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You’ve got your business’s federal payroll reporting down, but now… you’re facing an entirely new set of requirements — state payroll reporting. 

The confidence you felt just a few moments ago has turned into stress as you’re unsure what state withholding, unemployment insurance (UI), and new-hire reporting even are. 

Fortunately, there’s a simple solution: learn the fundamentals of state payroll reporting.

State-by-State Payroll Reporting Requirements

Before jumping into our overview, it’s crucial to note that the exact reporting requirements vary by state. Each state has its own requirements, collection methods, deadlines, and other details, and some don’t require state withholding. 

For specific requirements, visit our state page or contact your state agency.

What is State Withholding? 

Just like federal income tax withholding, state withholding is the amount withheld from employee wages to cover state income tax. 

However, it’s different in that each state establishes its own tax laws, withholding formulas, filing requirements, and payment schedules, meaning no two states have the same withholding form or requirements. 

It further differs in its use. Whereas federal withholding funds support national government programs and services, state withholding supports state-level services such as education, transportation, and more. 

How State Withholding Works

To begin your state withholding journey, you’ll typically register for a state withholding account with your state agency (if required) and start withholding state tax from your employees’ wages in accordance with your state’s rules, with the amount withheld depending on factors such as the employee’s:

• Earnings
• Work location
• State of residence
• Withholding elections

From there, periodically send withheld taxes to the state agency and file withholding returns by the applicable deadline, which is usually:

• Monthly
• Quarterly
• Or annual

Example: North Carolina’s state withholding forms are NC-5 and NC-5Q; which form you file and when depends on your monthly withholding amount.

Also keep in mind that certain states don’t impose income tax withholding, so withholding taxes won’t apply. 

Have employees who work remotely or live in another state? If so, another layer of complexity is added: determining which state’s withholding rules apply and whether a reciprocal agreement is in place, which may mean you withhold income tax only for the employee’s state of residence.

What is Unemployment Insurance? 

Unlike state withholding, UI is a joint federal-state program that provides temporary wage-replacement benefits to eligible unemployed workers.

States run their own UI programs in accordance with federal requirements, allowing for state-level variation while maintaining overall program alignment.

How UI Reporting Works

The first step is registering with your state’s unemployment agency, which will assign your unemployment tax rate that’s based on factors like:

• Industry
• Employer experience rating
• Benefit changes
• Length of business operation

As an employer, you’ll usually pay these taxes, but certain states do have employee UI contributions.

Also, keep in mind that every state establishes its own:

• Wage base
• Tax rates
• Forms
• Filing portal
• Deadlines

Throughout the year, employers generally report employee wages and pay unemployment taxes according to their state’s filing schedule.

Examples: Texas reports UI with Form C-3, whereas North Carolina uses Form NCUI-101. Note that some states combine state withholding and UI reporting into a single form, such as California’s Form DE-9. 

What is New Hire Reporting? 

Also stemming from federal requirements, new hire reporting notifies your state when an employee is hired or rehired. However, each state still operates its own new hire program and establishes its own submission methods and deadlines. 

Regardless of business size, most employers are required to report new hires and rehires to support state agencies with information that helps with:

• Enforcing child support orders.
• Reducing unemployment insurance fraud.
• Maintaining accurate employment records.

How New Hire Reporting Works

Welcoming a new employee or rehiring a former one is exciting, but it also requires collecting basic information to submit to your state’s new-hire reporting agency — typically within 20 days of hire. 

Required information often includes:

• Employee name, address, and Social Security number
• Employer name, address, and Federal Employer Identification Number
• Employee hire date

Reports can often be submitted by mail or electronically for ease of compliance, but this depends on the state. 

Example: Florida uses Form NHR to report new hires within 20 days of hire.

TaxBandits and State Payroll Reporting

Still feel overwhelmed? It’s a lot, and state variation adds complexity, especially if you’re a multi-state employer. So… let’s make it simple.

TaxBandits supports numerous state withholding, UI, and new hire e-filings, with a guided workflow and an address book that connects your federal filing information to your state forms for a seamless payroll reporting process.

Also, you’re never filing alone. We’re committed to your filing success, so visit our Knowledge Base for immediate answers or connect with our support team via email, live chat, and phone for personalized assistance.

Is your state not supported yet? Don’t worry! More states are planned for release by the end of 2026.