Tax IDs are unique identification numbers issued by the federal and state governments to businesses and individuals for tax purposes. Common Tax IDs include:
- Federal Employer Identification Number (FEIN): Issued by the IRS for federal tax reporting.
- State Tax ID (EIN): Each state will require companies that do business in the state to register to payroll related taxes such as: Income tax withholding, unemployment tax, transit taxes, paid family leave, disability taxes, local earned income, school district, and occupational privilege taxes.
Types of State Tax ID’s
- State Withholding Tax ID: Required in states that collect state income tax.
- State Unemployment Insurance Tax ID: Required for unemployment tax filings.
- State Paid Family Leave Tax ID: Required for states that have Paid Family Leave programs.
- Local Tax IDs: Required for businesses in some cities, regions and counties. Most local taxes are in: CO, LA, KY, OH, OR, MI, NJ, PA and WV.
Why Are Tax IDs Important?
Tax IDs allow Deel to:
✅ Report to the relevant government entities to ensure accurate allocation of tax remittances and filings
✅ File and pay federal, state, and local payroll taxes on your behalf.
✅ Ensure compliance with federal and state regulations, avoiding potential audits and penalties.
Without these IDs, your business may face:
❌ Delays in payroll tax payments or filings.
❌ Tax notices from federal or state agencies.
❌ Potential penalties, interest charges, or back payments.
❌ Employee issues with tax refunds or benefits claims (unemployment, paid family leave, etc.).
What Happens If You Don’t Provide Your Tax IDs?
If we do not receive your Tax IDs by the end of your first quarter with Deel, and the end of each quarter in which you’ve entered a new state:
🚨 Deel cannot file or pay taxes on your behalf.
🚨 You may receive tax notices from the IRS or state agencies, potentially including penalties and interest.
🚨 Your employees' personal tax filings may be delayed or rejected.
🚨 Unemployment and paid leave claims may be delayed for your employees.
🚨 Missing Tax ID Fees from Deel at the end of each quarter, $350 per missing Tax ID.
When Will You Need to Submit Your Tax IDs in Deel
You will need to provide your Tax ID information on the Deel platform during your onboarding journey, and anytime you hire an employee in a new state.
Deel cannot advise you on what Tax Registrations you will need, however, we can help you through the process of registering. You can find the Step-by-Step process for requesting State Registrations in the Step-by-Step Process for Setting Up a Deel Payroll – US Account article.
✅ Step 1 - From your Deel homepage, click the More icon followed by the Services tab. Click the US Registration card.
✅ Step 2 - Click Register to initiate the request
✅ Step 3 - Choose the registration type (Foreign Entity Registration or Deel Payroll – US Registration), select the states for registration, and specify the entity type.
Please note that if you have multiple Deel Payroll – US and/or PEO entities, please make sure you select the correct Deel Payroll – US legal entity the registration is for.
Once the request is submitted, either a link will be generated for the client to input additional information, or the request will be reviewed, and we will follow up within three business days.
How to Submit Your Tax IDs in Deel
Follow these steps to update your tax account information:
✅ Step 1 - From the homepage, in the For you today section, click View for Tasks
✅ Step 2 - Select Missing Registration Info and click Add
✅ Step 3 - Enter your missing Tax ID information.
If you have any questions, reach out to your Deel Customer Success Manager or Onboarding Manager.
FAQs
[ACCORDION] Why do I need to register for a state tax ID if I already have a Federal Employer Identification Number (FEIN)?
Each state issues its own unique tax ID numbers for state withholding tax and unemployment insurance. While some states may incorporate your FEIN into their tax ID format, registering for state tax accounts is still a separate process that must be completed. Even if the state uses your FEIN (with or without modifications), you are still required to officially register with the state to obtain the correct tax IDs needed for compliance.