What Is EFTPS?

What is EFTPS? EFTPS is an automatic fund transfer to pay taxes. [EFTPS stands for Electronic Federal Tax Payment System.] It's an automatic fund transfer. There is a requirement that if you are a...

[EFTPS stands for Electronic Federal Tax Payment System.]

It's an automatic fund transfer. There is a requirement that if you are a taxpayer of sufficient size (measured by the total amount of taxes paid, including payroll taxes, income taxes, etc), tax payments paid to the federal government during the year must be made electronically as opposed to cutting a check and sending it in the mail. Failure to comply with those rules once you pass certain thresholds can result in penalties being assessed for not making your payments via the Electronic Fund Transfer System.


The US government benefits by getting quicker tax payments, and the processing is much easier administratively to receive electronic transfers than to process handwritten checks.


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