The Forms You Need to Get a New Worker Started
You’ve completed the hard work of putting out the help-wanted ad, conducting the interviews and choosing a new hire. Now it’s time to verify your new hire is eligible to work in the United States and get them set up on payroll. A few mandatory IRS new hire forms will help you complete the tasks.
First and foremost is Form I-9 for Employment Eligibility. Along with the I-9, they’ll need to produce an unexpired form of identification. This proves their identity and employment eligibility. Both citizens and non-citizens need to fill out an I-9. You need to keep the new hire’s I-9 on file for three years after the hire date or one year after they leave, whichever comes first.
Next, you’ll have to have your new hire complete a W-4 form – a Federal Income Tax Withholding form and a separate State Income Tax Withholding form (if required by your state). New hires must fill out their W-4 forms before they receive their first paycheck. This form tells you how much you need to take out of their pay for federal withholding. They have to indicate their marital status, number of dependents, number of allowances and any additional deductions. Employees can change the amount on their W-4 forms any time they want and as many times as they want, but you need to have their signature on the latest version and keep a copy for your records. If their marital status, number of dependents or anything else changes, they need to revise their W-4 forms to reflect it. You should not give your new hire advice on how to fill out their W-4 forms, as you should not be giving them tax advice. You should keep an employee’s W-4 on file for four years after they leave the company.
If your state has state income tax withholding, your new hires will also have to fill out an additional state withholding form.
Earned Income Tax Credit Form
Note that starting in 2011, you are no longer responsible for collecting an Earned Income Tax Credit form. Your employees are responsible for that when they do their taxes since it’s no longer administered through payroll. This means employees can’t receive this tax credit as an advance on their pay throughout the year, but rather as a lump sum when they get their tax return.
New Hire Reporting
In addition to collecting forms from your new hire, you need to report new hires to your State Employment Notification System (which sometimes you can do just by sending them a copy of the W-4). This helps them with collecting child support (if needed), monitoring unemployment compensation, worker’s compensation and other public programs.