Trusts and estates making electronic payments to the IRS

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12/10/2025
Trusts and estates making electronic payments to the IRS

We previously communicated to clients about how following a recent Executive Order, all payments made to the Federal government should be processed electronically.  We wanted to specifically address this for our trust and estate clients.

Trusts / estates without a checking account or electronic payment method in place may face delays or penalties if they are not prepared.  Trusts and estates have several electronic payment options and we encourage you to review this in advance of Tax Season:

Electronic Federal Tax Payment System (EFTPS):
This is the IRS' preferred method for trusts and estates.  It is a free service provided by the U.S. Department of the Treasury that allows a trust / estate to pay all federal taxes online or by phone.  You can schedule payments up to 365 days in advance.

To use EFTPS, you must:

1. Enroll online at the office EFTPS website.

2. Select the "Business" category when enrolling (even though it is for a trust / estate).

3. Receive a personal identification number (PIN) by mail, which can take 5-7 business days or longer.  The enrollment process must be completed in advance of a payment due date.

Electronic Funds Withdrawal (EFW):
If we prepare the trust / estate's tax return (Form 1041) for e-filing, we can authorize the IRS to withdraw the Federal tax payment directly from the trust's / estate's bank account in a single step along with the tax return.

1. If your trust / estate does not currently maintain a checking account:
  • Consider opening a trust checking account.  Or,
  • Enable automated clearing house (ACH) debit (electronic withdrawal) capability on an existing brokerage or investment account.

2. Make sure that we have this correct bank / brokerage / investment account information for preparing the trust or estate's tax return.

Same-day wire transfer:
Funds can be wired from the trust's or estate's financial institution to the IRS.  This option is more complex, often involving bank fees, and requires specific guidance from the "Electronic Federal Tax Payment System Financial Institution Handbook" to ensure the payment is processed correctly.


NOTE - The IRS "Direct Pay" system is for individual taxpayers only and is not available for trusts or estates.  Trustees / Personal Representatives / Executors should plan accordingly to ensure compliance with the electronic mandate.


Thank you.