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FTD Goes Paperless

No, we aren’t talking about floral arrangements. The federal tax deposit system, or FTD,  is used to collect various taxes including employment taxes and corporate income tax. (It isn’t used by individual taxpayers filing their income tax returns, so they aren’t affected by this announcement.) The system has long accepted and encouraged electronic payments, and fewer than 10% of the payments are still made with old-fashioned paper coupons. Apart from being less efficient, the paper coupons account for a disproportionately large number of errors and penalties. Beginning next year paper coupons will be eliminated and all these deposits will have to be made electronically.

Posted August 20, 2010
Filed under Business Taxation, IRS Guidance, News

2 Responses to “FTD Goes Paperless”

  1. SIGGGYFREUD says:
    August 22, 2010 at 9:10 am

    Thanks for emphasizing that FTD does not affect individual taxpayers. The email I received from the IRS did not do this and left the impression that est tax payments could no longer be made with paper coupons.

  2. Kaye Thomas says:
    August 22, 2010 at 11:22 am

    In case anyone’s interested, here’s the official list, taken from the preamble to the proposed regulation, of taxes that are affected (including corporate estimated tax but not individual estimated tax):

    1. Corporate income and corporate estimated taxes pursuant to § 1.6302-1;

    2. Unrelated business income taxes of tax-exempt organizations under section 511 pursuant to § 1.6302-1;

    3. Private foundation excise taxes under section 4940 pursuant to § 1.6302-1;

    4. Taxes withheld on nonresident aliens and foreign corporations pursuant to § 1.6302-2;

    5. Estimated taxes on certain trusts pursuant to § 1.6302-3;

    6. FICA taxes and withheld income taxes pursuant to § 31.6302-1;

    7. Railroad retirement taxes pursuant to § 31.6302-2;

    8. Nonpayroll taxes, including backup withholding pursuant to § 31.6302-4;

    9. Federal Unemployment Tax Act (FUTA) taxes pursuant to § 31.6302(c)-3; and

    10. Excise taxes reported on Form 720, Quarterly Federal Excise Tax Return, pursuant to § 40.6302(c)-1.

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