Payment Date and Effective Date for Payment Events (2024)

This section discusses the payment and effective dates used in payment events.

By default, the payment and effective dates are equal but the algorithm used to create the payment may calculate the dates differently based on business rules.

A payment event records a payment date and an effective date. The payment date should be the date that the payment was considered "received". This could be the system date or it could be a postmark date. The effective date is used to populate the effective date of the payment segment's financial transactions and is the date that the payment should affect penalty and interest.

The following examples illustrate when the effective date may differ from the payment date:

• Consider the following collections scenario. A collections notice is sent to a taxpayer with penalty and interest forecasted to a future date (for example, the 30th). If the payment is received (postmarked) on the 20th, this date is used as the payment date. However, your organization's business rules may dictate that for P&I purposes, the payment should be considered effective on the 30th (the date noted in the collection notice). In this case the distribution algorithm that directs this payment to a collection notice should set the payment effective date to the 30th. This ensures that penalty and interest will be calculated according to what was forecast.

• Consider an obligation whose filing period due date is April 15th, where the payment grace days on the obligation type is 3. If the taxpayer files and pays on April 17th, the payment distribution algorithm determines that this is within the grace days and sets the effective date to the 15th. In this case the payment date would still be the 17th.