Pilot Program Tests EFTPS Interface with QuickBooks

Since last July, Treasury has been testing an interface between Intuit’s QuickBooks Payroll product and the electronic federal tax payment system (EFTPS). Under the program, QuickBooks users can schedule or cancel tax payments and check their payment history, all within their QuickBooks software, instead of using the government’s EFTPS software.

Intuit claims that more than 1 million customers use its payroll software. According to Mark Stevens, director of the Tax Collection Division of Treasury’s Financial Management Service, Treasury does not know how many businesses made payroll tax payments through the QuickBooks interface, but during the first six months of the pilot program (July–December 2007), Treasury received 124,000 payments totaling $375 million through the QuickBooks interface. Stevens reports that this “exceeded any expectations we had at the beginning.”

The pilot program will continue through July 2008. Stevens says that Treasury is looking to expand the program after that and is currently having conversations with other vendors about integrating EFTPS interfaces into their software. According to Stevens, Treasury believes taxpayers who are currently comfortable with online banking and bill paying will be good candidates for online tax payments using a familiar software interface. “We know small businesses really have begun to fully integrate online banking and bill paying into their way of doing business,” he says. Yet many small businesses continue to pay their payroll taxes using paper coupons (some 37 million payments last year).

Although Intuit bundled the interface with its payroll software, EFTPS accepts all types of tax payments, and there is no reason why future partnerships could not allow for other types of tax payments, getting Treasury closer to its goal of having all payments made electronically.