Close a State Withholding or Unemployment Tax Account for Inactive Jurisdictions

When using the Premier Payroll service, the quarterly and annual federal, state, and local tax forms are filed by Premier Payroll. If the payroll user no longer maintains an employee or conducts business in a given state, both the tax agency and Payroll Operations must be notified.

When to close an account:

1. A good rule of thumb is that any account not active in the current calendar year should be closed if the payroll user does not expect to hire employees in that jurisdiction. 

NOTE: If the payroll user has not paid wages in a jurisdiction for a while, it is deemed not active.

 

Payroll users may close the account any time after all the payments and filings have been completed for that jurisdiction. If the account is closed before all payments and filings are complete, Ceridian will be unable to fulfill these requirements.  This includes the filing of annual tax returns, such as Form W-2 and FUTA Form 940.

 

 

Tax Agency Requirements and Processes:
1. Some states require $0 returns while others do not. Generally, as long as an account is open, the agency will expect returns because they have no way of knowing that a company no longer has employees. State tax agencies simply assume that a return is missing if a $0 return is not filed. Some agencies will assess non-filing penalties that they will not waive and for which the payroll user will be responsible. Other agencies will send tax notices for estimated tax due which they base on past filings.

 

Ceridian files 0 (zero) tax returns only for inactive jurisdictions in payroll.

 

2. Some agencies will close inactive accounts automatically.

 

3. There are agencies that can close and reopen accounts easily while some will issue a new account number once an account is closed out.

 

 

Action Required for Premier Payroll Users:

1. Payroll users can close the account by contacting the agency directly. Ceridian does not close agency accounts on tax returns. Premier payroll service can assist in providing agency links and phone numbers upon request.

 

Given the above agency requirements and processes, it is highly recommended that payroll users directly contact their respective tax agencies to discuss with them the best course to take. In addition, state tax agencies can help them in determining whether they will ever use the account again.

Some agencies require a phone call, others have a written form, and others allow employers to make this request on their website using their login information.

 

NetSuite and Ceridian cannot be responsible for penalties assessed on inactive employer accounts.

2. The payroll user should contact NetSuite Customer Support as soon as the account has been closed with the agency. This is to process closing of account at Ceridian.  Please make the following handy:

• The last day wages were paid or the day the payroll user stopped doing business in the jurisdiction (agencies have different terms for this).

NOTE: The inactive jurisdiction is still visible in the NetSuite interface even if the account has been closed at Ceridian.

 

3. If a payroll user hires employees in a jurisdiction that they previously closed, they should contact the agency before their first payroll is committed. Most agencies will reactivate the same account number for them very quickly.   Please contact NetSuite Customer Support to reactivate the jurisdictions at Ceridian.

4. To identify any inactive jurisdictions, users may customize Payroll Summary report to show zero amounts by navigating to: - Reports > Payroll > Payroll Summary - Click Customize button in the lower left corner - Filters: Date Range From 1/1/xx to 12/31/xx - On More Options, select Report Options = Show Zeros - Select Preview to just run the report or Save to create a saved report