Withholding tax gets paid to three different places depending on which government imposed it. Federal income tax withholding, Social Security, and Medicare go to the IRS, almost always through the Electronic Federal Tax Payment System (EFTPS). State income tax withholding goes to the state department of revenue (or its equivalent) through that state’s online portal. Local withholding, where it exists, goes to the city, county, or school district tax office covering the work location. Knowing where to pay withholding tax at each level, and using the right channel, is what keeps a deposit from being treated as late even when the money left your account on time.
Paying Federal Withholding to the IRS
Every employer that withholds federal income tax, Social Security, or Medicare has to deposit those funds electronically.1Internal Revenue Service. Topic No. 757, Forms 941 and 944 – Deposit Requirements The main channel is EFTPS, a free service run by the U.S. Department of the Treasury.2Bureau of the Fiscal Service. Electronic Federal Tax Payment System Deposits can also be made through your IRS business tax account or IRS Direct Pay, but EFTPS is the workhorse most businesses use.
New employers need to plan for enrollment before their first payroll. After you receive your Employer Identification Number (EIN), the IRS mails an EFTPS PIN to the business address on file, which usually arrives within five business days.3Internal Revenue Service. EFTPS Express Enrollment for New Businesses You can’t make deposits without that PIN. If it hasn’t arrived within a week, call EFTPS Customer Service at 1-800-555-4477.
One boundary worth flagging: individual taxpayers can no longer create new EFTPS accounts.4Internal Revenue Service. EFTPS – The Electronic Federal Tax Payment System If you’re an individual who owes withholding (for example, backup withholding you collected as a payer of interest or dividends), use IRS Direct Pay or your IRS Online Account instead.
When a Paper Payment Is Involved
Electronic deposit is the standard, but employers who mail Form 941 or Form 944 with a payment send it to the IRS at P.O. Box 932100, Louisville, KY 40293-2100, regardless of which region of the country they’re in.5Internal Revenue Service. Where to File Your Taxes for Form 941 Returns filed without payment go to Kansas City, MO or Ogden, UT depending on the state. The complete address list is in the Form 941 instructions. Sending a check to the wrong office can delay processing and trigger interest charges, so verify the current address before mailing.
Nonpayroll Withholding Goes Through the Same Channels, Separately
If you withhold federal income tax from nonpayroll payments (interest, dividends, pensions, gambling winnings, or backup withholding), you report those amounts on Form 945, filed annually.6Internal Revenue Service. About Form 945, Annual Return of Withheld Federal Income Tax The deposit channels are the same (EFTPS, Direct Pay, or your business tax account), but Form 945 deposits must never be combined with Form 941 deposits. Each form has its own deposit obligations and its own lookback period.7Internal Revenue Service. Instructions for Form 945 (2025) Mixing them creates mismatches that can trigger automated penalty notices even when the total you paid is correct.
Paying State Withholding Tax
Every state with an individual income tax requires employers to withhold and remit state income tax from employee wages. The payment goes to the state department of revenue, department of taxation, or equivalent agency, and nearly all of them run an online portal where you register with your state tax ID number, file returns, and submit electronic payments.
Eight states have no state individual income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming. Employers there only need to handle federal and any applicable local withholding. Washington state also has no traditional income tax on wages, though it does tax capital gains.
The portal interface varies from state to state, but the basic process is the same everywhere: register, calculate liability using the state’s withholding tables, and remit by the state’s deadline. Most states use a monthly or quarterly deposit schedule, though large employers may be assigned a more frequent schedule.
Which State Gets the Withholding for Cross-Border Employees
When employees live in one state and work in another, reciprocity agreements can change the answer. About 16 states and the District of Columbia participate in reciprocal agreements that let employees pay income tax only to their state of residence, even when they physically work across the line. Where reciprocity applies, the employer withholds for the employee’s home state rather than the work state.
Without a reciprocity agreement, you generally withhold for the state where the work is performed, and the employee claims a credit on their home-state return for taxes paid to the other state. Some states also have commuter provisions that exempt daily commuters from nonresident withholding regardless of formal reciprocity. Each state has its own form for employees to claim a reciprocity exemption, so confirm the rules with both states’ revenue departments before setting up payroll.
Paying Local Withholding Tax
Some cities, counties, and school districts impose their own income or payroll taxes that require separate withholding. Local withholding is most common in Pennsylvania, Ohio, Indiana, Maryland, and parts of New York, but the specifics vary. Payments typically go to a city finance department, a regional tax collection bureau, or a third-party processor the municipality has contracted with.
There is no single national portal for local withholding. You have to find the official website of the specific city or county where each employee works, register for a withholding account, and remit separately from your federal and state deposits. Some localities piggyback on the state collection system, which simplifies things. Many run entirely independent operations with their own deadlines, rates, and forms. If you have employees in multiple jurisdictions, expect to maintain multiple local accounts.
Confirming the Payment Actually Arrived
Paying withholding tax is only complete once you have proof the payment posted. When you make an EFTPS payment, save the confirmation number in both digital and paper form. EFTPS payments can be verified the next business day on the EFTPS website or by calling 1-800-605-9876 for your EFT acknowledgment number.8EFTPS. Financial Institution Handbook
Timing matters for same-day work. Business tax payments of $1 million or less can be made same-day through EFTPS if submitted before 3:00 PM ET on a business day. Larger payments, or any payment made after that cutoff, must be scheduled at least one calendar day in advance by 8:00 PM ET. For mailed payments, use certified mail with a return receipt so you can prove the mailing date if the IRS ever claims the deposit was late.
State and local portals typically issue their own confirmation numbers on submission. Download or print each one. When a jurisdiction later questions whether a deposit was made, the confirmation number is what closes the discussion.