Positive Pay - Sandler*Kahne Software, Inc.

Appendix H - Tax PaymentsExplained (EFT, EFTPS and State)The Electronic Federal Tax Payment System (EFTPS) has been put into place toallow (require) businesses to make their tax deposits electronically. IRSregulations require businesses that paid at least $50,000 in payroll taxes during1995 (approximately 1.2 million businesses) to pay all federal taxeselectronically through EFTPS. These taxpayers affected are required to enrollby July 1, 1997. In future years the requirements become more stringent.Contact the IRS to determine when your business might need to come intocompliance.The ACH Credit payment method is used in this software. With ACH Credit,the taxpayer, by contacting their financial institution, initiates their electronictax payment.The taxpayer transmits their federal tax payments to one of two designatedfinancial agents:First Chicago is used if the taxpayer makes their deposits at a financialinstitution in one of the following states (northern US): AK, CA, CO, CT, DE,HI, IA, ID, IN, IL, KS, MA, ME, MI, MN, MO, MT, ND, NE, NH, NJ, NY,OR, RI, SD, UT, VT, WA, WI, WY.Nationsbank is used if the taxpayer makes their deposits at a financialinstitution in one of the following states (southern US): AR, AL, AZ, DC, FL,GA, KY, LA, MD, MS, NC, NM, NV, OH, OK, PA, SC, TN, TX, VA, WV.First Chicago NationsbankTransit/Routing Number: 071036210 061036000Account Number: 04236036 23401009Taxpayer Enrollment/Helpline (800) 945-8400 (800) 555-4477Note that for State Tax Payments, your state will instruct you as to whatfinancial institution shall receive the tax payment.You need to set up a vendor in Solomon for your designated financial agent. InAP EFT you will add that vendor as an EFT Vendor (Vendor Banking Entry)and enter them with the entry class of Tax Payment - CCD+. This will be theonly vendor you will set up with this entry class. Your tax payments will bevouchered against this vendor, and then processed through AP EFT just like anyother voucher. See Tax Payment Codes (DD.280.00) for further explanation.Before you send your first “live” tax payment you should send what is called a“zero dollar” entry. This is the same as a pre-notification transaction, but the“zero dollar” terminology is used with the CCD+ entry class. By sending the“zero dollar” entry, and having it approved, you reduce your liability for failureto make your payment (due to a routing/account number entry error).Tax payments via ACH credit must be transmitted to your financial institution atleast one day prior to the tax due date. It is also important to verify your bank’sdaily ACH processing deadline.Note: information listed above is from NACHA’s 1997 ACH Rules.A/P Electronic Funds Transfer w/ Positive Pay Appendices • 21