Understanding ACH Debit and Credit Transactions

The term 'ACH debit or credit' refers to the type of systems used for electronic payment transfers. Taxpayers have various options to report information to the service, including voice, touch-tone telephone, personal computer, terminal, or mainframe.

One key player in this process is the State's data collection service, also known as a third-party vendor. This entity collects taxpayer information to facilitate ACH debit transactions. The CCD+ format combines the widely used CCD format with an addendum record that carries 80 characters of payment-related data, known as TXP.

ACH credit transactions are the converse of ACH debit transactions. In this method, taxpayers initiate an entry through their financial institution, crediting the State's designated bank account and debiting their own bank account for the amount of tax payment.

The Automated Clearing House (ACH) network facilitates electronic transfers through ACH debit or credit transactions. An entity that operates as a clearing house for these entries is known as an ACH operator, which works under agreement with a member association of the National Automated Clearing House Association (NACHA).

Ach debit or credit