resulting from previous quarters. Because your rate wasn’t updated, taxes may have been withheld incorrectly. To rectify for the current quarter, Gusto will run a reconciliation payroll. If there’s an amount due, pay it immediately to avoid additional penalties. If there’s an overbalance, make sure the rate discrepancy is the only reason for the credit before you request the refund. |
Note: After you’ve followed the steps above and contacted the agency, if assistance is still needed, you can send the notice to Gusto—agencies will never send these notices to Gusto directly.
If you see your notice on the table below, reference the special instructions column.
State |
ID Number |
Name of Notice |
Name of Agency |
Special Instructions |
California |
L1451909664 |
Notice or Contribution Rates and Statement of UI Reserve account. |
CA EDD |
Enter the rate listed next to “UI Contribution Rate.” ETT rates and SDI rates are automatically fixed in Gusto. |
Colorado |
UITL-3 |
Notice of Employer Liability and Unemployment Insurance Account Number |
Colorado Department of Labor and Employment |
Enter the rate listed as "Combined Rate.” |
Florida |
RT-20 |
Reemployment Tax Rate Notice |
Florida Department of Revenue |
Enter the rate listed as "Tax rate" in box 7. This tax rate is in decimal form, be sure to enter as a percentage when updating your Gusto account. |
Maryland |
DLLR/DUI 61 (REV 10//16) |
Experience Rate Notice |
State of Maryland Department of Labor, Licensing and Regulation |
Enter the rate listed as “Contribution Rate”. |
Minnesota |
11352507 |
Unemployment Insurance (UI) Tax Rate Determination |
Unemployment Insurance Minnesota |
This one is especially tricky! Add “Tax Rate for New Employers” + “Base Rate” to get your “Total UI Tax Rate.” |
New Jersey |
N.J.A.C 12:16-22.2 |
Unemployment Insurance Contribution Rate Calculation |
State of New Jersey Department of Labor and Workforce Development |
There are two rates that you’ll need to enter. 1. Final Unemployment Experience Rate listed on this notice is allocated to the unemployment and workforce funds. Use the percentage listed on the notice as "Final Unemployment Experience Rate” and enter it into the field that says “Experience Rate” in your Gusto account. 2. Your Disability tax rate is listed as "Final Disability rate" at the bottom of page. |
New York |
IA 97 (03-13) |
Notice of Unemployment Insurance (UI) Rate |
N.Y.S. Dept of Labor, UI Division |
Enter the rate listed as “U.I Rate.” Please do not enter the re-employment service fund rate in addition to the above, Gusto automatically calculates this. |
North Carolina |
NCUI 104 |
Unemployment Tax Rate Assignment |
North Carolina Department of Commerce Division of Employment Security |
Enter the rate located in the box called "Tax Rate for year shown above". |
Pennsylvania |
C-657 REV 08-16 |
Pennsylvania Unemployment Compensation (UC) Contribution Rate Notice for Calendar Year |
Pennsylvania Department of Labor & Industry |
Enter the rate listed as "Total Contribution rate". This tax rate is in decimal form, be sure to enter it as a percentage when updating your Gusto account. |
Texas |
Form C22U95(051012) |
Tax Rate Notice |
Texas Workforce Commission |
Enter the tax rate listed as “Effective Tax Rate” at bottom of table. |
Utah |
DWS-UI Form 45 rev:11/ |
[Year] Contribution Rate Notice |
Utah Department of Workforce Services Unemployment Insurance |
Enter the rate located in BOX J. This tax rate is in decimal form, be sure to enter it as a percentage when updating your Gusto account. |
This notice is to inform you of a change to your withholding tax deposit schedule and the day it will become effective—usually listed at the top.
For example: a notice might say “We determined your new deposit schedule for the new tax year."
Issuing agency
State or local tax agency responsible for collecting withholding income tax.
Action required
Determine the new withholding tax deposit frequency (e.g. semi-weekly, monthly, quarterly) and update it in your Gusto account.
Update a state or local tax deposit schedule in Gusto
Gusto defaults to depositing on the faster semi-weekly schedule in order to prevent late tax payments, penalties, and tax delinquency notices. Unless you've specifically asked Gusto to make your payments monthly, no action is needed.
If you specifically asked Gusto to deposit using the monthly schedule, you must contact us from the Help section of your account if the IRS changes your schedule to semi-weekly. If not done immediately, there may be penalties and interest assessed for late tax deposits–these would be the employer's responsibility to pay.
Notices are sometimes sent as a result of filing or payment errors. If Gusto notified you that we were unable to successfully file or make a payment on your behalf, this could be for a few reasons.
Unfortunately, tax agencies do not always provide a specific reason for the failed attempt(s) to file and pay. To fix the issue, you'll need to reach directly out to the tax agency for additional details and instructions. Agency contact information for your state can be found here.
Review each potential problem listed below, and ask the agency which issue might be causing the failed filing.
What to say to the agency
“Hi this is (your name) from (your company name) and our FEIN is XX-XXXXXXX. My payroll provider Gusto, formerly ZenPayroll, received an error message when attempting to file on my behalf—I would like to resolve this as soon as possible. I've got a few things I'd like to check to make sure the next time they file it’s successful:"
A good indicator a refiling was successful is no notifications or payroll blockers after ~14 days since the issue was “resolved” in Gusto.