Tax Notices: How to read and take action  

From time to time, you may get notices in the mail from the IRS and/or state agencies regarding your company’s unemployment rate and tax deposit schedule. Many of these notices can be resolved on your own by updating the settings in your Gusto account. Some notices will require help from Gusto. Here are some steps to take to help you understand what kind of notice you received.

Note: 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 get a notice regarding a missing payment or balance owed, please send the notice in full to support@gusto.com so our team of tax specialists can review.

Follow the steps below to help resolve the notice:

  1. Identify if the notice is coming from the IRS or a state agency.
  2. Read the notice from front to back.
  3. Determine what the notice is calling for (i.e. rate change, deposit schedule update, late penalty) and if any action is required.
  4. Identify the deadline and meet it. Missed deadlines may result in additional notices, penalties, or accrued interest.  
  5. (Optional) If you have questions, use the number on the notice and give the agency a call.

Common notices you might receive:

From the IRS

  • 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 schedule. If the IRS changes your schedule, they might send a notice at the end of the year to let you know. Make sure to note when your new schedule is effective—it’s important to deposit your taxes on time to avoid penalties and interest. Follow the steps in this article to update your deposit schedule in your Gusto account.
  • Refund: An overpayment of taxes will result in a credit owed to your company. If this is the case, you’ll receive a notice letting you know. If you’re unsure why the credit exists, reach out to the IRS directly for additional information. If you still have questions, send notice in full to support@gusto.com for review before you request the refund.
  • Amount due: If the notice contains an amount due, call the IRS for more information and send the notice in full to support@gusto.com for our tax specialist team to begin reviewing.   

From State Agencies

  • Deposit schedule change: Just like the IRS, if a state agency changes your State Income Tax deposit schedule they might 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 following the same steps listed in the previous article and navigate to the State Tax Setup section that you'd like to update.
  • 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. Follow the steps in this article to update your state unemployment rate in your Gusto account.
  • Refund: An overpayment of taxes will result in a credit owed to your company. If this is the case, you’ll receive a notice letting you know. If you’re unsure why the credit exists, reach out to the state agency directly for additional information. If you still have questions, send the notice in full to support@gusto.com for review before you request the refund.
  • Amount due: If the notice contains an amount due, call the state agency for more information and send the notice in full to support@gusto.com for our tax specialist team to begin reviewing.

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