PSP verification for tax season

Clarify PSP meaning: "PSP" is used in federal guidance to mean "payroll service provider" (IRS) and also as an acronym for Treasury's Payroll Support Program. The topic the user provided appears to concern PSP verification broadly for tax season; recommend first clarifying whether the focus is payroll service providers (payroll/K-forms, Form 8655, EFTPS monitoring) or payment service providers / payment processors (1099-K reporting).

Both have important verification and compliance actions for business owners.Employer/business responsibility: Employers who use a PSP or reporting agent remain responsible for employment tax withholding, deposit, payment, and filing obligations.

Using a PSP does not shift liability to the PSP. (IRS guidance emphasizes verifying PSP actions and using Form 8655 when authorizing reporting agents.)Authorization and forms: To authorize a reporting agent to sign and e-file certain employment tax returns, use Form 8655 (Reporting Agent Authorization).

Reporting agents must follow Rev. Proc. 2012-32 and provide clients with written statements about continued employer responsibility.Monitoring & verification actions for tax season (practical guidance):- Verify the PSP or reporting agent is properly authorized and confirm the EIN and contact information the PSP uses when filing.- Enroll and monitor EFTPS to see deposits/payments made under your EIN so you can reconcile and detect missing or misapplied deposits.- Request quarterly written statements from reporting agents as required by Rev.

Proc. 2012-32 and retain contracts/communications as part of tax-season documentation.- Maintain copies of W-2s, payroll registers, and bank transaction records, and reconcile with PSP-provided reports before filing.- If using payment processors (payment service providers) expect 1099-K reporting obligations; collect and reconcile gross payment records vs. 1099-K provided by PSPs.Tax treatment & forms for government PSP programs: Treasury’s PSP (Payroll Support Program) funds are taxable; recipients may receive Form 1099-G for PSP payments and should reconcile amounts and contact Treasury for discrepancies.State-specifics: State rules vary.

Some states follow federal treatment for payroll/payment reporting; others have separate filing or withholding variations. For state-specific requirements, check the applicable state department of revenue/treasury website (state-by-state lookup needed in final content).

Recommend including links to state revenue pages and a short, state-specific checklist in the blog (to be compiled by querying state sites).

Clarify PSP meaning: "PSP" is used in federal guidance to mean "payroll service provider" (IRS) and also as an acronym for Treasury's Payroll Support Program. The topic the user provided appears to concern PSP verification broadly for tax season; recommend first clarifying whether the focus is payroll service providers (payroll/K-forms, Form 8655, EFTPS monitoring) or payment service providers / payment processors (1099-K reporting).

Both have important verification and compliance actions for business owners.Employer/business responsibility: Employers who use a PSP or reporting agent remain responsible for employment tax withholding, deposit, payment, and filing obligations.

Using a PSP does not shift liability to the PSP. (IRS guidance emphasizes verifying PSP actions and using Form 8655 when authorizing reporting agents.)Authorization and forms: To authorize a reporting agent to sign and e-file certain employment tax returns, use Form 8655 (Reporting Agent Authorization).

Reporting agents must follow Rev. Proc. 2012-32 and provide clients with written statements about continued employer responsibility.Monitoring & verification actions for tax season (practical guidance):- Verify the PSP or reporting agent is properly authorized and confirm the EIN and contact information the PSP uses when filing.- Enroll and monitor EFTPS to see deposits/payments made under your EIN so you can reconcile and detect missing or misapplied deposits.- Request quarterly written statements from reporting agents as required by Rev.

Proc. 2012-32 and retain contracts/communications as part of tax-season documentation.- Maintain copies of W-2s, payroll registers, and bank transaction records, and reconcile with PSP-provided reports before filing.- If using payment processors (payment service providers) expect 1099-K reporting obligations; collect and reconcile gross payment records vs. 1099-K provided by PSPs.Tax treatment & forms for government PSP programs: Treasury’s PSP (Payroll Support Program) funds are taxable; recipients may receive Form 1099-G for PSP payments and should reconcile amounts and contact Treasury for discrepancies.State-specifics: State rules vary.

Some states follow federal treatment for payroll/payment reporting; others have separate filing or withholding variations. For state-specific requirements, check the applicable state department of revenue/treasury website (state-by-state lookup needed in final content).

Recommend including links to state revenue pages and a short, state-specific checklist in the blog (to be compiled by querying state sites).