Electronic signatures: To PIN or not to PIN

Even with the switch over to the XML format for electronic Forms 941 and 940, you still can’t file those forms directly with the IRS; you need to go through a third party. Which makes one wonder: How many ways are there for you to electronically sign payroll returns that will allow your third party to e-file on your behalf? At least two, according to newly revised Forms 8879-EMP and 8453-EMP.

Option No. 1—PIN-based method. Form 8879-EMP is PIN-based. Your third party, technically called an electronic return originator, or ERO, will retain this form and file your 941s or 940 on your behalf. PINs are five characters and can’t be all zeros. Be sure you check the appropriate box in Part II to authorize your ERO to enter your PIN, or you can enter it yourself. The form can also be used to authorize an electronic funds withdrawal.

Option No. 2—No-PIN method. Form 8453-EMP validates your electronic signature, which you scan in and save as a PDF file. Your ERO attaches the scanned form to your e-filed 941s or 940.

TRUST, BUT VERIFY: By filing either form, you’re consenting to the following:

  • That your ERO will receive an acknowledgment from the IRS that your 941s or 940 were filed or the reason why they were rejected
  • That your ERO will be informed of any processing delay
  • That your ERO will be informed of when you can be expecting a tax refund.

Remember: Regardless of which form you file, you’re still responsible for ensuring that your taxes are paid and your 941s and 940 are filed. You should verify the type of return that’s being filed in Part I of either form, and the accuracy of all returns filed on your behalf.