Automated Prepayment Solution Guide

What are prepayments?

Certain jurisdictions require that businesses within a particular threshold remit a payment of tax in advance to the compliance process for next month’s filing of actual tax liability.

There are two ways in which prepayments are remitted and reported. The first is when a prepayment is remitted separately from the return and reported on the subsequent month’s return. For example, in the month of October I would remit a prepayment against my October liability. When I file the October return in the month of November, I would report the prepayment amount on the October return and remit the remaining October liability. The second way to remit and report prepayments is to report the prepayment remitted for the prior month and remit the prepayment to remit for the current month on the same return. For example, in the month of October I would report the prepayment that I had remitted on the prior month’s (September’s) as well as I would report the prepayment amount to remit for the month of October.

Prepayment amounts are based on calculation methods that include current period and prior period information (calendar or fiscal). Prior year information will automatically be calculated if data for the period exists within SureTax. SureTax will pull in the liability amounts from the prior period data and will calculate the prepayment amounts based upon the calculation method and percentage.

Prepayment calculation methods

The calculation method and percentages are dictated by statute by the respective jurisdiction.

Actual Amount from DOR (received as a schedule of payments to be made)
Prior period tax liability
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Current period tax liability

Frequency of remitting prepayments

Weekly – Once a week
Bi-weekly – Twice a week
Monthly – Once a month Quarterly – Once every three months
Inverse-quarterly – Every first two months of a quarter
Annual – Once a year

Frequency of reporting prepayments

The frequency in which a prepayment needs reported varies depending upon the jurisdiction;

Monthly – Once a month
Quarterly – Once every three months
Annual – Once a year

Taxing Authorities

Florida

Frequency Remitted: Monthly

Frequency Reported: Monthly

Due Date Remittance: 20th day of the month

Due Date Return: 20th day of the month

DOR statute calculation methods:

60% of the current period
60% of the same period previous year
60% of the average of current calendar year

SureTax supported calculation methods:

60% of the current period
60% of the same period previous year
60% of the average of current calendar year

Reporting: Report both the prior period prepayment amount and the current period prepayment amount on the same return.

Kentucky

Frequency Remitted: Monthly

Frequency Reported: Monthly

Due Date Remittance: 25th day of the month

Due Date Return: 20th day of the month

DOR statute calculation methods:

Actual Method: 100% of the 16th-EOM of the previous period, and 100% of the 1st-15th of the current period

Estimated Method: 100% of the 16th-EOM of the previous period, and 50% of the 1st-15th of the current period

SureTax supported calculation methods:

Actual Method: 100% of the 16th-EOM of the previous period, and 100% of the 1st-15th of the current period

Estimated Method: 100% 16th-EOM of the previous period, and 50% of the 1st-15th of the current period

Reporting: Report both the prior period prepayment amount and the current period prepayment amount on the same return.

North Carolina

Frequency Remitted: Monthly

Frequency Reported: Monthly

Due Date Remittance: 20th day of the month

Due Date Return: 20th day of the month

DOR statute calculation methods:

65% of the current period
65% of the same period previous year
65% of the average tax liability for the previous year

SureTax supported calculation methods:

65% of the current period
65% of the same period previous year
65% of the average tax liability for the previous year

Reporting: Report both the prior period prepayment amount and the current period prepayment amount on the same return.