Add or edit your federal and state tax details (as an admin)

As a full-service payroll provider, we take care of your employer federal tax returns and deposits. In order to do this, we need to know your Federal Employer Identification Number (FEIN), your official company name, and company type. You can find this info on form CP-575 from the IRS. 

1. During onboarding, click Step 5: Federal Taxes.
2. Click Add Federal Tax Details.
3. Enter your FEIN and company type.
   • Important: Do not use your Social Security Number (SSN) as your FEIN.
     • This is a common error for sole proprietors and other new employers. The IRS requires a FEIN once you've hired your first employee.
     • You'll need to register as an employer with the IRS and provide us your FEIN - it will be assigned immediately when you register here.
4. Click Save. 
5. Click on the next step to continue with the setup.

What's next? Please add your state and local payroll tax account numbers.

Note: We will default your account to a semiweekly deposit schedule and 941 form filing. If you would like to change these settings, you may do so by clicking the Company section and selecting Company details after your account has been set up.

If you need to change your state deposit schedule, learn how here.

Based on your historical tax payments, the IRS will assign your company a deposit schedule for tax payments (either semi-weekly or monthly) and they'll assign a specific payroll tax return to file–either Form 941 or Form 944.

How it works in Gusto

IRS deposit schedules

We'll default to depositing on the faster semi-weekly schedule in order to prevent late tax payments, penalties, and tax delinquency notices.

• Important: If you specifically instructed us 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.

IRS filing form (941 or 944)

In order to prevent late filings, we will file the quarterly Form 941 for:

• Existing customers
• New customers that run payroll with us in the first quarter (Q1) of each year

If you joined us after Q1, confirm which form the IRS assigned and set up your customer account using the IRS-assigned form requirement. 

The following year, we'll automatically file a Form 941 and you'll no longer need to confirm the requirement each year.

Update your federal filing form in your customer profile (to 941 or 944 if joining after April 1 in the current year)

1. Click the Taxes & compliance section and select Tax setup.
2. Under "Federal Tax Setup", click edit. 
3. Click Schedule a future change.
   • Note: If you don't see the option to schedule a future change, contact us from the Help section of your customer account. 
4. Select the Effective Date of the new filing form. 
5. Enter the future filing form change you have received on your IRS notice. 
6. Click Save. 

Additional detail about Form 944

The IRS allows certain small businesses to file annually on Form 944 instead of quarterly on Form 941. While this may seem like a benefit for small employers, the IRS may change your filing requirement mid-year which could result in notices and penalties if returns are late.

Filing more frequently (on Form 941) is a way to prevent that from happening, and it costs the same no matter how frequently we file (quarterly or annually).

 

If you need to update your account number, you'll need to contact us from the Help or Priority support section of your account—there may be tax implications if taxes have already been paid or filed to an incorrect account number.

At the end of the year, state agencies may issue new deposit schedules for the upcoming year, which would require your company to deposit more or less frequently than in prior years depending on your tax liabilities in prior year(s).

If you receive an updated deposit schedule, enter it into your Gusto account using the following steps. You can also follow these steps to review the schedules you've had in your account historically.  

If you don't see an option to update your schedule in Gusto, please send the notice to Gusto to confirm that you're set up correctly.  

1. Click the Taxes & compliance section and select Tax setup.
2. Click Manage Taxes under the applicable State Tax section.
3. Scroll to State Tax Settings and click edit next to Deposit Schedule.
   • If the ability to edit a deposit schedule does not exist, this means Gusto is handling the selection automatically.
     • We do this when we're depositing all taxes on the fastest tax deposit schedule—this prevents late tax deposits (available for select agencies only).
     • If for any reason you believe Gusto is not depositing taxes on time, you can let us know from the Help section of your account. 
4. Select to Add a new schedule—this is also where you can view past schedules you've had in your account.
5. Enter the schedule shown on the notice.    
6. Set the Effective Date to the effective date listed on your notice— typically it's the beginning of the current year (January 1). On rare occasion, it may be the beginning of another quarter (April 1, July 1, October 1).
   • Note: If you're making this update after the deadline listed on the notice, you will be responsible for any penalties the agency applies to your account.
7. Click Save.

If you've entered the wrong deposit schedule, please update this in your Gusto account as soon as possible by selecting Make a correction instead of Add a new schedule. The option to update your schedule will only be available in states where you currently have active employees. 

State agencies send out notices with your assigned state unemployment insurance tax rates—you'll get one when you first register your company as an employer with the unemployment agency in the state. 

• Some states may refer to the agency as a Department of Labor, Workforce, etc.
• You can learn more about SUI in this article.

You’ll also receive a new tax rate notice with each new year that includes your rate for the upcoming year. Depending on the state, these are often mailed out between November of the prior year through March of the effective year.

Add a new SUI rate

If you get a new rate assigned to you for the current or future periods, update your SUI rate in your company profile by following these steps:

1. Click the Taxes & compliance section and select Tax setup.
2. Click Manage Taxes under the applicable State Tax section.
3. Scroll to "State Tax Settings" and click edit next to "Unemployment Tax Rate"—this may also have other names like "SUI rate" or "Experience rate" based on the state.
   • Updating your rate only works in states where you currently have active employees.
   • Here you can also view the past rates you've had in your account.
4. Click Add a new rate.
   
   • If the rate you're entering was effective during an already closed quarter, and you're adding it after the quarter ended, you'll likely get a notice for taxes owed (if underpaid) or a refund (if overpaid).
5. Enter the number shown on the notice as a percentage rate.
   • For example: if your notice says you have a rate of .055555, enter 5.5555%.
     • For information about how to enter your rate correctly for your specific state, head to the state-specific registration article in this section of the Help Center.
       • Click the Register a company with state agencies or Find your account number and rate info dropdowns, scroll to the applicable unemployment section, and enter the rate(s) as detailed.
6. Set the "Effective Date" as the effective date listed on your notice.¹
   • In most states: the effective date will be January 1.
   • New Jersey, Tennessee and Vermont: there are a few states that change their rates mid-year and you should enter an effective date of July 1.
   • New Hampshire can change their rate effective any quarter so pay close attention to these rate notices. Enter:
     • January 1 if the rate takes effect for the period Jan 1 - Mar 31.
     • April 1 if the rate takes effect for the period April 1 - June 30.
     • July 1 if the rate takes effect for the period Jul 1 - Sep 30.
     • October 1 if the rate takes effect for the period Oct 1 - Dec 31.
7. Click Save.
   • Important: If the update is being made after the deadline listed on the notice, agencies may assess penalties and/or interest for underpayments. These are the employer's responsibility to pay. 

Correct your SUI rate or effective date and review rate history

Some tax agencies provide Gusto with "rate exchanges," and you may receive a notification that we’ve already updated your rate. This is a courtesy and is intended to help you pay the correct taxes each quarter. There may be circumstances when we are unable to confirm your current rate with a tax agency, and so your company must still confirm that the correct rates are in your company tax profile.¹

If you realize that you previously entered an incorrect rate or effective date, update the information in Gusto as soon as you have the correct information.

1. Click the Taxes & compliance section and select Tax setup.
2. Click Manage Taxes under the applicable State Tax section.
3. Scroll to "State Tax Settings" and click edit next to SUI Rate.
   • Updating your rate only works in states where you currently have active employees.
   • Here you can also view the past rates you've had in your account.
4. Click Make a correction. 
   • Before the end of each quarter, we'll run a reconciliation payroll to determine if there was a difference between the most up-to-date rate and a previously used rate. If there's a difference, we'll debit the company for the underpaid SUI tax amounts or refund the company for any SUI tax amounts that were over collected.
   • If the rate you're entering was effective during an already closed quarter, and you're changing it after the quarter ended, you'll likely get a notice for taxes owed (if underpaid) or a refund (if overpaid).
5. Enter the number shown on the notice as a percentage rate.
   • For example: if your notice says you have a rate of .055555, enter 5.5555%.
     • For information about how to enter your rate correctly for your specific state, head to the state-specific registration article in this section of the Help Center.
       • Click the Register a company with state agencies or Find your account number and rate info dropdowns, scroll to the applicable unemployment section, and enter the rate(s) as detailed.
6. Set the "Effective Date" as the effective date listed on your notice.1 
   • In most states: the effective date will be January 1.
   • New Jersey, Tennessee and Vermont: there are a few states that change their rates mid-year and you should enter an effective date of July 1.
   • New Hampshire can change their rate effective any quarter so pay close attention to these rate notices. Enter:
     • January 1 if the rate takes effect for the period Jan 1 - Mar 31.
     • April 1 if the rate takes effect for the period April 1 - June 30.
     • July 1 if the rate takes effect for the period Jul 1 - Sep 30.
     • October 1 if the rate takes effect for the period Oct 1 - Dec 31.
7. Click Save.
   • Important: If the update is being made after the deadline listed on the notice, agencies may assess penalties and/or interest for underpayments. These are the employer's responsibility to pay. 

If you need assistance adding a rate, please contact customer support from the Help section of your company account. 

1 Failure to timely update or confirm your State Unemployment Insurance rate may result in additional taxes and penalties being imposed on the taxpayer by the taxing authority or agency.

Once you've added a new state's address for an employee, we'll prompt you to enter that state tax information for the new state. Head to the state registration section of the Help Center and click the applicable state to learn how to register. Once you have your state tax account details, head to the Taxes & compliance section, click Tax setup, and scroll to the applicable state to enter your details.

For more information on this topic, check out our article on closing and reopening a state or local tax account.

General information

Note: Gusto does not have your EFTPS information. Read more about this below.

The electronic federal tax payment system (EFTPS) is the tax payment service provided by the U.S. Department of Treasury. Companies who are enrolled with EFTPS can:

• Make federal tax payments electronically and;
• Can monitor their tax payments on the EFTPS website.

The IRS considers employers responsible for the timely filing of employment tax returns and payment of employment taxes for your employees, even if you have authorized a third party to file the returns and make the payments. Therefore, the IRS and Gusto recommend that you periodically log in to EFTPS to monitor your account and make sure that tax payments are being made on time for you.

• State tax authorities generally offer similar means to verify tax payments. Contact the appropriate state offices directly for details—you can find agency contact information here. 

If you sign up with Gusto, we'll enroll your company in the EFTPS tax payment service—you may receive a letter containing a new EFTPS PIN number after this happens, even if you've already enrolled.  

• We have to enroll you again so Gusto has access to process your tax payments. 

While there is just one EFTPS account per business, Gusto uses our own EFTPS Personal Identification Number (PIN) to login and make payments on behalf of your company. Your business will have your own unique PIN which you can use to log into the EFTPS and view payments we've made on your behalf at any time.

Gusto will make your federal tax deposits to the IRS based on your company's federal tax deposit schedule, found by clicking the Taxes & compliance section and selecting Tax setup. To see past payments made, run an agency payments report.

Repaying deferred taxes from 2020

If your company deferred taxes through Gusto during 2020:

1. Make sure you're familiar with all the Gusto-specific resources you have to help.
2. Learn more about the agency notice you received and how to repay the taxes here—FAQs included. 
3. Repay the amounts to the IRS directly using the EFTPS.