Why your tax payment was rejected and what happens next

A rejected tax payment in QuickBooks Desktop usually means the IRS or your state tax authority sent back your submission because of a data mismatch, a missing piece of information, or a problem with your bank account on file. The rejection itself is not permanent—you can resubmit—but you need to understand what went wrong first, because submitting the same incorrect information again will fail in the same way.

When a payment is rejected, QuickBooks does not automatically refund the money. If the IRS or state pulled funds from your bank account before rejecting the submission, that money sits in a holding status for 5 to 10 business days, then returns to your account. During that time, your bank may show the transaction as pending or reversed. You should not resubmit a payment until you confirm the first attempt actually failed and the funds have returned.

The rejection notice itself—whether it arrives as an email, a letter, or appears in your IRS or state tax portal—will tell you the specific reason. Common reasons include a mismatched Employer Identification Number (EIN), a name or address that does not match IRS records, a bank account number that is incorrect or closed, or a payment amount that does not match what the IRS expects based on your return.

Key Takeaways

  • Check your rejection notice first to find the exact reason—do not resubmit until you know what went wrong.
  • Confirm that rejected funds have returned to your bank account before attempting to resubmit, which usually takes 5 to 10 business days.
  • Correct the information in QuickBooks (EIN, business name, bank details, or payment amount) before you resubmit the payment.
  • Resubmit through the same method you used the first time—either through QuickBooks' built-in payment feature or by creating a new payment record if you paid manually.
  • Keep a record of both the rejected payment and the resubmission for your tax file, in case the IRS or state asks about the discrepancy later.

Finding the rejection notice and understanding the error code

The IRS and most state tax agencies send rejection notices to the email address on file with your business tax account. Check your email inbox and spam folder for messages from the IRS (irs.gov) or your state's Department of Revenue. The notice will include an error code or a plain-language explanation of what did not match.

If you do not see an email, log into your IRS Online Account (at irs.gov/payments) or your state tax portal and look for a message or status update on the payment itself. The IRS portal shows the status of each payment you have submitted—accepted, rejected, or pending. Click on the rejected payment to see the reason.

Write down the exact error code or reason before you do anything else. Common codes include "Invalid EIN," "Name Mismatch," "Account Number Invalid," or "Payment Amount Does Not Match Return." If the notice is unclear, call the IRS at 1-800-829-1040 (for federal) or your state tax agency's payment line and read them the error code. They can tell you exactly what information needs to be corrected.

Checking that your rejected funds have returned to your bank account

When the IRS or state rejects a payment, the funds do not disappear—but they do not when ready bounce back either. The process usually takes 5 to 10 business days. During this time, your bank may show the transaction as "pending," "reversed," or "returned." Do not resubmit a payment until you see the money back in your account and the transaction is no longer showing as pending.

Log into your business bank account online and look at the transaction history for the date you submitted the payment. If the transaction still shows as pending or if the funds are still missing after 10 business days, contact your bank and ask them to confirm the status of the rejected payment. Provide them with the confirmation number from your original QuickBooks submission.

Once the funds are back and the transaction is closed, you are ready to correct the information and resubmit. If you resubmit before the funds return, you risk paying twice—once from the failed attempt and once from the new submission.

Correcting the information in QuickBooks Desktop

Open QuickBooks Desktop and go to Employees menu, then Payroll Tax (or Taxes depending on your version). Find the payment record that was rejected. Do not delete it—instead, mark it as rejected or void so you have a record of what happened.

Now create a new payment record with the corrected information. The most common fixes are:

  • EIN mismatch: Go to Company menu, then Company Information, and verify that your EIN is entered exactly as it appears on your IRS documents—no spaces, no dashes unless the IRS form shows them. The IRS system is strict about formatting.
  • Business name mismatch: Check that your business name in QuickBooks matches the name on your most recent tax return. If you recently changed your business name, the IRS may still have the old name on file. You may need to file a name change form (Form 8822-B for federal) before resubmitting.
  • Bank account number error: Verify the account number and routing number by checking a blank check or your bank statement. A single digit wrong will cause rejection. Some banks use different routing numbers for ACH payments versus wire transfers—confirm which one QuickBooks is using.
  • Payment amount mismatch: Compare the amount you submitted to the amount shown on your tax return or notice. If you are paying a balance due, the amount must match exactly. If you are making an estimated payment, make sure the amount matches what you calculated or what the IRS sent you.

After you correct each piece of information, save the changes and review the payment record one more time before submitting.

Resubmitting the payment through QuickBooks

Once you have corrected the information, go back to the payment record in QuickBooks and select Submit Payment or Send Payment (the exact wording depends on your QuickBooks version). QuickBooks will ask you to confirm the payment method—bank account or credit card—and the amount.

If you originally paid by bank account (ACH), use the same method again. If you originally paid by credit card, you can switch to bank account if you prefer, but stick with the same method if possible so the IRS does not see two different payment sources for the same tax obligation.

After you submit, QuickBooks will give you a confirmation number. Write this down and keep it with your tax records. The IRS or state will send you a new confirmation email within 1 to 2 business days. This time, the payment should show as "accepted" or "pending" rather than "rejected."

If the second submission is also rejected, do not resubmit a third time without calling the IRS or your state tax agency. A pattern of rejections usually means there is a problem with your account setup that needs to be fixed outside of QuickBooks—such as a name mismatch in the IRS system itself, or a hold on your account.

What to do if the payment is rejected a second time

If your resubmission fails again, the problem is likely not a data entry error in QuickBooks. Instead, there may be a mismatch between what QuickBooks is sending and what the IRS or state has on file for your business.

Call the IRS at 1-800-829-1040 or your state tax agency's payment line and explain that you have submitted the payment twice and both were rejected. Ask them to review your account and tell you exactly what information they have on file—your legal business name, your EIN, your address, and any notes about holds or flags on your account. Write down everything they tell you.

If there is a mismatch (for example, the IRS has your old business address or a slightly different version of your name), you may need to file a correction form or call back to update your account before you can submit a payment. The IRS can sometimes update information over the phone, but state agencies often require a written form.

In the meantime, you can also try paying through the IRS Direct Pay system (irs.gov/payments/direct-pay) or your state's online payment portal instead of through QuickBooks. These systems sometimes accept payments that QuickBooks rejects, because they pull information directly from the IRS or state database rather than relying on what you enter in your accounting software.

Keeping records of rejected and resubmitted payments

Save every confirmation number, rejection notice, and resubmission confirmation in a single folder—either digital or paper. If the IRS or state ever questions whether you paid, you will need to show the timeline of what happened.

In QuickBooks, mark the original rejected payment with a note in the memo field that says "Rejected on [date], resubmitted on [date]." This way, when you or your accountant review your tax records later, you will see both transactions and understand that they are part of the same payment, not two separate payments.

If the payment eventually posts to your account (which it should after a successful resubmission), the IRS or state will send you a final confirmation. Keep that too. Your tax file should show: the original submission, the rejection notice, the resubmission, and the final acceptance confirmation.

Frequently Asked Questions

How long does it take for a rejected payment to come back to my bank account?

Most rejections result in a return within 5 to 10 business days. Your bank may show the transaction as pending or reversed during this time. If the funds do not return after 10 business days, contact your bank with the original payment confirmation number and ask them to trace it.

Can I resubmit a rejected payment the same day it was rejected?

You can resubmit when ready if you know what the error was and you have corrected it in QuickBooks. However, wait until the original funds have returned to your account to avoid the risk of paying twice. If the rejection was due to a data error, resubmitting the same day with the corrected information is fine.

What if I submitted the payment through QuickBooks but the IRS says they never received it?

This can happen if the payment was rejected before it reached the IRS system. Check your QuickBooks confirmation number and the status in your IRS Online Account. If QuickBooks shows the payment as submitted but the IRS shows nothing, the payment likely failed in transit. Resubmit with corrected information, and keep both confirmation numbers for your records.

Do I need to file an amended return if my payment was rejected and resubmitted late?

No. As long as you resubmit within a reasonable time (a few weeks), the IRS and most states will not penalize you for the delay. The key is to show that you attempted to pay on time and that the rejection was not your fault. Keep your rejection notice as proof.

Can I pay by credit card instead of bank account if my bank account keeps getting rejected?

Yes. If your bank account information is the problem, switch to a credit card payment. However, credit card payments through the IRS or state usually come with a processing fee (2 to 3 percent). You can also try paying through the IRS Direct Pay system or your state's online portal, which may accept the same bank account information that QuickBooks rejected.