When a company partners with a PEO provider like Deel, both companies enter into a co-employment relationship.

Each state agency requires certain types of reporting methods for PEOs and their clients.

This article details three PEO reporting methods used by PEOs, each determining how payroll taxes are filed and paid to agencies :

• PEO-Level Reporting,
• Client-Level Reporting,
• Hybrid-Level Reporting.

To know more about State Payroll taxes refer to this article Understanding PEO Payroll Taxes.

In this Article 

PEO-Reporting, Client-Reporting and Hybrid Reporting States

Frequently Asked Questions

PEO-Reporting, Client-Reporting and Hybrid Reporting States

In a co-employment relationship with Deel PEO, states are classified into three primary categories to ensure compliance and streamline SUI operations: PEO-Reporting, Client-Reporting, and Hybrid Reporting States.

[ACCORDION]PEO-Reporting States

• Deel acts as the Employer of Record for SUI tax in PEO-Reporting states.
• We will manage the filing process under our Employer Identification Number (EIN) and SUI account number.

If your team already has an active SUI account in a PEO-reporting state, it should be closed to prevent potential fines and notices.

Deel PEO-Reporting States: 

Alabama, Arizona, Colorado, DC, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Maryland, Missouri, Montana, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Texas, Utah, Virgin Islands (US), Virginia, West Virginia, Wisconsin.

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[ACCORDION]Client-Reporting States

In client-reporting states, employers are mandated to file SUI tax using an unemployment account linked directly to their Employer Identification Number (EIN).

• If the client already has their own account in one of the states listed below, we will require third-party access (TPA) to the client's account to collect information such as the account number and current rate to file the tax on their behalf. 

Please note that if your team joins mid-quarter, we may wait until after your previous provider files to request TPA. 

• If the client does not have their own account but has employees working in one of the states below, Deel will register an account in the applicable state on the client's behalf.

Please note that any other corporate tax filings or business registrations will have to be handled by your company directly, outside of Deel. 

Deel Client-Reporting States: 

Alaska, California, Connecticut, Delaware, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Vermont, Washington, and Wyoming.

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[ACCORDION]Hybrid-Reporting States

In hybrid reporting states, PEOs will file and pay tax returns and liabilities under a client account assigned by the agency linked to the PEO.

• Deel PEO will file and pay individual returns and liabilities under each Client’s state-assigned account, which will be linked to Deel PEO’s FEIN.
  

Deel Hybrid-Reporting States: 

Arkansas, Kansas, Maine, and Tennessee.

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Frequently Asked Questions

[ACCORDION]Do I need to open a State Withholding Account (SIT) for every new state I hire in?

In a PEO partnership with Deel, we handle all filing responsibilities for the client's company across all states. This means that if the client hires an employee in a new state, they do not need to initiate any new State Withholding Account (SIT).

If the client were using a different payroll provider before transitioning to Deel, they probably have existing withholding accounts that should be closed. However, it's important not to close these accounts until the previous provider has completed the necessary filings for the last quarter you were under their services.

During the period the client was with their previous provider, they are accountable for fulfilling all quarterly and annual filings and reconciliations.

[ACCORDION]How do I find the EIN or EAN number for unemployment ? 

The Employer Identification Number(EIN) or EAN number for Unemployment can be found on Prism. 

Steps to find this number:

1. Log in to Prism
2. Click on Client and select Client details
3. Click on Tax tab, and find the state where the Employee is located under State Tax Setup.
4. Provide the State Unemployment Insurance ID number.

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