The Electronic Federal Tax Payment System (EFTPS) is a secure platform that allows businesses, individuals, and tax professionals to submit tax payments to the Internal Revenue Service (IRS) digitally.

The free-to-use system was introduced in the 1990s by the Department of the Treasury to replace paper-based payment methods, simplifying the tax-paying process and improving the efficiency of tax collection across the United States.

Here are some of the key features of the EFTPS:

  • Businesses can schedule tax payments up to 120 days in advance, whilst individuals can schedule up to 365 days in advance.
  • Taxpayers have the flexibility to change or cancel an EFTPS payment at any time before the due date. 
  • Taxpayers can access the system 24/7 from any internet-connected device.
  • Taxpayers can track each payment and receive email notifications.
  • Taxpayers can view up to 15 months of verified payment history. Each transaction includes a confirmation number, payment amount, tax type, and processing date. 
  • In addition to the online system, taxpayers can make payments by calling the EFTPS’s voice response system.

Enrollment Process

To access the EFTPS, taxpayers must enroll online or via phone. You will be required to provide your Taxpayer Identification Number (EIN or SSN) and a valid United States mailing address. You will then need to nominate a suitable bank account for ACH debit payments.

Following this, you will receive a personal identification number (PIN) in the post, usually within 5-7 business days. After receiving your PIN, you must create a password to gain full access to the EFTPS.

What Tax Payments Can Be Made Through EFTPS?

The EFTPS is highly convenient because it supports a wide range of tax payments, including:

Estimated Taxes

Estimated tax payments are those due to the federal government quarterly for individuals and entities with regular earnings that are not subject to federal tax withholding.

The IRS sets payment dates for estimated tax in January, April, June, and September.

Payroll Taxes

Payroll taxes are due even more frequently than estimated taxes, usually monthly or semi-weekly, depending on what option the human resources (HR) professional selected at the beginning of the calendar year.

The convenience of online payments through EFTPS alleviates much of the administrative burden for HR professionals.

Corporate Taxes

Corporations are required to use the EFTPS system, as filing their taxes by mail is now seen as risky and inefficient. 

The EFTPS’s advanced scheduling feature ensures yearly corporate taxes are paid on time, helping corporations avoid compliance issues and the threat of possible fines and penalties.

Self-Employment Taxes

Self-employed individuals are generally required to file and pay both quarterly and annual tax returns. They’re responsible for self-employment taxes (Social Security and Medicare) and income taxes.

While individuals can pay self-employment taxes by mail, the EFPTS is much more efficient. The system also enables self-employed individuals to easily adjust their scheduled payments if their income fluctuates throughout the year.

Excise Taxes

Excise taxes are those charged on certain goods, services, and business activities. These are typically required for businesses that handle imports, as well as manufacturers and retailers. However, in some cases, individuals may also pay excise taxes.

Excise taxes are often due on a semi-monthly basis, so using the EFTPS is much more practical than paying these taxes by mail.

EFTPS vs. IRS DirectPay

The EFTPS should not be confused with IRS DirectPay, which is a system designed solely for individual tax payments. DirectPay does not accept payments from business owners who file a tax return separate from their personal tax returns, and it caps each payment at $10 million.

IRS DirectPay lacks advanced scheduling options, historical tracking, and multi-tax support. However, unlike EFTPS, Direct Pay does not require enrollment or a PIN.