Direct Deposit Requests Cancelled When Withhold at Source Credits are Applied

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May 6, 2014

Purpose of Bulletin

The purpose of this bulletin is to inform staff of a potential increase in taxpayer contact due to cancelled direct deposit requests when withholding at source credits are applied.

Background

Withholding Services and Compliance Section (WSCS) removed the hard-coded zeros from the 2013 non-wage withholding forms in order to allow withholding agents to remit the full amount withheld. When taxpayers claim their withholding on their return they must round to the nearest dollar.  Returns with a credit that has been rounded to the nearest dollar are adjusted to apply the exact amount withheld including cents. If there is an adjustment and the taxpayer requested direct deposit, we will send the taxpayer a notice to advise them that due to an adjustment on their return we will issue a paper refund. The notice does not specify when the taxpayer will receive the check. Generally, taxpayers will receive their paper check within a few days after they receive the letter, and further action is not required.

Additional Information

WSCS is currently working with the appropriate business area to clarify the taxpayer notice language to specify when the taxpayer will receive their check. System changes are being resolved to prevent cancelled direct deposits when taxpayers claim withholding at source credits in 2015.

Taxpayer Inquiries

Refer taxpayers with questions to the Taxpayer Services Center Section at 800.852.5711.

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