Items To Note

Electronic deposit requirement. Certain employers are required to make deposits of employment taxes using the Electronic Federal Tax Payment System (EFTPS). If you are required to use EFTPS and fail to do so, you may be subject to a 10% penalty. See Circular E for more information.

If you are not required to use EFTPS, you may participate voluntarily. To enroll in or get more information about EFTPS, call 1-800-945-8400 or 1-800-555-4477.

Electronic submission of Forms W-4, W-4P, W-4S, W-4V, and W-5. You may set up a system to electronically receive any or all of the following forms from an employee or payee:

• Form W-4, Employee's Withholding Allowance Certificate
• Form W-4P, Withholding Certificate for Pension or Annuity Payments
• Form W-4S, Request for Federal Income Tax Withholding From Sick Pay
• Form W-4V, Voluntary Withholding Request
• Form W-5, Employee's Advance Earned Income Credit Certificate

If you establish an electronic system to receive any of these forms, you do not need to process that form in a paper version.

For each form that you establish an electronic submission system for, you must meet the following requirements:

1. The electronic system must ensure that the information received by the payer is the information sent by the payee. The system must document all occasions of user access that result in a submission. In addition, the design and operation of the electronic system, including access procedures, must make it reasonably certain that the person accessing the system and submitting the form is the person identified on the form.
2. The electronic system must provide exactly the same information as the paper form.
3. The electronic submission must be signed with an electronic signature by the payee whose name is on the form. The electronic signature must be the final entry in the submission.
4. Upon request, you must furnish a hard copy of any completed electronic form to the IRS and a statement that, to the best of the payer's knowledge, the electronic form was submitted by the named payee. The hard copy of the electronic form must provide exactly the same information as, but need not be a facsimile of, the paper form. For Forms W-4 and W-5, the signature must be under penalty of perjury, and must contain the same language that appears on the paper version of the form. The electronic system must inform the employee that he or she must make a declaration contained in the perjury statement and that the declaration is made by signing the Form W-4 or W-5.
5. You must meet all recordkeeping requirements that apply to the paper forms.

For more information, see:

• Form W-4--Regulations section 31.3402(f)(5)-1
• Form W-5--Announcement 99-3 (99-3 IRB 15)
• Forms W-4P, W-4S, and W-4V--Announcement 99-6 (99-4 IRB 24)

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