Additional Steps for Out-of-State Employees – Set Up Tax Company for Out-Of-State Tax Processing
Use this procedure to set up a Tax Company to allow for collection of out-of-state taxes in HRMS.
The steps in this procedure are required prior to setting an employee’s Residence Tax Area (0207), Work Tax Area (0208), and Unemployment State (0209) infotype records with out-of-state tax areas and tax authorities.
Currently, Oregon and Idaho are the only states configured for out-of-state tax collection in HRMS. All other out-of-state taxes must be calculated and collected manually using the appropriate wage type listed in HRMS Other State Tax Wage Types by creating Recurring Payments/Deductions (0014) and/or Additional Payments (0015) infotype record for the employee. Refer to the Payroll Out-of-State Employee Tax Resources page for more information on manually processing taxes in HRMS.
Each agency must work directly with any state or local tax entity for which they collect taxes in Oregon and Idaho to obtain an Employer ID Number. This number is assigned by the state or local tax entity when you register as an employer and is unique to your agency. The Employer ID Number must be provided to OFM so that it can be configured in HRMS. This process must be completed or HRMS will not process the Oregon or Idaho taxes for your employees.
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Step 1
Work with each state and local tax authority that you will collect taxes for to obtain an Employer ID Number.
TIPS:The Employer ID Number is specific to your agency and is required for HRMS to process out-of-state taxes for your employee(s).
There are several tax authorities in Oregon and Idaho, so an agency may have multiple Employer ID Numbers.
Run the Out-of-State Tax Authority Locator Report to verify which tax areas and tax authorities might apply to your employees living or working in Oregon or Idaho; refer to the Out-of-State Tax Authority Locator report procedure.
Run the Federal State Local Employer Identification Numbers (ZHR_RPTPY061) report to view Employer ID Numbers currently set up in HRMS for your tax company. Refer to the Federal State Local Employer Identification Number (EIN) procedure for more information.
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Step 2
To request a new Employer ID Number be added to HRMS, email the completed Employer State ID Form to HeretoHelp@ofm.wa.gov. Include the following information:
- Tax Entity
- ID Number
- Tax Company
- Agency Name
TIPS:You can submit multiple Employer ID Numbers using the same Employer State ID Form.
The state of Idaho will assign one ID number to be used for all Idaho taxes when you register as an employer (refer to the Idaho Business Registration application).
The state of Oregon will assign one ID number to be used for all Oregon taxes that are administered by the Oregon Department of Revenue (refer to Oregon Combined Employer Registration). For employers subject to Canby Area Transit, Sandy Area Metro, or Wilsonville South Metro Area Regional Transit taxes, register separately with each applicable city.
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Step 3
Receive confirmation from OFM that your Employer ID Number has been added in HRMS.
TIPS:If you have submitted multiple Employer ID Numbers, you may receive separate confirmations for each. You can check to see if your Employer ID Numbers have been configured by running the Federal State Local Employer Identification Numbers report, or the Out-of-State Tax Authority Locator report, as these reports will indicate whether your agency is fully configured for the employee’s applicable residence and work tax area(s).
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Step 4
Once you receive confirmation from OFM that your Employer ID Number has been added in HRMS, follow the Additional Steps for Out-of-State Employees - Set Up Out-of-State-Employee user procedure to set-up an employee for automated out-of-state tax processing.