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Level 1

Paying Payroll Liabilities by check instead of e-pay

I have been e-filing for years. For the next two months, I am paying payroll from a different checking account because of PPP loan money accountability necessitated that I open a separate checking account to pay out those funds. My e-pay is set up with my regular account, from which I will only pay the employer's portion of the taxes. The employee's withholdings will be paid by check from the new account until the funds are all spent and we return to the regular checking account to pay them. I understand that paying these funds through our bank is no longer an option. To where do I send the money (due 6/17/20) and what form should I use to do so.

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Best answer May 31, 2020

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Community Champion

Paying Payroll Liabilities by check instead of e-pay

You and every other misguided person are making way to much work for yourselves. What you "understand" is wrong.  There is nothing in the CaREs act mandating you use a second bank account for PPP funds disbursement.  The proof of what you spent is primarily the PAYROLL SUMMARY report, in addition you do not submit separate quarterly tax returns for this period. At most cancelled xhdcks, along with reports,prove what you spent. It is not that difficult to produce the summary report for an 8 week period. 

 

Paying all PPP expenses from your normal banking is STILL AN OPTION. And in no way would harm your application for loan forgiveness. Even paying all federal taxes in a single payment is not  problem since the payment itself is just a payment.

 

Log in to your eftps.gov account and you can add a second bank account to pay the feds. It has been this way for over a year but was not always so. Of course if you are not on Enhanced payroll but Full Service you do not have any option to submit payments on your own and would have to downgrade your subscription. 

 

If you choose to mail it in you may have trouble getting the payments properly applied. The IRS does not like mailed in payments. If you are required to pay electronically there is a chance you could incur a penalty. 

 

I do agree with everyone except the SBA, that employer taxes are a payroll cost and why the PPP loans cannot be used for employer FICA and FUTA but can for SUTA and 401k match is just crazy and evidence that nobody in Congress ever ran their own company.

 

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2 Comments
Highlighted
Community Champion

Paying Payroll Liabilities by check instead of e-pay

You and every other misguided person are making way to much work for yourselves. What you "understand" is wrong.  There is nothing in the CaREs act mandating you use a second bank account for PPP funds disbursement.  The proof of what you spent is primarily the PAYROLL SUMMARY report, in addition you do not submit separate quarterly tax returns for this period. At most cancelled xhdcks, along with reports,prove what you spent. It is not that difficult to produce the summary report for an 8 week period. 

 

Paying all PPP expenses from your normal banking is STILL AN OPTION. And in no way would harm your application for loan forgiveness. Even paying all federal taxes in a single payment is not  problem since the payment itself is just a payment.

 

Log in to your eftps.gov account and you can add a second bank account to pay the feds. It has been this way for over a year but was not always so. Of course if you are not on Enhanced payroll but Full Service you do not have any option to submit payments on your own and would have to downgrade your subscription. 

 

If you choose to mail it in you may have trouble getting the payments properly applied. The IRS does not like mailed in payments. If you are required to pay electronically there is a chance you could incur a penalty. 

 

I do agree with everyone except the SBA, that employer taxes are a payroll cost and why the PPP loans cannot be used for employer FICA and FUTA but can for SUTA and 401k match is just crazy and evidence that nobody in Congress ever ran their own company.

 

View solution in original post

Highlighted
Level 1

Paying Payroll Liabilities by check instead of e-pay

Thank you. It cleared things up a bit. The Exec. Director, who insisted on this new account (PPP), over my protestations because of this very nightmare possibility, still doesn't understand the problem he unnecessarily created. I forwarded your response to me on to him in hopes he will comprehend. In his defense, he is 91 and had recent heart surgery, so he's a bit fuzzy - although normally sharp. Unfortunately, when I try to explain how the payroll works (Enhanced) he can't understand. Somehow I'll have to convince him that I have to pay all of the liabilities together (employee and employer) and from the same account. He's insisting that the employer portion has to be separately because it's not forgivable (you addressed this gross inequity), thus his desire to pay from each account - meaning I would have to switch the account back and forth each time I wanted to deposit the with holdings!! Lord have mercy!

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