Skip to main content
Avalara Help Center

Add recurring prepayments and prior payments

Some jurisdictions may require your clients to prepay a portion of their tax. Taxes paid this way are treated as a tax credit when the return is filed; for example, if taxes must be prepaid on their February return, they would pay part of the February tax liability when they file the January return. They would then claim the amount they prepaid as a credit on the February return.

Depending on the jurisdiction, your client might be required to include prepayments on the tax return forms they usually file (for states like FL, GA, and NC), on a separate form specifically for prepayments (IA, PA), or through an electronic payment directly to the tax authority (AR, IL, MO).

clipboard_e2eae8147c091ea2dd4ed0b1209198ae3.png 

Note

If amounts are made outside of Avalara filing, prepayments or adjustments must be added to the filing task before the locking deadline. Any prepayments made by Avalara automatically appear in the filing schedule.

Before you begin

  • Contact the client to see if they have received correspondence or a statement from the state concerning their prepayment obligation. Some states provide the amount they require to be prepaid in a letter, which includes a payment schedule
  • Review the letter to determine the total amount and when the prepayments are due; states may require weekly, monthly, and yearly prepayments. 
  • Have the client's user ID and password on file as a part of the filing calendar's Frequency and Registration section
  • Obtain from the client sufficient data history (usually a year) or equivalent (for example, other forms of sales data); you may use this data to determine the prepayment amounts
  • Request a filing power of attorney be sent to Avalara

Steps

  1. Create a new filing request. Some states require a separate calendar for prepayments.
  2. If the state has prepayments as a part of the return (for example, OK), the filing request includes a prepayment question:
    • If you answer Yes, Managed Returns for Accountants calculates the prepayment based on the year's worth of client transaction data or the equivalent you upload to us.
    • If you answer No, we do not calculate prepayment. You would then be responsible for setting up prepayments in the Returns Console.
  3. Select Save, and we are then notified of the prepayments.

clipboard_e2eae8147c091ea2dd4ed0b1209198ae3.png 

Note

Any changes to a filing request requires approval from Compliance. Once accepted, prepayments are made according to the monthly returns cycle.

  • Was this article helpful?