Tax Deposits

"Tax Deposit" refers to a payment that a company owes to a tax agency for any payrolls that ran on Check. Using Check’s List tax deposits endpoint, you can give companies visibility into their Tax Deposits and communicate which may require follow-up actions

Tax Deposit Lifecycle

When a company approves a payroll, Check will add new Tax Deposits corresponding to the payroll's tax liabilities to the list of Tax Deposits returned from the endpoint.

Upon creation, a Tax Deposit will not have a due_date. It may take up to 24 hours for the due_date of the Tax Deposit to populate.

Each Tax Deposit has a funding_status and a deposit_status.

The possible statuses for funding_status are:

• funded
  • Funding for the payroll associated with the Tax Deposit was successful.
• pending
  • Funding for the payroll associated with the Tax Deposit has not been completed.
• failed
  • Funding for the payroll associated with the Tax Deposit has failed.

The possible statuses for deposit_status are:

• deposited
  • The Tax Deposit has been paid to the tax agency.
• pending
  • The Tax Deposit has not yet been paid to the tax agency.

Note: Check will only send out payments for a Tax Deposit if it is funded. This means that a Tax Deposit can never have a funding_status of pending or failed and a deposit_status of deposited.

API

Below is an example response of the List tax deposits endpoint.

{
  "next": null,
  "previous": null,
  "results": [
    {
      "payroll": "pay_vIFHhvyGN47ej1upyIT8",
      "payroll_payday": "2022-08-05",
      "tax": "tax_GaeJoEAzbqqc2D9GMfOF",
      "tax_label": "Federal Income Tax",
      "amount": 1522.04,
      "due_date": "2022-08-12",
      "funding_status": "funded",
      "deposit_status": "deposited"
    },
    {
      "payroll": "pay_vIFHhvyGN47ej1upyIT8",
      "payroll_payday": "2022-08-05",
      "tax": "tax_W7hjDGn6sU1d3U8dr9bq",
      "tax_label": "Federal Unemployment Tax",
      "amount": 961.27,
      "due_date": "2022-09-30",
      "funding_status": "funded",
      "deposit_status": "pending"
    }
  ]
}

Tax Deposits are returned in order from the latest payroll_payday to the earliest.

🚧

Tax Deposits in Sandbox

Payment of Tax Deposits cannot be simulated in Sandbox. Therefore, when using the List tax deposits endpoint in Sandbox the due_date will always be null and the deposit_status will always be pending.

Voids

A company voiding a payroll item may affect how much money will be sent to a tax agency. This logic is baked directly into the endpoint.

Let's take an example where a company has a Tax Deposit for Federal Income Tax with an amount of $500 and the deposit_status is pending:

{
  "next": null,
  "previous": null,
  "results": [
    {
      "payroll": "pay_vIFHhvyGN47ej1upyIT8",
      "payroll_payday": "2022-08-05",
      "tax": "tax_GaeJoEAzbqqc2D9GMfOF",
      "tax_label": "Federal Income Tax",
      "amount": 500.00,
      "due_date": "2022-08-12",
      "funding_status": "funded",
      "deposit_status": "pending"
    }
  ]
}

If the company voids an item from payroll pay_vIFHhvyGN47ej1upyIT8 that decreases the Federal Income Tax liability amount, the Tax Deposit's amount will decrease by that amount. This is because only the non-voided liability amount needs to be paid to the tax agency.

This is what the Tax Deposit would look like after a void that decreases the amount of the Federal Income Tax liability by $200 while the deposit_status is pending.

{
  "next": null,
  "previous": null,
  "results": [
    {
      "payroll": "pay_vIFHhvyGN47ej1upyIT8",
      "payroll_payday": "2022-08-05",
      "tax": "tax_GaeJoEAzbqqc2D9GMfOF",
      "tax_label": "Federal Income Tax",
      "amount": 300.00,
      "due_date": "2022-08-12",
      "funding_status": "funded",
      "deposit_status": "pending"
    }
  ]
}

Let's take a different example where a company has a Tax Deposit for Federal Income Tax with an amount of $500 and the deposit_status is deposited:

{
  "next": null,
  "previous": null,
  "results": [
    {
      "payroll": "pay_vIFHhvyGN47ej1upyIT8",
      "payroll_payday": "2022-08-05",
      "tax": "tax_GaeJoEAzbqqc2D9GMfOF",
      "tax_label": "Federal Income Tax",
      "amount": 500.00,
      "due_date": "2022-08-12",
      "funding_status": "funded",
      "deposit_status": "deposited"
    }
  ]
}

If the company voids an item from payroll pay_vIFHhvyGN47ej1upyIT8 that decreases the Federal Income Tax liability amount, the Tax Deposit's amount will not decrease. This is because the total amount for the deposit has already been paid to the agency. The Tax Deposit will remain the same.