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

    • View return. Opens the return in a new window.
    • Update status. Select to update the return status to Not reconciled, Reconciled, or Filed.
    • Download. Select to download the PDF return. If the return is e-filed, you can also select here to download the e-file.
  • 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