The IRS or state agencies might send your company notices about withholding or unemployment taxes. Most of these notices can be actioned by checking or updating your settings in CleanCloud.
Reminder: Agencies do not send notices to Gusto directly. Be sure to read and act on any notices before the deadline or effective date.
What you can do on your own
If the notice is about a change to your deposit schedule or unemployment tax rate, you can update it in CleanCloud without help:
When to report a notice to CleanCloud Support
If you cannot fix (or action) the notice yourself.
If you’re not sure what the notice means.
If the notice shows a missing payment or balance owed.
How To Read & Handle Tax Notices
Here’s how to understand and act on common notices, like refunds, amounts due, rate changes, and more.
Step 1: Identify the notice
Check if it’s from the IRS or a state agency (the name is usually at the top).
Make sure the agency is supported by Gusto.
If it’s not, you’ll need to handle it outside of Gusto. Work with your previous payroll provider or tax professional.
Confirm if Gusto was your reporting agent during the time period listed on the notice.
Step 2: Verify the details
Check that the information on the notice matches what’s in your CleanCloud Payroll account:
Company name
Company address
Deposit schedule
Tax rate
Account ID/EIN
If anything is wrong, update it in CleanCloud right away.
Step 3: Determine what the notice is about
Deposit schedule change: Update your deposit schedule in CleanCloud. Make sure to take note of the effective date (to avoid penalties).
As a reminder, we'll default to depositing on the faster semi-weekly schedule to prevent late tax payments, penalties, and tax delinquency notices.
Unemployment tax rate change: Update your rate in Gusto before the effective date (to help avoid penalties).
Here's how taxes will be handled based on when you make the update:
Before the effective date: Gusto will apply the new rate to payrolls with a check date on or after the effective date.
Mid-quarter with a backdated effective date: Gusto will reconcile at the end of the quarter to make sure correct quarterly payments are made based on the new rate.
The effective date was before the current quarter started: Taxes may have been withheld incorrectly for prior quarters. Contact the agency to resolve any balances or credits.
We'll adjust for the current quarter during our end-of-quarter reconciliation.
Do not accept any credits (refunds) without first confirming the rate difference is the only reason for the refund.
Refund: If you’re owed money, contact the IRS or state agency for confirmation and details. Send the notice to CleanCloud before cashing the refund.
Be careful when accepting refunds, errors can lead to penalties later if the money needs to be returned to the agency.
Refunds are commonly caused by overpayments.
Amount due: Contact the IRS or state agency for more details and request an extension, then send the notice to CleanCloud.
Step 4: Review notice deadlines and request extensions
If a deadline is coming up, contact the agency for an extension or hold on the account (most notices include agency contact information).
You can also request additional details from the agency to help speed up the time it takes to correct the issue.
Notices Related To Filing & Payment Errors
Tax notices may happen if there’s a problem with filing or payments. If Gusto told you we could not file or pay for you, there are several possible reasons why. Tax agencies sometimes do not explain why our attempted filings or payments did not work.
To fix it, you’ll need to contact the tax agency directly for details and instructions.
Common Reasons For Failed Filings or Payments
Review the common reasons below, and work with the agency to fix all issues—there could be one or several.
Inactive accounts
Your state tax account might become inactive if:
No tax returns are filed.
You file multiple "zero" returns in a row.
The account is set to activate in the future.
If your account is inactive, contact the agency to learn how to reactivate it. Rules for reactivation can vary by state.
Incorrect effective date
The effective date should be on or before the start of the quarter when Gusto first tried to file and pay for you.
Account number not valid
The account number in Gusto might not match the one given by the state agency.
You could have the right number but the wrong account type for filing and paying taxes. Here's what to do:
Call the agency to confirm your account number and type.
Check the number in CleanCloud under State Tax Information.
Be careful if you update an account number after filings happen—this can cause tax issues.
Company name or address mismatch
The company name or address in CleanCloud might not match what the agency has.
Call the agency to confirm the name and address they have on file.
Check what’s in CleanCloud by going to Company Address.
FEIN mismatch
The FEIN in Gusto might not match what the agency has, so the account cannot be verified.
Call the agency to confirm the correct FEIN for your account.
Check what’s in CleanCloud under End Of Year Company Review.
If you need to update your FEIN, contact us from the Help section—there might be tax issues we need to help with.
Third Party Authorization (TPA) or Power of Attorney (PoA) effective date issue
Confirm with the agency that Gusto's TPA starts on the first day of the quarter with your first check date in that state (that was processed with Gusto).
To check the first check date, go to Users > Payroll in CleanCloud to find the first payroll in that state.
Make sure Gusto is authorized to file and pay for you.
Previous provider still listed as reporting agent
If your old payroll provider is still listed as the reporting agent, it can block Gusto from filing for you. Contact the agency or your previous provider to remove them from your account.
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