Quarter-end is the process of “closing-out” a fiscal quarter by reporting, filing, and making final tax payments. This article covers information on Quarter End and best practices to ensure Zeal is able to make timely filings on your behalf.
Terms to be aware of in this article:
- TPA - Third Party Administrator.
- EFT - Electronic Funds Transfer. A transaction that moves funds electronically between different financial institutions, bank accounts, or individuals.
- POA - Power of Attorney. A legal document allows someone else to act on your behalf.
- SUTA - State Unemployment Tax Act. A payroll tax used to help fund state unemployment benefits. Depending on the state, it may also go by another name, e.g. State unemployment insurance (SUI) Reemployment tax.
Quarter-end also unveils many parts of the payroll process where correction is needed for employers. Some aspects of this correction will include:
- Issues related to late filings or payments due to an employer’s timeliness:
- Registering for tax IDs
- Conducting notarizations on POAs
- Granting POA or EFT access
- Granting TPA access
Issues related to an employer’s SUTA rate where:
- Their SUTA rate changed mid-quarter
- They did not upload the correct SUTA rate
- They entered an incorrect SUTA rate
Employers misclassifying information:
- An employee marks an incorrect state
- Misclassified wages or deductions
Quarter End Best Practices
Zeal prescribes best practices to follow 2 weeks before quarter-end, and 4 weeks after quarter-end.
2 weeks before quarter ends:
For Offerers:
- Send a friendly reminder email to your clients summarizing missing Tax IDs, Notarizations, and TPA Agent access commands they are missing.
- Utilize Zeal’s alerts API to pull a full summary of everything that is missing to give employers a shortlist.
You can also simply direct your clients to their white-label tax component to review their missing IDs.
- Keep in mind that tax agencies take time to process ID registrations (1-8 weeks) so your end-employers might not receive their IDs in time for timely quarterly-filing.
For Owners:
- Double check your Tax Setup page and register for all missing IDs and handle resolving them immediately.
- As an Owner you likely will have several rounds of taxes to go through:
- Prioritize your State Income Tax and State Unemployment taxes first
- Proceed in registering for locals afterwards
4 weeks after quarter end:
For Offerers:
- You should expect your employers to get a surge of tax correspondence letters at the 4-week mark alerting them of any missing filings or payments.
- When your employer reaches out to you with these letters it’s imperative to direct them to submit all of their tax information immediately:
- Tax IDs
- Notarized documents
- Power of Attorneys
- TPA Access immediately
For Owners:
- You should expect your employers to get a surge of tax correspondence letters at the 4 week mark alerting them of any missing filings or payments.
Zeal’s Quarter End Extension Policy
Zeal will help employers process late filings and payments up to the 15th of the 2nd month in a new quarter (approximately 45 days).
If Zeal does not receive correct IDs, rates, or authorizations by the quarter-end extension cutoff date:
- We will refund the employer taxes that were collected during the quarter
- We will not make the filing for the employer
- The employer will be responsible for handling their own payments, filings, and amendments
We recommend that clients using the Offerer Model communicate the 1st day of the 2nd month in a new quarter as their quarter-end policy, to ensure employers are moving swiftly in their registration process
Late payments and filings
Before Zeal’s quarter-end extension date:
- As long as the employer submits correct tax information and authorizations to Zeal by the 15th of the 2nd month in a new quarter, Zeal will process late filings and payments.
- Zeal will process late payments and filings on a rolling basis dependent on the client’s timeliness to enter information.
- As outlined in the Terms and Conditions, Zeal is authorized to debit the employer's bank account with any penalties or interest needed to process payroll.
After Zeal’s quarter-end extension date:
After the quarter-end extension cutoff date, Zeal will no longer be responsible for processing late filings and payments for the prior quarter. Zeal will refund all withheld tax money by the last day of the second month in the new quarter, back to the employer.
The employer will need to take necessary actions in order to process these payments on their own:
- The employer must provide the following information into Zeal’s system to ensure issues don’t occur in future quarters:
- Registration for pending IDs
- POA submissions
- Notarized documents
- Grant TPA access
- The employer should download their quarterly reports from the Reports Page in their employer dashboard or access quarterly reports from the API.
For filing
- The employer should log-in to their respective tax agency website and find the filing tab.
- The employer should read the quarterly report and manually key in each field required for the manual filing.
- It is imperative that the Employer conduct the manual filing process prior to the payment process, as tax agencies sometimes list a high, erroneous amount of tax liability instead of the accurate amount.
For payment
- After filing is done, the payment tab on the employer’s tax portal will instruct them to pay a calculated amount.
- This should be the total of the taxes withheld, along with any penalties or interest.
Updated