STEPS TO BECOMING AN EMPLOYER IN OREGON

Before Hiring the First Employee:

1. If the business has not received an Employer Identification number, fill out an Application for Employer Identification Number, Form SS-4. After completing the form, you may telephone the IRS at 800-829-4933 to be issued your number immediately, you can fax the form to the IRS at 215-516-3990 or the form can be mailed to the IRS, Attn.: EIN Operation, Philadelphia, PA 19255. If the business already has an identification number, you must notify the IRS that the company will now have employees in order to receive employment tax forms. This may be done by telephoning the IRS at the above number, or by sending a copy of the original SS-4 form to the IRS together with a letter notifying the IRS that the company has become an employer.
    
2. Complete the Combined Employers Registration Form to register as an Oregon Employer.
    
3. Obtain Workers Compensation Insurance. This insurance is required for any business having employees (even if the employee is the spouse or child of a sole proprietor). The only exception to the coverage requirement is if the business has never in the past, and will never in the future, have payroll of more than $500 in any consecutive 30 day period.  To obtain coverage, contact your private carrier from whom you purchase your other insurance policies.  If you are unable to obtain coverage through your private carrier, you may need to obtain the coverage through the Assigned Risk Pool that requires higher premiums and deposits than other coverage.
    
4.  It is recommended that as an employer, you have basic written employment policies in place covering holidays, sick days, vacation, overtime, etc.
   
    

At the Time of Hiring a New Employee:

1. The employee needs to fill out an Employee’s Withholding Allowance Certificate, Form W-4. This form is kept in the company’s employment files.
    
2. The Employment Eligibility Verification Form, Form I-9, must be completed. The employee completes Part 1. The employer must fill in Part 2 after reviewing applicable documentation from the employee. This form is also to be kept in the company’s employment files.
    
3. The New Hire Reporting Form must be completed and filed with the Department of Justice (the address is on the form) no later than 20 days after the date the employer hires or rehires an employee.

After Employment has Commenced:

1. Payroll tax deposits must be made, typically on a monthly basis. Federal withholding and FICA taxes (both employer and employee shares) must be deposited at the bank using a Federal Tax Deposit Coupon, Form 8109. The IRS will send a supply of these forms after the company is registered as an employer. Oregon withholding tax must be mailed to the Oregon Department of Revenue on the same time schedule as the deposit of Federal taxes. The Oregon Department of Revenue will provide these forms. For most employers, these deposits will be due the 15th of the month for the previous month. For example the taxes for June payroll would need to be paid by July 15th.
    
2. Quarterly payroll reports are due the end of the month following the quarter-end. For example, reports for the first quarter that ends March 31st are due on April 30th. The Employer’s Quarterly Federal Tax Return (Form 941) is filed with the IRS, and the Oregon Combined Payroll Tax Report is filed with the Oregon Department of Revenue. Employers must also make a quarterly deposit of Federal Unemployment Tax if the liability is greater than $500.
    
3. Annual payroll reports are prepared in January for the previous year including Form W-2 to be provided to the employees, Federal and Oregon forms summarizing the W-2 information, and a Federal Unemployment Tax Return.
    
4. Workers Compensation reports are filed either on a quarterly or annual basis depending on the requirements of the policy.

Record Keeping

• Keep all records of employment and taxes for at least four years. These should be available for IRS review. Records should include:
• Your employer identification number
• Amounts and dates of all wage, annuity, and pension payments
• Amounts of tips reported
• Records of allocated tips
• The fair market value of in-kind wages paid
• Names, addresses, social security number, and occupations of employees and recipients
• Any employee copies of Form W-2 that were returned to you as undeliverable
• Dates of employment
• Periods for which employees and recipients were paid while absent due to sickness or injury   and the amount and weekly rates of payments you or third-party payers made to   them.
• Copies of employees’ and recipients’ income tax withholding allowance certificates (Forms   W-4, W-4P, W-4S, and W-4V)
• Dates and amounts of tax deposits you made and acknowledgment numbers for deposits   made by EFTPS
• Copies of returns filed, including 941Telefile Tax records and confirmation numbers
• Records of fringe benefits provided, including substantiation

Change of Address

It is very important to notify the IRS of your current address. If the IRS sends a notice to your old address, the post office may fail to forward, or forward after a lengthy delay. In some cases, the consequences could be costly.

For example, if the IRS is sending you a notice of a tax deficiency (or tax due), the notice will be delivered to your “last known address.” The IRS does not have to actually find you to give notice. Your defense of “I never received the notice” is ineffective. If the IRS is in error, you lose the right to contest the matter in Tax Court after 90 days. You can still contest in Federal District Court, but you will have to pay the tax first, and there can be other tactical disadvantages. If you do owe the tax, penalties and interest will continue accrue until you pay it.

Once you file a tax return showing your new address, the IRS will make the change itself, but only after the return is processed. To be safe, you should notify the IRS of the change directly.

For your convenience, we have enclosed Form 8822, which you can use to notify the Internal Revenue Service of your new address. Be sure to sign Form 8822 and send it to the Internal Revenue Service Center where you filed your last tax return.

To notify the Oregon Department of Revenue, you must call (503) 378-4988 and give your current address to a representative.

Private Delivery Service

You can use certain private delivery services designated by the IRS to mail tax returns and payments. If you mail by the due date using any of these services, you are considered to have filed on time. The most recent list of designated private delivery services was published in August 1999.