Payroll Tax Deposit Changes for 2011.

1. Dear Client,
We are writing to let you know that the IRS has just issued proposed regulations on the requirement to deposit by EFT
beginning in 2011.
The IRS has issued proposed regulations on new rules that will require business depositors to use electronic funds
transfer (EFT) for all federal tax deposits (FTDs), effective Jan. 1, 2011.
Beginning in 2011, the IRS is eliminating the system that enables the processing of FTD paper coupons. Accordingly,
the proposed regs require the use of EFT for all FTDs, effective Jan. 1, 2011.
The proposed regs do not change existing rules for determining a depositor's status as either a monthly or semi-weekly
depositor for employment taxes. They also do not change existing rules on whether a taxpayer can remit taxes with a
return in lieu of making an FTD. Generally, the de minimis rule for employment taxes allows employers with a deposit
liability of less than $2,500 for a return period to remit employment taxes with their quarterly or annual return, rather
than making a tax deposit.
The proposed regs would require federal tax deposits to be made by EFT for many different types of taxes, including:
(1) business estimated income/excise tax; (2) federal payroll tax withholding; (3) federal unemployment tax; (4)
railroad retirement tax; (5) taxes withheld on nonresident aliens and foreign corporations; and (6) nonpayroll taxes,
including backup withholding.
The regs are expected to be finalized by the end of 2010. The final regulations are expected to apply to remittances
made after the date that the final regulations are published in the Federal Register, but in no event earlier than Jan. 1,
2011.
If we can assist you in making this transition to electronic funds transfer (EFT), please contact our office. We are here
to help!
Morehouse Group
Certified Public Accountants
Post Office Box 1710
Dalton, Georgia 30722-1710
706.278.2713 (Phone)
706.226.2446 (Fax)
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