North Dakota Payroll Tax Nonpayment Emergency
Checklist
What This Issue Means
Payroll tax nonpayment occurs when a North Dakota employer fails to remit withheld employee income taxes or employer unemployment insurance contributions by their due dates. This represents money held in trust for employees and the state unemployment system, not business income taxes. The Office of State Tax Commissioner tracks these obligations separately and treats nonpayment as a priority compliance issue requiring immediate attention.
Why the State Issued This Notice
North Dakota employers must withhold taxes from employee paychecks and remit them on specific schedules determined by quarterly filings and payment records. When tax payment is not received by the due date, automated systems flag the account for follow-up. The state issues notices to employers who missed payment deadlines, providing information about amounts owed, applicable penalties, and required next steps.
What Happens If This Is Ignored
Continued nonpayment triggers escalating collection actions, including liens on business or personal assets, wage garnishment through income withholding order processes, and potential referral to enforcement authorities. Interest accrues at 1% per month on unpaid balances, for an annual rate of 12%. The longer the debt remains unpaid, the more aggressive tax collection tools the state may deploy.
Step-by-Step Checklist: What to Do After Identifying
Payroll Tax Nonpayment
Step 1: Locate and Review All State Notices
Check for written notices from the Office of State Tax Commissioner labeled as delinquency notifications or payment demands. Review each notice to identify the specific tax type, reporting period, amount owed, and any deadlines mentioned for response or tax payment.
Step 2: Gather Payroll Tax Records and Filing History
Collect all quarterly payroll tax returns and Form W-2 documents filed with North Dakota for the last 12 to 24 months, along with payment receipts. Locate bank statements showing payments and identify which quarters or months have unpaid balances remaining.
Step 3: Verify Current Tax Account Status Through ND TAP
Contact the Office of State Tax Commissioner at 701-328-7088 to request a current account statement showing all payroll tax liabilities, payments received, and amounts outstanding.
Access your account through ND TAP to review current balances and payment history securely online.
Step 4: Determine the Total Amount Owed
Request an itemized breakdown from the state showing the original tax due, penalty amounts, and interest charges calculated at 1% per month. Confirm whether penalties are still accruing and ask if there are separate amounts owed for different tax types.
Step 5: Assess Current Business Payroll Operations
Determine whether the business is currently operating and running payroll, and if so, confirm that current taxes are being withheld and paid according to each pay cycle. Document the date payroll ended if inactive and whether the business remains in operation.
Step 6: Review Related Wage and Income Reporting Obligations
Verify that all Form W-2 documents and Form 1099-NEC filings have been submitted correctly and that any income withholding order for child support or spousal support is being processed.
Ensure compliance with personnel records requirements under the Fair Labor Standards Act and confirm that the New Hire Report was filed with the Department of Labor.
Step 7: Contact the State to Discuss Resolution Options
Call 701-328-7088 during business hours to explain awareness of the payroll tax delinquency and willingness to address it promptly. Ask whether the state accepts lump sum payment, partial payment, or payment plan arrangements, and inquire about penalty relief options.
Step 8: Prepare Financial Documentation
Compile recent business financial statements, bank statements, and profit and loss reports to demonstrate current financial capacity for repayment. Calculate the current monthly cash flow and determine the amount the business can realistically pay each month.
Step 9: Document All Communication with the State
Keep detailed records of every conversation, email, or letter exchanged with the Office of State
Tax Commissioner, noting dates, times, and substance of each contact. Request written confirmation of any agreements, deadlines, or options discussed verbally.
Step 10: Arrange Payment or Propose a Payment Plan
If full payment is possible, request payment instructions and include the business name, tax identification number, and notice reference on your payment. If payment is not immediately possible, prepare a written proposal outlining a realistic monthly payment schedule.
- Ignoring state notices: The state will not stop collection efforts, and ignoring notices
- Making partial payments without confirmation: The state may apply partial payments
- Assuming resolution without written confirmation: Verbal agreements with state
- Continuing current payroll tax nonpayment: If the business is still operating and not
- Deleting financial records or correspondence: Keep all documents related to the
- Confusing payroll tax with sales tax obligations: Payroll taxes involve income
- Failing to address back wages and overtime income: Employers facing payroll tax
- State tax notice review and response
- Penalty and interest reduction options
- Payroll and trust fund tax assistance
- Payment plan and relief eligibility review
- Representation with state tax agencies
Step 11: Implement Ongoing Compliance Measures
Establish a system for timely payroll tax withholding and tax payment if the business continues operating, including marking due dates with advance reminders. Consider whether your current payroll system or Timesheet App is adequate to maintain proper employment practices.
Understanding Related Tax Obligations
Employers with payroll tax issues should verify compliance with other state tax obligations to avoid compounding problems with tax collections. Sales and use tax obligations are separate from payroll taxes but monitored by the Office of the State Tax Commissioner. If your business collects sales tax, ensure Sales and Use Tax returns are filed on time, and your Sales Tax
Permit remains active with the correct permit number.
Common Mistakes to Avoid delays resolution while triggering escalating enforcement actions that become increasingly difficult to manage. to older tax years or penalties rather than current debt, so communicate payment allocation before remitting funds. staff should be followed up in writing to prevent misunderstandings about payment terms, deadlines, or account status. paying current taxes while addressing old debt, the state views this as ongoing noncompliance requiring aggressive action. payroll tax issue, including personnel records, payroll tax filings, and income tax return documentation, for future verification. withholding and unemployment insurance, while sales and use taxes involve collecting use tax from customers through different processes with separate filing requirements. issues may also have outstanding back wages or liquidated damages owed to employees, which can compound legal exposure alongside tax obligations.
Received a State Tax Notice?
If you’ve received a state tax notice and aren’t sure how to respond, we can help you review your options and next steps.
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