Timely initiation of electronic funds transfer

(a) Criteria for a timely electronic funds transfer. (1) General criteria. An EFT is timely if: the EFT process has been completed; the funds have been deposited in the department's designated bank account; and the funds are available for immediate use by the state of Connecticut on or before the due date for the tax. (2) For purposes of this section, when an employer remits income tax deducted and withheld from employee wages, "due date" means the next business day after the due date. (b) Funds available for immediate use. (1) ACH Debit Method. For the funds to be deposited in the department's designated bank account and available for the state of Connecticut's immediate use on or before the due date for the tax, a taxpayer using the ACH debit method shall initiate the EFT by 4:30 p.m. Eastern Time (or any earlier time that the department specifies) on or before the last business day before the date the EFT must be completed. (2) ACH Credit Method. For the funds to be deposited in the department's designated bank account and available for the state of Connecticut's immediate use on or before the due date for the tax, a taxpayer using the ACH credit method shall initiate the EFT on or before the deadline set by the taxpayer's bank or any earlier time that the bank specifies if the due date (or even the bank's deadline) falls on a Saturday, Sunday or legal holiday. (c) Proof of payment. A statement prepared by the taxpayer's bank showing a transfer that decreases the taxpayer's account balance is proof of payment if the statement shows the amount and date of the transfer and identifies the payee as the state of Connecticut. (d) Failure to pay tax on time by EFT. (1) Subject to the provisions of section 12-3a of the Connecticut General Statutes and to the provisions of the chapter or section that impose the tax, the commissioner may waive all or part of a penalty for late payment of the tax when it is proven to his or her satisfaction that the failure was due to reasonable cause and was not intentional or due to neglect. (2) A taxpayer's failure to pay tax on time by EFT is due to reasonable cause, and not intentional or due to neglect, if the taxpayer proves to the commissioner's satisfaction that the circumstances that caused the failure were beyond the taxpayer's control. (e) Penalty waiver criteria for ACH debit transactions. In an ACH debit transaction, the department or its designated agent originates the transaction when it gets instructions from a taxpayer and is responsible for the accuracy of the transmission. The penalty shall be waived if the taxpayer can prove to the commissioner's satisfaction that it has: (1) Given timely instructions to the department's designated agent; (2) Been provided a confirmation number by the department or its designated agent; and (3) Had sufficient funds available in the account to pay the tax. (f) Penalty waiver criteria for ACH credit transactions. In an ACH credit transaction, the taxpayer originates the transaction through its own bank and is primarily responsible for the accuracy of the transmission. The penalty shall be waived if the taxpayer is able to prove to the Commissioner's satisfaction that it: (1) Initiated the transaction on time; (2) Provided complete and correct information for the addenda record; and (3) Had sufficient funds available in the account to pay the tax.