What to do if you get a tax notice from an agency

The IRS or state agencies might send your company notices about withholding or unemployment taxes. Most of these notices can be actioned by checking or updating your settings in Gusto.

Reminder: Agencies do not send notices to Gusto directly. Be sure to read and act on any notices before the deadline or effective date.

What you can do on your own

If the notice is about a change to your deposit schedule or unemployment tax rate, you can update it in Gusto without help:

Change your federal deposit schedule
- As a reminder, we'll default to depositing on the faster semi-weekly schedule to prevent late tax payments, penalties, and tax delinquency notices.
Change your state deposit schedule
Update your unemployment tax rate

For other changes to federal or state details, follow the steps in this article. You can also click How to read and handle tax notices to learn more about the notice you received and what steps to take.

When to report a notice to Gusto

If you cannot fix (or action) the notice yourself.
If you’re not sure what the notice means.
If the notice shows a missing payment or balance owed.

Learn how to upload the notice below.

How to read and handle tax notices

Here’s how to understand and act on common notices, like refunds, amounts due, rate changes, and more.

Step 1: Identify the notice

Check if it’s from the IRS or a state agency (the name is usually at the top).
Make sure the agency is supported by Gusto.
- If it’s not, you’ll need to handle it outside of Gusto. Work with your previous payroll provider or tax professional.
Confirm if Gusto was your reporting agent during the time period listed on the notice.
- Gusto’s filing starts the quarter of your first check date with Gusto (different from the pay period).
- Use the Reports section in Gusto to find your first check date. Scroll to the Paystubs tile, then click the Choose a check date dropdown and scroll to the bottom of the list.

Step 2: Verify the details

Check that the information on the notice matches what’s in your Gusto account:

Company name
Company address
Deposit schedule
Tax rate
Account ID/EIN

If anything is wrong, update it in Gusto right away.

Step 3: Determine what the notice is about

Deposit schedule change: Update your deposit schedule in Gusto. Make sure to take note of the effective date (to avoid penalties).
- Change your federal deposit schedule
  - As a reminder, we'll default to depositing on the faster semi-weekly schedule to prevent late tax payments, penalties, and tax delinquency notices.
- Change your state deposit schedule
Unemployment tax rate change: Update your rate in Gusto before the effective date (to help avoid penalties).
- Here's how taxes will be handled based on when you make the update:
  - Before the effective date: Gusto will apply the new rate to payrolls with a check date on or after the effective date.
  - Mid-quarter with a backdated effective date: Gusto will reconcile at the end of the quarter to make sure correct quarterly payments are made based on the new rate.
  - The effective date was before the current quarter started: Taxes may have been withheld 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.
    - Do not accept any credits (refunds) without first confirming the rate difference is the only reason for the refund.
Refund: If you’re owed money, contact the IRS or state agency for confirmation and details. Send the notice to Gusto before cashing the refund.
- Be careful when accepting refunds, errors can lead to penalties later if the money needs to be returned to the agency.
- Refunds are commonly caused by overpayments.
Amount due: Contact the IRS or state agency for more details and request an extension, then send the notice to Gusto.

Step 4: Review notice deadlines and request extensions

If a deadline is coming up, contact the agency for an extension or hold on the account (most notices include agency contact information).

You can also request additional details from the agency to help speed up the time it takes to correct the issue.

Step 5: Send the notice to Gusto (if you cannot handle it on your own)

Learn how to upload the notice below. Generally speaking, a tax specialist will be assigned to your case in:

Most customers: 4–6 weeks
Customers with Priority support: Usually within 1 week

If a deadline is coming up, contact the agency for an extension or hold on the account.

Report and upload (or scan) a tax notice to Gusto

If you cannot make updates in Gusto, do not understand a notice, or see missing payments or balances owed, here’s how to report it to Gusto:

Go to Taxes & Compliance and select Overview.
Under "Quick Links", 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 to send it to Gusto.

We’ll review the information and give you next steps.

If the notice is from before you joined Gusto

Gusto only has 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.
Click the Paystubs tile.
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.

We may need to take a look at the notice

If we need to see the notice, upload a high-quality scan, screenshot, or photo of 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.

Once submitted, the notice will be added to our queue. We’ll review it as soon as we can and email you with the next steps. If you have any questions about the email, ask your tax specialist for clarification or ask for a call from them.

Important reminders

Upcoming deadlines
- If a deadline is coming up, contact the agency for an extension or hold on the account. You can also request additional details from the agency to help speed up the time it takes to correct the issue.
  - Holds can pause any collection actions and stop penalties for a certain timeframe while we work to resolve the issue.
Fixing tax issues takes time
- Resolving notices often requires coordination with tax agencies, which can take time. We'll work to get your case assigned and reviewed as soon as possible.
Our tax specialists are not available for inbound calls—they're frequently working with the tax agencies directly.
- Once a tax specialist has emailed you about your case, you can request a call back from them in their email to you.

Tax notices may happen if there’s a problem with filing or payments. If Gusto 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 did not work.

To fix it, you’ll need to contact the tax agency directly for details and instructions.

Common reasons for failed filings or payments

Review the common reasons below, and work with the agency to fix all issues—there could be one or several.

Common reasons for failed filings or payments

Inactive accounts
- Your state tax account might become inactive if:
  - No tax returns are filed.
  - You file multiple "zero" returns in a row.
  - The account is set to activate in the future.
- If your account is inactive, contact the agency to learn how to reactivate it. Rules for reactivation can vary by state.
Incorrect effective date
- The effective date should be on or before the start of the quarter when Gusto first tried to file and pay for you.
Account number not valid
- The account number in Gusto might not match the one given by the state agency.
- You could have the right number but the wrong account type for filing and paying taxes. Here's what to do:
  - Call the agency to confirm your account number and type.
  - Check the number in Gusto under Taxes & Compliance > Tax Setup.
- Be careful if you update an account number after filings happen—this can cause tax issues. Learn how to pull reports in Gusto that can help you correct any historical tax issues related to tax account number updates.
Company name or address mismatch
- The company name or address in Gusto might not match what the agency has.
  - Call the agency to confirm the name and address they have on file.
  - Check what’s in Gusto by going to Company > Company details.
FEIN mismatch
- The FEIN in Gusto might not match what the agency has, so the account cannot be verified.
  - Call the agency to confirm the correct FEIN for your account.
  - Check what’s in Gusto under Taxes & Compliance > Tax setup.
- If you need to update your FEIN, contact us from the Help section—there might be tax issues we need to help with.
Third Party Authorization (TPA) or Power of Attorney (PoA) effective date issue
- Confirm with the agency that Gusto's TPA starts on the first day of the quarter with your first check date in that state (that was processed with Gusto).
  - To check the first check date, go to Pay > Pay history in Gusto to find the first payroll in that state.
- Make sure Gusto is authorized to file and pay for you.
Previous provider still listed as reporting agent
- If your old payroll provider is still listed as the reporting agent, it can block Gusto from filing for you. Contact the agency or your previous provider to remove them from your account.

Speaking with 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:"

Make sure the account is "active".
- If your state account is inactive due to no longer processing payroll in that state, close your account with the agency and let Gusto know.
Review the "effective date" on the account.
- This should be the beginning of the first quarter when you have a check date in Gusto for that specific state.
Confirm your account number matches what is listed in Gusto.
- Find what’s on record in Gusto in the Taxes & Compliance section by clicking Tax setup and scrolling to the applicable state headline.
- If you edit a tax account number after payments or filings have already been made, there may be tax implications. Learn how to pull reports in Gusto that can help you correct any historical tax issues related to tax account number updates.
Confirm your company name and filing/mailing address in Gusto matches what the agency has on file.
- Find what’s on record in Gusto by clicking the Settings section and toggling to Company details.
Make sure the FEIN on file with the agency is what Gusto has on record, so the account can be verified.
- Find what’s on record in Gusto in the Taxes & Compliance section by clicking Tax setup.
If required, make sure that Gusto has Third Party Authorization (TPA) or Power of Attorney (PoA)—the effective date should be on or prior to the first date of the quarter(s) in question.
- In the state tax registration section of the Help Center, go to the applicable state article and check for state and agency-specific TPA info.
Make sure a previous service provider isn't still listed as your reporting agent on the account.
- If a previous provider is still listed as the reporting agent it may override Gusto's attempts to obtain access and successfully file. Work directly with the agency and/or previous provider to remove them from the account.

Let Gusto know the issue is fixed (after working with the agency)

Sign in to your admin profile in Gusto.
On your Home page, click the to-do notification about the filing or payment error.
- The to-do notification will stay in Gusto until the issue is fully resolved.
Click Edit next to the state field to update the account number (if needed) or mark the issue as resolved.
- Be sure the problem is actually fixed—if not, filings may fail again. After three failures, you'll need to file taxes yourself outside of Gusto.

What happens next

We'll usually refile your return within 2 weeks. If it works, you will not hear anything—no news is good news.

A few reminders:

Refilings only happen after all original filings are completed.
Refilings will not show as separate forms in Gusto; view the original filing.
You can check if the refiling was successful by logging into your agency portal or contacting the agency directly.

If no new notifications appear, the refiling likely worked.