Payroll Tax Issues-Hiring New Employees

Employment Eligibility

It is the employer’s responsibility to verify that each new employee is legally eligible to work in the United States. The employer is required to get the U.S. Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification from the new employee. You can pick up a copy at our office or at https://www.uscis.gov/i-9.

Several important points on the I9 form:

• Check the date of the form and make sure you are using the most current form
• Employee fills out the first page(Section 1) and must sign and date the form
• Employer fills out the 2nd page(Section 2) and must sign and date their section
• And finally, if it is a rehire situation, you must fill out Section 3 of the form.

Reporting A New Hire

All States require an employer to report any new employee to a designated state new hire registry. In Washington State there are several ways to report them, see New Hire Reporting.

Definition: A new employee is an employee who hasn’t previously been employed by you or was previously employed by you but has been separated from any prior employment for at least 60 consecutive days.

Many other states will accept a copy of Form W-4 with employer information added. Visit the Office of Child Support Enforcement website at acf.hhs.gov/programs/css/employers for more information.

Request A Completed W-4

Ask all new employees to give you a signed Form W-4 when they start work. Make the form effective with the first wage payment. If a new employee doesn’t give you a completed Form W-4, withhold income tax as if he or she is single, with zero withholding allowances.

Name and Social Security Number (SSN)

You’re required to get each employee’s name and SSN and to enter them on Form W-2. This requirement also applies to resident and nonresident alien employees. You should ask your employee to show you his or her social security card. The employee should show the card if it is available.

Beware: Don’t accept a social security card that says “Not valid for employment.” A social security number issued with this legend doesn’t permit employment.

You may, but aren’t required to, photocopy the social security card if the employee provides it. If you don’t provide the correct employee name and SSN on Form W-2, you may owe a penalty unless you have reasonable cause.

If you have questions or any issues with any of this, feel free to give us a call at 509-543-7600.