The final procedure in the quarter-end process is your review of the Quarterly Tax Statement. At the close of each quarter, the Tax Service sends this statement to you; it is generally mailed fifteen (15) days after the last quarterly returns have been filed. This statement provides you with sections for reconciling liabilities recorded, cash collected, and data filed with the payroll tax agencies. A sample of the Quarterly Tax Statement and detailed field descriptions can be located in the Reports and Forms chapter.
The Quarterly Tax Statement consists of three sections:
• Tax Deposit Summary
• Tax Account Reconciliation
• Tax Returns and Reconciliations
When you receive your Quarterly Tax Statement, complete the following steps to verify the accuracy of the data.
1. Review the Tax Deposit Summary.
The Tax Deposit Summary is the first of three sections included in your Quarterly Tax Statement. The Tax Deposit Summary, contrary to its name, summarizes your per pay period and quarterly liabilities as opposed to deposits.
The Tax Deposit Summary is organized into a series of columns:
Tax Types - Tax types active during the current quarter.
Prepaid W/H - Tax liabilities incurred within the quarter prior to starting on the Tax Service (Mid-Quarter starts).
Withheld - Total tax liabilities reported during the quarter on a per-payroll basis. This should reflect the total taxes on your Payroll Register Grand Totals page.
Due/Deposited - Total tax liabilities reported (not deposited as the heading implies) at quarter-end.
Variance - Difference between taxes reported, prepaid W/H plus Withheld columns, and total taxes reported at quarter-end, or the Due/Deposited column.
Memo Items - Total dollar amount of any memo items on your account. Displays as the last line item entry, if applicable.
2. Review the Tax Account Reconciliation.
The second section of your Quarterly Tax Statement is the Tax Account Reconciliation. This summarizes the cash received from your company during the quarter for tax transactions. These amounts can be tied back to your bank statement.
Cash received for tax filing fees is reflected on the Tax Service billing statement, or invoice, which is sent to you on a monthly basis.
The Tax Account Reconciliation consists of the following sections:
Prior Quarter Account Balance - This section identifies your company's ending balance from the previous quarter.
Funding Received - For Prior Quarter: Funds received within the current quarter for prior quarter balance(s).
For Current Quarter - Funds received within the current quarter for current quarter tax activity.
Total Taxes Due/Deposited - Total taxes reported at quarter-end. This figure equals the Due/Deposited Grand Totals on the Tax Deposit Summary.
Additional Transactions -Data in this section identifies additional charges or credits for tax activity generally outside of the current quarter. This includes transactions such as late tax, penalty and interest assessments, credit memos, credit carry forwards, and agency refunds.
Ending Balance - This section displays the ending balance for the current quarter. This balance is a total of Prior Quarter Account Ending Balance, Funds Received, Total Taxes Due/Deposited, and Additional Transactions.
A negative ending balance represents a credit to your company. If the credit amount is for $25 or more, you can request a refund check by completing the Refund Request form enclosed in your Tax Statement and returning it to the Tax Service. If the credit amount is under $25, it will be applied to the next quarter's ending account balance.
A positive balance represents additional money due at the close of the quarter. Ensure that funds are available at the completion of the quarter-end process for any uncollected quarter-end deficit balances of ten dollars or more. Funds should be provided by the date printed on your quarterly tax statement. Quarter-end funds are generally collected the third week of the second month following the end of the quarter. For example, if your first quarter-ending balance is $150, this amount will generally be collected the week of May 17th. If the amount is under ten dollars, it will be applied to the next quarter's ending account balance.
3. Review the Tax Returns and Reconciliations.
The third section of the tax statement includes laser-printed copies or facsimiles of all returns filed at quarter-end. For jurisdictions that do not require a quarterly return, the Tax Service provides a reconciliation that summarizes the taxes withheld and deposited during the quarter. Review these documents for accuracy and keep them on file for a minimum of four (4) years, and as many as ten (10) years for some locals. Refer to the Record Retention chart included in the Reference chapter for more details.
4. Verify the accuracy of your Quarterly Tax Statement.
Review your Quarterly Tax Statement and tax returns for accuracy. If you have any questions regarding the information on the tax statement, contact your Tax Service Representative.
If you believe you have found an error or have new, corrected quarterly totals, contact your Tax Service Representative for assistance in requesting an amendment. Additional information regarding amendments can be located in the Maintenance chapter.