Add or edit your federal and state tax details (for admins)

As a full-service payroll provider, we take care of your federal tax returns and deposits. To do this, we need to know the following:

• Federal Employer Identification Number (FEIN)
• Official company name on file with the IRS
• Company type

You can find this information 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 with your FEIN. It'll be assigned immediately when you register here.
4. Click Save. 
5. Click on the next step to continue with the setup.

In the future, you'll need to add your state and local payroll tax account numbers.

Federal tax deposit schedule reminder

We'll default your account to a semi-weekly deposit schedule, and the 941 form filing—this helps protect you from potential IRS penalties.

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

Based on your historical tax payments, the IRS will assign your company and 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 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 Support 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)

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)

As a reminder, we'll default to depositing on the faster semi-weekly schedule to prevent late tax payments, penalties, and tax delinquency notices.

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 do not see the option to schedule a future change, contact us from the Support section of your 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).

Learn how to edit a state or local payroll tax account number.

At the end of the year, state agencies may issue new deposit schedules (sometimes called filing frequencies) for the upcoming year. This means your company may need to deposit more or less frequently than in prior years, depending on your tax liabilities from prior year(s).

Let Gusto know about the tax deposit schedule change 

You can also follow these steps to review the schedules (filing frequencies) you've had in your account historically.

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" (or "Filing frequency").
   • If the ability to edit a deposit schedule or filing frequency does not exist, this means Gusto is handling the selection automatically, or you do not have any active employees in that state. 
     • 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 you believe Gusto is not depositing taxes on time, contact us from the Support section of your account. Or, upload the notice in Gusto, and we'll make sure you're set up correctly.
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 the notice—typically the beginning of the year (Jan 1). On rare occasion, it may be the beginning of another quarter (Apr 1, Jul 1, Oct 1).
   • Note: If you're making this update after the deadline listed on the notice, you'll be responsible for any penalties the agency applies to your account.
7. Click Save.

If you've entered the wrong deposit schedule, update this in your Gusto account as soon as possible by selecting Make a correction instead of Add a new schedule.

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're 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). 
     
     • Gusto does not amend unemployment returns for rate updates retroactively made for an already closed quarter—you can simply pay the agency any amount owed (if you've underpaid), or accept the refund (if you've 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 on the notice, agencies may assess penalties and/or interest for underpayments. These are the employer's responsibility to pay. 
     • Gusto does not amend unemployment returns for rate updates retroactively made for an already closed quarter—you can simply pay the agency any amount owed (if you've underpaid), or accept the refund (if you've overpaid).

If you need assistance adding a rate, please contact customer support from the Support 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.

Go 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, click the Taxes & Compliance section, select 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.

EFTPS and Gusto

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.

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

Your business will have your own unique PIN that you can use to log in to the EFTPS and view payments made to your account.

• Reminder: Gusto will never have the businesses personal EFTPS information, we use our own EFTPS Personal Identification Number (PIN) to login and make payments on behalf of your company.

When you sign up with Gusto, we'll re-enroll your company with EFTPS so we can pay and file your taxes (required). You may receive a letter with a new EFTPS PIN number after this happens.

Important

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. Both the IRS and Gusto recommend you periodically log in to EFTPS to monitor your account and make sure that tax payments are being made on time for you.

We make federal tax deposits to the IRS based on the company's federal tax deposit schedule set in Gusto— you can find this in your account by clicking the Taxes & Compliance section and selecting Tax setup. 

To see past payments made to the IRS, 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.