H.R. 6458: Electronic Filing Improvement and Logistical Efficiency Act of 2025

The Electronic Filing Improvement and Logistical Efficiency Act of 2025 aims to enhance the electronic filing process for employment taxes. Here’s a breakdown of what the bill proposes:

Key Provisions

The bill emphasizes the need for businesses and their representatives to file all employment tax forms electronically. It addresses the challenges posed by the current reliance on paper filings and aims to shift towards full automation in the filing of employment taxes.

IRS Requirements

Within one year of the bill’s enactment, the Internal Revenue Service (IRS) must:

• Implement a fully-automated electronic process for employers to file and pay employment taxes, including amended returns.
• Prioritize the availability of electronic filing for specific forms, such as the adjusted employer's quarterly Federal tax return (Form 941-X).
• Make technical and business changes to streamline the electronic filing process, ensuring it is efficient and user-friendly.

Tax Credits for Electronic Filing

The bill introduces a tax credit for employers who file their employment tax returns electronically:

• Employers will receive a $1,000 credit for the first calendar quarter when they file all required returns and payments electronically.
• In the following year, they may claim an additional $1,000 credit for one quarter of electronic filings.
• This credit can carry forward if it exceeds the employer’s applicable employment taxes for that quarter.
• Employers who do not file electronically in future quarters may see their taxes increase by the amount of the credit previously claimed.

User Fees for Paper Filings

The bill proposes a user fee for employers who file paper returns instead of electronically:

• A fee of $250 will be charged for any paper submission of quarterly or annual returns related to employment taxes.
• There are exceptions to this fee, including for businesses with no electronic filing requirements, first-time paper submissions, and those facing geographical barriers or emergencies.
• Third-party payroll providers that have a high rate of electronic filing (99% or more over the previous year) will not be subject to this user fee.

Effective Dates

The provisions regarding tax credits will apply to calendar quarters beginning after the bill is enacted. The user fee amendments will come into effect for returns due for periods ending two years post-enactment.

Congressional Intent

The bill expresses the intent of Congress that:

• Employers and their representatives should transition to electronic filing.
• The current reliance on paper methods is unsustainable and should be addressed to improve efficiency.
• Obstacles to electronic filing should be minimized through structural changes and incentives.

Relevant Companies

• ADP (Automatic Data Processing, Inc.) - A significant player in payroll and HR services that may benefit from increased electronic filing and payment processes.
• INTU (Intuit Inc.) - Provides financial and business software solutions, including tax filing software that could see increased usage following the bill's implementation.