When you submit a payment to a tax agency, you may need to enter a reason code that tells the agency what the payment is for (for example, a regular liability payment or a penalty/interest payment). Following are descriptions of reason codes you should use for different payment types.

IRS Payments
(940, 941, 944)

Federal Tax Deposit: Use this reason code only when you are making a regular liability payment, not when you are making a penalty or interest payment.

Due with Notice: Use this reason code in either of the following situations: A) If you are making a payment based on the amount due on your 941, 944, or 940 filing. B) If are you making a payment as a result of a penalty notice from the agency. (Note that the amount can include the liability payment, along with any penalty or interest due as a result of an audit.)

Note that the reason code selections typically include the type of payment; for example, Due with 941 Notice and Due with 944 Notice. Be sure to select the appropriate payment along with the reason code.

Note: If the Reason Code field is not displayed when you submit the payment, then the agency does not require that you provide a reason code for the payment.