NPRC Studies & Recommendations

Authorizations – Summary and Payroll Service Authorization Best Practices

There are nearly three million employers in the US using payroll service providers (PSPs), representing more than 48% of the private sector workforce. PSPs offer a range of services which often includes preparing payroll tax returns and making tax deposits on behalf of their clients. Occasionally, PSPs also assist their clients with problem or error resolution on their tax accounts.

In practice, many state tax authorities require their own specific authorization forms rather than accept a general or even federally approved authorization form (IRS Form 8655) specifically for employment tax payments and reporting. This causes problems and delays.

The two documents (downloads above) are intended to provide background information and best practices regarding employer authorizations related to payroll services, particularly tax filing and reporting services for state revenue agencies and state unemployment insurance tax agencies.