Payroll Taxes

Learn more about keeping your business compliant with payroll tax requirements.

Employee and Contractor Payroll Tax Information Report Requirements by State

Employers in states that impose an income tax are required to report to employees the amount paid to them in taxable compensation and the amount withheld from their wages for income taxes for the year. Some states also require reports for the amount of compensation paid to independent contractors to be provided.

When you hire your first employee, you'll need to get a federal employer identification number (EIN) from the IRS if you do not already have one for your business. You may also need to get state and local tax numbers as well.

Properly handling payroll tax responsibilities involves making sure that:

  • Your federal and state taxes are paid and reported to the appropriate tax agencies
  • You properly report income, amounts withheld, and amounts paid on behalf of employees and contractors
  • You maintain the required federal and state records

Accurate and timely compliance is the key to avoiding payroll tax penalties!

For federal payroll tax purposes, you will have both tax return reporting and tax depositing obligations.

  • Federal tax deposits must be made on a periodic basis
  • Federal tax returns must be filed on a quarterly or annual basis

It is important to note that different deposit rules apply to income and FICA (social security) taxes and to FUTA (federal unemployment) taxes.

For a detailed summary about payroll tax information reporting requirements, we have the following article: Understanding Payroll Tax Payment and Filing Requirements

If you are looking for payroll tax information reporting laws specific to your state or jurisdiction, please visit the respective secretary of state or department of labor site. 

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