Below are five common mandatory registrations for employers.
1. Federal Employer Identification Number
To do business as an employer, you must obtain an Employer Identification Number from the Internal Revenue Service. An EIN consists of nine digits and is unique to each employer, similar to how each person’s Social Security number is unique to him/her.
You need an EIN to withhold, pay and report federal employment taxes, which include federal income tax, Social Security tax, Medicare tax and federal unemployment tax.
According to the Small Business Association, you should apply for the EIN right after registering your business with your state. To immediately receive the EIN, apply online via the IRS website.
2. State/Local Tax Identification Number
Whether you need to obtain a state tax ID depends on whether you’re required to withhold or pay state employment taxes. Contact the state revenue agency to be sure.
For example, to withhold state and county income tax in Indiana, the business must first obtain a federal EIN from the IRS and then register with the Indiana Department of Revenue.
Some jurisdictions require employers to obtain a local tax ID number for local employment tax purposes. In this case, contact your local tax assessor for details.
3. State Unemployment Tax
Most employers must pay state unemployment tax at the rate assigned by the state workforce agency. In a few states, employers must also withhold State Unemployment Tax Agency tax from their employees’ wages.
You’ll need to register your business with your state’s workforce agency in order to obtain your SUTA tax rate, withhold and pay SUTA tax, plus file tax and wage reports.
SUTA tax registration rules vary by state. For instance, businesses with one or more workers in Pennsylvania must register with the Pennsylvania Department of Labor and Industry, Office of UC Tax Services, by the mandated deadline.
4. New Hire Reporting
Employers must report all new and rehired employees to the state agency that administers the state’s new hire reporting program. Typically, new hire reporting must be done within 20 days of the hire date, but some states require it earlier.
To conduct new hire reporting, you must register for an account with your state’s new hire reporting agency. Employers doing business in more than one state, also called “multistate employers,” may need to go through a special registration process to report new and rehired employees.
5. Workers’ Compensation Insurance
In most states, employers with one or more employees must carry workers’ compensation insurance. In addition, employers must register with the state workers’ compensation board by the required deadline.
Other types of registrations may be relevant to your business. For an exhaustive list, consult with a professional. Keep in mind as well that state and federal regulations can change with little notice, so be sure to keep on top of the relevant rules.