Guide
Hired someone in a new state?
One hire in a state you have never operated in usually means two tax accounts at two agencies, a new hire report on its own clock, and sometimes an entity registration that has to happen first. Here is the order it goes in, and the parts that catch people out.
What has to happen, in order
§01
Check whether the entity has to register with the state first.
Several states expect a company to be registered to do business there, often called a foreign qualification, before it employs anyone. Where that applies it comes first, because the tax registrations can depend on it. This is a Secretary of State filing, separate from anything tax related, and it is the step most often discovered last.
§02
Open a state withholding account.
In most states you withhold state income tax based on where the employee performs the work, not where your office is. That means a withholding account with the employee's state, opened before the first pay run. Nine states have no wage withholding at all, so this step disappears entirely in Texas, Washington, Tennessee, Florida, Nevada, South Dakota, Wyoming, Alaska, and New Hampshire.
§03
Open a state unemployment account.
Unemployment insurance is almost always a separate account at a separate agency from withholding, even in states where one application starts both. Colorado and Illinois register you for both with a single application and then treat them as independent for everything afterwards. Washington uses three agencies. California is the outlier that genuinely keeps everything in one account.
§04
Check for the extra programmes that state runs.
Depending on the state and sometimes on your headcount, there may also be state disability insurance, paid family and medical leave, or workers' compensation to register for. These are easy to miss because they are not part of the two accounts everyone expects, and they are not the same list in any two states.
§05
File the new hire report.
Every employer has been required since 1997 to report new hires, and rehires of former employees separated for more than 60 days, to the state's new hire registry, generally within 20 days of employment. It is quick, it is separate from payroll tax registration, and it has its own clock.
§06
Work out whether reciprocity changes the answer.
Some states have reciprocity agreements letting an employee who lives in one state and works in another pay tax only where they live. Where that applies and the employee provides the right documentation, you may withhold for the home state rather than the work state. Whether it applies to your situation is a question for your CPA, not for us.
What catches people out
The deadline is your first pay date, whatever the statute says.
California requires registration within 15 days of paying more than $100 in wages in a quarter, a threshold most employers cross on their first pay run. Even where the stated window is longer, an unregistered employer cannot remit withholding correctly or file the first quarterly report, so the practical deadline is always the first pay date. That is why this work usually arrives urgently.
A remote employee creates the obligation on their own.
An employee working from a state where you have no office can create nexus there, which brings registration, withholding, and filing obligations with it. There is no office and no deliberate expansion, which is exactly why it surprises people. One person moving house can put you in a new state.
Pennsylvania has a third layer under the two accounts.
Employers in Pennsylvania also deal with local Earned Income Tax and Local Services Tax, collected by local collectors rather than by the state. Two state accounts are not the whole job there, and the local piece is not something the state registration will prompt you about.
Your account number is not your EIN.
Pennsylvania issues an eight digit withholding number distinct from both the federal EIN and the state Revenue ID, with the UC number a third thing again. Arizona issues an eight digit unemployment account number alongside the withholding number. Payroll software given the wrong one fails quietly, usually at the worst possible moment.
Getting the account list right matters more than filing fast.
The number of accounts, the agencies, the thresholds, and the extra programmes all vary by state and sometimes by headcount. Working out the correct list before anything is filed is what prevents a second round of registrations three months later, and it is most of the value in having someone else do this.
What we do and what we do not
Tell us the state and the first pay date and we will work out which accounts you need, open them, and give you the account numbers and deposit schedules your payroll system asks for. One flat price per account, and any state fee passed through at cost.
What we will not do is tell you whether a worker should be an employee or a contractor, whether reciprocity applies to a particular person, or how a hire affects your tax position. Those are questions for a CPA or an attorney. Regcrest is a document preparation and filing service, not a law firm or a CPA firm, and nothing here is legal or tax advice.