What is an International ACH Transaction (IAT)?
Pursuant to the National Automated Clearing House Association (NACHA) rules, an IAT is an ACH Debit or ACH Credit payment funded by a financial institution or agency outside of the territorial jurisdiction of the U.S.
How do I know if my payment is an IAT?
The payment is an IAT if it is specifically funded with money from a financial institution outside of the United States. To help make the determination, consider the following questions:
- Is your business located outside of the United States?
- Is your business a subsidiary of a multi-national company?
- Does your business have foreign subsidiaries?
- Is the tax payment being made with funds transferred into your domestic bank account from a financial agency located outside of the United States?
A “no” answer to all four questions suggests your payment is most likely not an IAT.
A “yes” answer to any of the first three questions would be an indicator that the payment might be an IAT. However, the determining factor of whether the payment is an IAT is the source of the funding for the payment (question 4). If the payment is specifically funded, dollar for dollar, by an international financial institution or agency outside the United States then the payment is an IAT. If you are unsure, ask your bank for assistance.My tax payment is internationally funded. Can I initiate an ACH Debit method payment through the Paperless Filing & Payment System?
No. At this time the Paperless Filing & Payment System does not process internationally funded ACH Debit payments which require the new IAT format. Payment must be made by another method. To make an electronic payment you must contact your bank to initiate an ACH Credit payment.
I received a message on the confirmation page that because I indicated that my payment is funded internationally I must initiate an ACH Credit payment through my bank to pay the amount due. Has the return been filed?
Yes, if your confirmation number begins with an "N".
Am I required to make an electronic payment?
Payments that are $750 or greater are required to be made electronically through an Electronic Funds Transfer (EFT) method (Section 41-1-20(b)(2)(a), Code of Alabama 1975, as amended). If your payment is internationally funded you must contact your bank to initiate your electronic payment as an ACH Credit.
Except for withholding taxes and non-state administered local taxes, you may choose to pay a tax liability that is less than $750 by check.
How do I make an ACH Credit payment?
You must contact your bank to initiate the ACH Credit payment. Your bank should be able to answer your questions and handle the payment. However, you may call the Department of Revenue's EFT hotline at 1-800-322-4106 (and choose option number 7) should you need further assistance.
Do the IAT rules apply to both the E-File\E-Pay application and the Make a Payment, EPay only, application?
Yes. When utilizing the e-file\e-pay application, the confirmation page will instruct you to contact your bank to initiate your ACH Credit payment.
When utilizing the EPay only application, you will receive the following message once you indicate that your payment is internationally funded:
Where can I find additional information about IATs?
National Automated Clearing House Association (NACHA): www.nacha.org/IAT_Industry_Information/
The Federation of Tax Administrators: www.taxadmin.org/