Electronic Funds Transfer
Electronic Funds Transfer (EFT) Payment Types are TEXNET, Electronic Check (WebFile and Electronic Data Interchange-EDI) and Credit Card.
Table of Contents
- Who must pay by EFT?
- How do I get started?
- What is Automated Clearing House (ACH) Debit?
- What is ACH Credit with addenda?
- Do I still file my regular tax returns?
- If I pay electronically, can I file my return electronically?
- TEXNET Changes
- Holidays or Weekends
- TEXNET Missed Payment Deadline
- Late Payments/Proof of Payment
- TEXNET Due Date Chart (PDF, 23K)
- TEXNET Electronic Funds Transfer Payment Instruction Booklet (PDF, 1.4M)
Related Electronic Funds Transfer links:
- Federation of Tax Administrators (FTA)
- National Automated Clearinghouse Association (NACHA)
- Electronic Data Interchange (EDI)
A: State law requires taxpayers who paid $10,000 or more in a payment category during the preceding state fiscal year to electronically transmit payments to the Comptroller's office; methods include, TEXNET, electronic check (WebFile and Electronic Data Interchange-EDI), and the electronic transmission of credit card information. The Comptroller's office will inform taxpayers who meet this requirement at least 60 days prior to the due date. Taxpayers who fall between the $10,000 to $100,000 thresholds can make their electronic payments by credit card or electronic check in WebFile. They can also pay electronically via internet or telephone if they enroll in TEXNET. Learn what thresholds apply to your tax (PDF, 43K).
If payments for a tax category continue to total $10,000 or more in subsequent years, payments must continue to be made by EFT. Some taxpayers may have to pay by EFT for several tax types. For example, a company may pay $10,000 for both Sales & Use Tax and Franchise Tax. Both taxes must be paid by EFT.
Taxpayers who paid $100,000 or more in a tax category in the prior fiscal year must make their electronic payments by TEXNET. The $100,000 threshold is applicable to all tax types. If payments for the tax category continue to total $100,000 or more in subsequent years, taxpayers must continue to pay using TEXNET.
The law imposes a 5% penalty on the payment amount if payment is not in compliance with EFT requirements. This penalty would apply to each filing period in which payment is not remitted in compliance with EFT requirement.
A: Taxpayers can register to use WebFile to file their tax return and make payments. Taxpayers required to submit payments with TEXNET, can activate an account through the TEXNET website. The TEXNET Electronic Funds Transfer Payment Instruction Booklet (PDF, 1.72M) contains the complete instructions for using TEXNET.
A: In an ACH debit transaction, the taxpayer authorizes the TEXNET system to debit a selected bank account.
To use this method of payment to pay your state taxes, you must be enrolled in the TEXNET system.
An ACH Debit is where authorization is given to the TEXNET system by the taxpayer to debit the selected bank account. The taxpayer must enter the payment information into the TEXNET system by touch-tone telephone, TEXNET’s website or WebFile no later than 6:00 p.m. (CT) on the banking business day before the due date. The system will prompt the taxpayer to enter a "settlement (fund transfer) date." Payment warehousing is a feature in which the taxpayer is given the option to choose a settlement date up to 30 days in the future. The taxpayer may inquire, change, or delete the entered information by touch-tone telephone or TEXNET website, as long as it's done before 6:00 p.m. (CT) on the banking business day before the settlement date. On the settlement date, the designated bank account will be debited for the entered payment amount.
After receiving the payment information, the system will automatically issue a trace number to identify the completed payment.
A list of TEXNET payment due dates (PDF, 23K) and the TEXNET Electronic Funds Transfer Payment Instruction Booklet (PDF, 1.72M) are available.
A: In an ACH credit transaction, the taxpayer initiates payment through their financial institution.
To use this method of payment, you must be enrolled in the TEXNET system.
The taxpayer originates an ACH Credit (PDF, 1.72M) in either CCD+ or CTX format through their financial institution for settlement on or before the payment due date. The addenda record(s) must be in the standard TXP format. This payment option allows the payment and related information to be transferred together; however, it is more prone to errors if the addenda record is improperly formatted. Inaccurate information could result in the inability to apply the payment timely. This may be considered a late payment and could result in the loss of timely filing and /or prepayment discounts or the assessment of a late filing penalty.
For complete instructions on ACH Credit payments, please read the TEXNET Electronic Funds Transfer Payment Instruction Booklet (PDF, 1.72M).
A: Yes, tax returns must be filed by the due date with the Comptroller of Public Accounts. Certain tax types must be filed electronically if you paid more than $50,000 in tax in the prior fiscal year. Learn what thresholds apply to your tax (PDF, 43K).
A: Yes. The Comptroller's office has two free programs that meet electronic filing requirements.
Electronic Data Interchange (EDI) is designed for businesses reporting a large number of locations (outlets), leases, schedules or authorities. Submitting a payment with your EDI return fulfills your mandatory payment requirement at the $10,000 and $100,000 level. Taxpayers and tax professionals can use the Comptroller's approved EDI software to transmit return data and payments for the following taxes:
- Sales Tax/Direct Pay
- International Fuel Tax Agreement (IFTA)
- Motor Fuels
- Natural Gas and Crude Oil
Please see the Electronic Data Interchange (EDI) section for further details on this system.
ACH debit taxpayers can report a change in bank account numbers online at https://texnet.cpa.state.tx.us or by calling 1-800-636-4003.
For other necessary changes, please contact TEXNET at 1-800-531-5441, ext. 3-3010.
Holidays or Weekends
Currently, "same day" settlement of an ACH transaction is not available. When a due date falls on a weekend or holiday, you must originate the ACH transaction no later than the banking business day before the weekend or holiday. For example; if the due date falls on a Monday (or Tuesday, if Monday is a banking holiday), you must originate the payment no later than 6:00 p.m. (CT) the previous Friday to avoid being assessed a late payment penalty.
A due date schedule is provided to all taxpayers each calendar year. A schedule of EFT payment due dates (PDF, 23K) is available.
TEXNET Missed Payment Deadline
ACH Debit transactions that are not entered into the TEXNET system before 6:00 p.m. (CT) on the banking business day before the due date, or when ACH Credit with addenda transactions are not originated for settlement on the due date, the following options are available:
- Provide payment information to the TEXNET Hotline by telephone at 1-800-531-5441, ext. 3-3010. Note: This is necessary to identify the payment.
- Select TEXNET as a payment option in WebFile. You will be prompted that your payment will be late and provided instructions on how to complete a wire transfer. When given this prompt, hit Continue and TEXNET will be notified that you will be sending your payment via wire transfer. Please continue as usual until you receive your confirmation page.
Once you have notified TEXNET using one of the above options you will need to initiate the wire transfer from your financial institution. Please include the taxpayer number in the wire. For more information please review the TEXNET Electronic Funds Transfer Payment Instruction Booklet (PDF, 1.72M).
Late EFT payments are subject to the same penalties and loss of timely filing and/or prepayment discounts as any other late payment. There is a separate 5% penalty for failure to pay electronically as required.
Late Payments/Proof of Payment
If a payment is received after the due date and the taxpayer and his financial institution do not think they are responsible for the delay, one of the following items must be furnished as appropriate proof of an attempt to transfer funds:
- the trace number provided by the TEXNET system, when using ACH Debit;
- the bank-assigned ACH trace number, when using ACH Credit with addenda; or
- the Federal Reserve Bank wire transfer reference number, when using the backup procedures.
If the Comptroller's office determines that the taxpayer did attempt to transfer payment in a timely manner, payment records can be corrected upon receipt of appropriate documentation. Please call the TEXNET Hotline at 1-800-531-5441, ext. 3-3010 for assistance.
An addenda record is sent with an ACH entry and contains an 80-character "free-form" field for information required by the Comptroller to identify the payment. In electronic tax collection, there is a standardized format for the addenda record known as TXP.
Automated Clearing House (ACH)
A central distribution and settlement point (in Texas, the Federal Reserve Bank in Dallas) for the electronic clearing of debits and credits between financial institutions. Every day, millions of ACH transactions take place - with funds debited from, or credited to, the balances of participating financial institutions, which in turn post those transactions to their customers' accounts.
Settlement occurs when funds are actually transferred from the taxpayer's bank to the Comptroller's bank account.
The business day on which funds are transferred is the settlement date. This date should not be later than the due date for that tax.
For questions regarding Electronic Funds Transfer, please call the Electronic Reporting Section at 1-800- 531-5441, ext. 3-3630. You can also email us at email@example.com. For questions regarding TEXNET payments, please call the TEXNET Hotline at 1-800-531-5441, ext. 3-3010.