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The State of Delaware Division of Revenue currently has two payment options available for the Electronic Funds Transfer of Withholding, Corporate Tentative and “S” Corporation Estimated Tax Payments. The payment options are ACH Debit and ACH Credit. The use of Fedwires is permitted only in an emergency, with prior approval.
Payment of Withholding, Corporate Tentative and “S” Corporation Estimated Taxes are currently being accepted for Electronic Funds Transfer. Payments for notices of assessment are required to be made by check, money order or cash.
Each entity liable for paying State of Delaware withholding tax is required to file its own individual withholding tax return and must file using its own Federal Employer Identification Number. Please do not make payments under one identification number and then issue Forms W-2/1099 or file Form W-3 for multiple identification numbers.
Corporation Requests for Extension, Forms 1100-EXT and 1100S-EXT, as well as, Corporate Final Returns are required to be filed and paid using the appropriate document with a check, money order or cash. Our payment system cannot accept payment of these taxes using Electronic Funds Transfer.
Mandatory Electronic Funds Transfer for Certain Withholding Agents
Senate Substitute No.1 to Senate Bill 281, mandates that any employer required under the Internal Revenue Code to deposit federal employment taxes by electronic funds transfer on or after January 1, 1996, must begin filing electronically for Delaware in 1997, or one year after the date the employer was required to file electronically for Federal Employment Taxes.
With this option, the taxpayer initiates a toll-free phone call to the State of Delaware’s Data Collector (Mellon Bank) at least one business day prior to the due date. This phone call authorizes the State of Delaware to electronically transfer tax payments from the taxpayer’s depository into the State’s account.
You provide the appropriate security and tax payment information necessary to complete the transaction. The bank will create an ACH debit to your account that evening for next-day settlement.
Upon successful completion of each electronic transfer, you will be given a verification code. This code should be noted as your record of having completed the call. You will not receive any additional written notice from our data collection service. The status of the transfer can be verified with your bank.
Because under the ACH Debit method the Division of Revenue originates the transaction, it also pays the cost for each transaction. Your bank may assess a nominal ACH debit receiving a charge, which will not be paid by the State of Delaware.
The Division of Revenue will supply the data collection service with basic information pertaining to the taxpayers participating as ACH Debit filers. This information includes (1) Bank Routing and Transit Number and (2) the bank account number you wish the debit to be processed against. For this reason you will be required to submit the proper banking documentation with the authorization agreement. The banking documentation may be one of the following: A voided check or a copy of a voided check, a completed micro spec sheet, or a letter from your bank verifying the bank account information.
Upon receipt of the completed ACH authorization agreement, the Division of Revenue, will mail an acceptance letter which will contain your location number and tax filing information. For security, you will be issued a unique six-digit security number, which will be assigned to you by the data collection service (Mellon Bank) and mailed to your company directly.
This option allows the taxpayer to initiate an ACH transaction through their depository, with the ACH Credit option, you initiate an ACH Credit to the state’s bank account for the amount of tax owed.
To initiate an ACH Credit Transaction, you must first contact your bank to determine the origination methods they offer, as well as, their costs. As the originator of these transactions, you will bear the cost.
The ACH Credit transaction is required to be submitted using the standard CCD+ format that has been developed for all states using the electronic collection of taxes.
TXP Addenda Format specifications, and the applicable bank account information will be mailed to taxpayers after the ACH Authorization agreement has been processed.
This option allows the taxpayer to initiate a Federal Reserve Wire Transfer for the amount of tax owed. This option is permitted only on an exception basis and in cases in which the ACH Debit or Credit option was tried and found unsuccessful. Fedwires are for emergencies only; approval is required prior to initiation.
Federal Reserve Wire Transfers are generally much higher in cost than the cost of an ACH Credit or Debit. The State of Delaware will not pay the cost of the Fedwires.
To participate in the EFT program, you must complete the Electronic Funds Transfer Authorization Agreement Form. Please be sure to include the appropriate banking documentation if you are selecting the ACH Debit payment option.
Mail the completed Authorization Agreement to the following address:
Please Note: To make an electronic payment for Franchise Taxes, visit the Division of Corporations’ e-Corp Online Filing site. For assistance or more information on Franchise Taxes, contact the Division of Corporations Franchise Tax Section at (302) 739-3077.