Treatment of Payroll Based Program Overpayments

(1) If an employer has overpaid income tax withholding, statewide transit tax withholding, or transit district payroll taxes due for a quarter and files an original or amended combined quarterly tax return or an original or amended statewide transit tax return, the department will refund the overpayment or apply the overpayment (roll over) toward the employer’s liability for the current or prior quarter if the employer responds to the department’s notice within 14 calendar days of the date of the notice.

(2) If an employer has overpaid income tax withholding, statewide transit tax withholding, or transit district payroll taxes due for a quarter and does not instruct the department how the credit will be treated within the timeframe established in section (1) of this rule, the overpayment will be rolled over as a payment toward the employer’s liability for that tax program for the subsequent quarter.

(3) If the department records show that the employer is no longer in business, and all returns have been filed, the overpayment will be refunded.