IRS Business Tax Account: 3 Ways to Send Payroll Deposits

The IRS now names three electronic ways to send a federal tax deposit: your IRS business tax account, IRS Direct Pay for businesses, and EFTPS. A different IRS page says individual taxpayers can no longer create new EFTPS accounts. Both pages are current. If you run payroll under an EIN and sign your own Form 1040 in April, you are standing on both sides of that pair. The deposit is due on schedule either way. The penalty for missing it does not care which sentence you thought applied to you.

Take a six-person HVAC company in Lakeland, hypothetical but ordinary. Payroll clears every other Friday. A federal tax deposit follows it. You push that deposit through yourself, or your office manager does it between two other things. Then it happens again, and again. Nobody in the building set that deadline.

Business Tax Account has been live since October 2023, and Tax Topic 757 now names it beside Direct Pay and EFTPS for that job. This post is about that job. Which of the three channels your business can actually use, and what the IRS does to a deposit that arrives late or by the wrong method.

Is the IRS shutting down EFTPS for business payroll deposits?

No, a business with an EIN keeps EFTPS as one of the three channels Tax Topic 757 names: the EFTPS wind-down runs on the individual side of the IRS, where the agency states that individual taxpayers can no longer create new EFTPS accounts and that current EFTPS users can still use EFTPS for now.

Drop "individual" and that sentence stops being true for your business.

The EFTPS page describes who can open a new EFTPS account. Tax Topic 757 describes how a business has to send a federal tax deposit, and it names EFTPS in that list today. An employer who reads only the first page walks away with somebody else's answer.

What moved this year sits at the other end of that list. Business Tax Account joined the channels that satisfy the deposit requirement. IRS Direct Pay for businesses was already there.

Which businesses can actually open a Business Tax Account?

Eligibility runs on entity type, and Business Tax Account opens for corporations, partnerships, sole proprietors with an EIN, governments and tax-exempt organizations, while the one structure the IRS still leaves out is the LLC that files as a sole proprietor on Schedule C or Schedule F.

• Sole proprietor with an EIN filing Schedule C or Schedule F
• Partnership filing Form 1065
• S corporation filing Form 1120-S
• C corporation filing Form 1120
• Single-member LLC filing Form 1120-S or Form 1065
• Federal, state and local governments
• Indian tribal governments
• Tax-exempt organizations

The IRS words the gap this way. Business Tax Account isn't yet available for limited liability companies (LLCs) that file as sole proprietors with Schedule C or Schedule F (Form 1040). That sentence is still on the IRS eligibility page. The IRS lists a Designated Official role for single-member LLCs as coming soon, with no date beside it. That owner's Schedule C sits in the Individual Online Account instead. Same EIN as the S corp across the street. Same payroll, same deposit deadlines. No account to open.

What penalties apply if a payroll tax deposit is late or paid the wrong way?

Lateness and method draw separate penalties: under IRC 6656(b)(1), restated in Publication 15, a late deposit runs from 2 percent up to 15 percent depending on how many days pass, while Internal Revenue Manual 20.1.4 puts its own flat 10 percent on any deposit that goes out by a non-electronic method, when the IRS requires electronic.

Those day ranges are hard boundaries, so day 5 and day 6 sit in different rows.

A hypothetical Ocala restaurant owes a federal tax deposit on a Wednesday. Payroll ran clean. The deposit clears the following Sunday, four days behind. That is the first row of the table, 2 percent, the smallest number on the page.

Now change one thing about the same deposit and leave the calendar alone. Instead of sending it electronically, the office manager mails a check. The four days still read 2 percent. The check reads a flat 10 percent of its own, because that penalty scores the method. Late is a calendar failure. Wrong channel is a separate failure with a separate number, and IRM 20.1.4 keeps it apart.

Which channel a business uses, and who inside the business is responsible for pushing it through, is worth settling before the next payroll run rather than after a notice.

What did the 2026 Business Tax Account update actually add?

Three things, and that is the entire list in IRS fact sheet FS-2026-11: an expanding library of digital notices inside the account, a Designated Official who can now download Notice CP575 as EIN verification, and the option to submit Offer in Compromise payments.

Three items, and small is the honest word for the update. The second one changes a Tuesday. Proving your EIN to a bank used to mean a call to the IRS and a wait for Letter 147C in the mail. A Designated Official now downloads Notice CP575 from the account and walks it into the branch.

What the account still cannot do is take a bank account for a refund, which is why business refunds still go out as paper checks.

The Requirement Came With the EIN

Here is what this year did to a Florida employer's deposit obligation. Nothing.

The obligation arrived with the EIN. The IRS automatically pre-enrolls new EINs in EFTPS, per Publication 4275. The EFTPS story that traveled this year was about individual taxpayers creating new personal accounts. A different population, on a different set of IRS pages. It never reached the rule that governs your payroll deposits.

What did change is quieter than the headline that buried it. A second front door opened onto an obligation that was already standing there. Any of the three satisfies the electronic requirement, and the flat 10 percent has no opening. The IRS gated the new door by entity type. The IRS has not yet let in the owners who would gain most from one fewer login.

Which Sentence Was About You

Back to the two sentences from the top. Both are still true, and now they sort. Individual taxpayers can no longer create new EFTPS accounts, and that sentence is about personal accounts. You must make all federal tax deposits electronically. That one is about the EIN your payroll runs under, every deposit period, the same as last year. Three channels satisfy it, and Business Tax Account is the newest of them. That was true before the July fact sheet, and it is true after. The live question for a Florida owner is not whether EFTPS survives. It is which of the three channels their entity type can open.

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