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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 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. 

  • 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.
  • Some notices will require help from Gusto.
    • 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.
      • [Concierge customers] A tax specialist is usually assigned to your case within 1 week.
      • [Core + Complete customers] A tax specialist is usually assigned to your case within 4-6 weeks.

Follow the steps below to help you understand what kind of notice you received and what additional action you can take to help expedite the time to resolution.

How to review your notice

  1. Identify if the notice is coming from the IRS or a state agency.
    • The agency name is usually listed at the top of the notice.
  2. Verify that the tax agency is Gusto-supported.
    • Check here for the list of agencies supported by Gusto.
      • If the agency isn’t supported, we’re unable to assist in the resolution and the notice should be handled outside of Gusto.
  3. Confirm whether Gusto was your reporting agent at that time by identifying the tax period listed on the notice.
    • Gusto’s authorization to file and pay on your behalf begins in the quarter that your first official check date with Gusto falls in. 
      • If the tax period is prior to your first check date in Gusto, or after your suspension/cancellation date with Gusto, you must reach out to the previous (or next) payroll provider for the specific time period for additional assistance.
      • ‘Check date’ is separate from the pay period or the date the payroll was processed. 
  4. Verify that all information listed on the notice matches what’s listed in your Gusto account.
    • This includes, but is not limited to:
      • Company Address
      • Deposit Schedule
      • Tax Rate
      • Account ID/FEIN
      • Company Name
    • If any of your account information is inaccurate, please update your Gusto account settings as soon as possible.
  5. Determine what the notice is about (i.e. rate change, deposit schedule update, late/missing penalty) and if any action is required.
    • If the notice is regarding an upcoming change to your deposit schedule or unemployment tax rate, you can make the requested change in Gusto without our assistance:
    • If you’re unsure what the notice is in reference to or are unable to make the updates in Gusto for any reason, please send all pages of the notice to support@gusto.com. Gusto’s tax specialists will help research and determine the next steps required to resolve the issue.
  6. Review any upcoming deadlines that may be listed in the notice.
    • If there’s an upcoming deadline that may pass before Gusto is able to assist, please contact the tax agency by phone or email to request additional information or to request an extension and/or hold on the account in the meantime. 
      • Most tax agencies will include contact information on the notice itself.
      • [Concierge customers] A Gusto tax specialist is usually assigned to your case within 1 week.
      • [Core + Complete customers] A Gusto tax specialist is usually assigned to your case within 4-6 weeks.

Common types of IRS notices  

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.

  • Make sure to note the effective date of the new schedule—it’s important to deposit your taxes on time to avoid penalties and interest. 
  • Follow the steps in the article to update your deposit schedule in your Gusto account.

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. 

  • If you’re unsure why the credit exists, reach out to the IRS directly for additional information. 
  • If you still have questions, before you request the refund or cash a refund check, send the notice in full to support@gusto.com for review.
    • Important: If an overpayment is refunded in error and the refund is accepted, the business may be liable for penalties and/or interest on the refunded amount in the event it needs to be paid back to the agency. 

Amount due 

If the notice contains an amount due:

  1. Call the IRS to request additional information or to request an extension and/or hold on the account in the meantime until Gusto can assist. 
  2. Send the notice in full to support@gusto.com so our tax specialist team is able to review and assist.   

Common types of state notices

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. 

  • If you’re unsure why the credit exists, reach out to the agency directly for additional information. 
  • If you still have questions, before you request the refund or cash a refund check, send the notice in full to support@gusto.com for review.
    • Important: If an overpayment is refunded in error and the refund is accepted, the business may be liable for penalties and/or interest on the refunded amount in the event it needs to be paid back to the agency. 

Amount due

If the notice contains an amount due:

  1. Call the agency to request additional information or to request an extension and/or hold on the account in the meantime until Gusto can assist.
  2. Send the notice in full to support@gusto.com so our tax specialist team is able to review and assist.