Close and Reopen a Tax Account

When a company is preparing to hire their first employee in a new state, you are usually required to register your business in that state. This ensures any applicable state tax filings can be paid and submitted to the appropriate tax agencies. When a company no longer has active employees in a state, and does not plan to hire any in the near future, it may be necessary to close the applicable state tax accounts. 

Companies will need to close the applicable tax accounts directly with the agency before letting Lattice know that the account has been closed. Lattice will not:

• Close a tax account with a tax agency on behalf of a customer or;
• Mark tax forms as “final”

Closing a tax account with an agency

Request that Lattice has successfully filed all of your outstanding returns before you close your tax account (see the table below for timing guidance). 

1. Contact the applicable tax agencies and close the accounts with them directly. 
2. Let Lattice know once the applicable accounts have been closed.

How will Lattice handle filings until formally notified of the account's closure?

Federal filings

• Form W-2s and 1099s
  • Lattice will file the company's last Form W-2s and 1099s to the Social Security Administration (SSA) at the end of the tax year
• Form 941
  • Lattice will not file $0 wage returns on Form 941 if you canceled your Lattice account for one of the following reasons:
    • The company went out of business
    • The company is being acquired by another company
    • The company no longer has employees to pay
  • If Lattice stops filing the quarterly Form 941 (in the situations above), the IRS believes your returns are missing, and they start to send notices. To avoid these, or if you receive any, contact the IRS directly to let them know you no longer owe payroll taxes and need to close your IRS account (formal notification required).

State filings 

• Lattice will file zero-wage tax returns to the agency for up to eight quarters of wage inactivity (no applicable wages).
  • Most state tax agencies will close your account automatically after eight quarters of inactivity. In these states, your payroll tax returns may start to reject, and Lattice will notify you that we will no longer file returns to this agency.
• Lattice will stop filing zero-wage tax returns to the agency after eight quarters of inactivity—or, up until you’ve you’ve notified Lattice that you closed your account with the state.

When to close your account to make sure filings are successful:

Reopen a tax account with an agency

Before letting Lattice know you’ve reopened an account, make sure you’ve completed the process with the agency first. 

Lattice will start filling with the applicable agency once the account has been reopened and Lattice has been informed.