Texas registration and tax info

Texas Workforce Commission (TWC) - unemployment tax

Reminder: Texas doesn't have state income tax.

Your company may not be liable for state unemployment insurance tax until the company has paid $1500 in wages during a calendar quarter. 

You can still pay your employees in Gusto while you wait for your unemployment account number and agency-assigned unemployment rate.

Running payroll in Gusto before you're liable for SUI

If you need to run payroll and do not yet meet the wage requirement above, Gusto allows it—we just suggest you add the "New employer SUI tax rate" specific to Texas in the meantime.

• You can find the new employer rates for each state in this article, along with instructions on how to update the rate once you become liable and receive your company-specific agency assigned rate.

You'll want to register with the TX Workforce Comission (TWC) as soon as you become liable—eventually, Gusto will need:

• Your unemployment account number—required to file and pay taxes on your behalf.
• Your company-specific unemployment tax rate—assigned by the agency.

Register for unemployment tax with the TX Workforce Commission (TWC)

Before you register

Have the following information on hand before you begin the registration process:

• Email address of the business contact.
• The current United States mailing address for the registering entity.
• The trade name and physical address of each business location in Texas.
• Owners', partners', or officers' social security numbers and residence addresses.
  • If the business was acquired from a previous owner, you'll need the name and address of the previous business owner 
• Payroll information including when the business first hired an employee, when the first wages were paid, and total quarterly wage payment amounts paid by the business for all locations.
• Knowledge of the principal activities or products of the business.

How to register—visit the TWC website

1. Register online by visiting the TWC website.
   • You'll be asked a few simple questions about your company details:
     • Company location
     • Federal EIN
     • Secretary of State ID
     • Important dates regarding your company's operations
2. You should receive your TWC Tax Account Number instantly after registering online.
   • The TWC unemployment account number format is: ##-######-#
     • The leading two digits will start between 00 and 20.
     • Political subdivisions and reimbursing employers (often non-profit businesses) are assigned an account number starting with 99.
3. You will also receive your Effective UI Tax Rate. When entering this in your Gusto account, be sure to include all five component rates:
   • General Tax Rate (GTR)
   • Replenishment Tax Rate (RTR)
   • Obligation Assessment Rate (OA)
   • Deficit Tax Rate (DTR)
   • Employment and Training Investment Assessment (ETIA)

If you have questions, contact the agency directly at (512) 463-2222.

Enter the tax account information in Gusto

Once a valid Texas work address has been added in Gusto for one or more employee(s), you can add your tax account information:

1. Click the Taxes & compliance section and select Tax setup.
2. Scroll to the "Texas Tax Setup" headline and select Manage taxes.
3. Enter your unemployment account number and agency-assigned unemployment rate.
   • The TWC unemployment account number format is: ##-######-#
     • The leading two digits will start between 00 and 20.
     • Political subdivisions and reimbursing employers (often non-profit businesses) are assigned an account number starting with 99.
   • When entering the unemployment rate in Gusto, be sure to include all five component rates:
     • General Tax Rate (GTR)
     • Replenishment Tax Rate (RTR)
     • Obligation Assessment Rate (OA)
     • Deficit Tax Rate (DTR)
     • Employment and Training Investment Assessment (ETIA)

Troubleshoot common errors and issues with unemployment account numbers

From time-to-time, employers enter an incorrect unemployment account number in Gusto. Here are some types of account numbers you should not enter as the TWC Unemployment account number:

• Federal employer identification number (FEIN)—issued by IRS
• A different state's unemployment tax account number
• Texas Secretary of State, or other state jurisdiction filing number or charter number
• Texas Comptroller of Public Accounts tax ID (i.e., franchise tax, sales and use tax, etc.)
• Your prior Professional Employer Organization (PEO)'s TWC UI Tax Account Number.
  
  • When an employer leaves a PEO and resumes employment of its own employees, the employer must:
    
    • Reopen their formerly closed TWC account number if they were with the PEO for less than 3 years.
    • Register for a new TWC UI Tax Account Number If they were with the PEO longer than 3 or if they never previously registered as an employer.
• "Errored" or duplicate UI Tax Account Number the TWC created in error.
  
  • A notification letter would have been mailed to the employer’s address of record when an account is "errored". The letter includes:
    
    • The correct, active UI Tax Account Number to replace the errored one with
    • The correct, active EID, to replace with the duplicate EID.
  • An errored account cannot be made active again.
• TWC non-liable UI Tax Account Number—this is issued when you set up an account before meeting the liability limit.
  
  • When this happens, a notification letter is mailed to the employer’s address of record informing them to register for a new UI Tax Account whenever they pay wages that meet the liability requirement.

Authorize Gusto as your payroll representative

Sign a form in your TWC account to authorize Gusto as your payroll representative so we can accurately pay and file your taxes.

1. Sign in to your TWC account.
2. Click the Account Info tab.
3. In the Quick Links menu, choose Third Party Authorization.
4. Review your account details and update them as needed.
5. Click Continue and use DocuSign to sign Form C-42.
6. Enter the following info in the Grantee section—this is Gusto's Service Agent information and should not be used for any purpose other than providing Gusto access to your account:
   • Grantee TWC Account Number: 140202401
   • Grantee Name: Gusto Inc
   • Street: 1201 16th St, Suite 350
   • City: Denver
   • State: Colorado
   • Zip: 80202
7. Click Grant Written Authorization, then click Finish.

Give Gusto access to your TWC account

You’ll receive an email from the TWC letting you know that Gusto requested access to your account. Giving us access means we can keep your tax details up-to-date in your Gusto account. 

1. After receiving the TWC email, sign in to your TWC account.
2. Click the User Admin tab.
3. In the Quick Links menu, choose Applicant List.
4. In the Action column of the table, choose Review.
5. On the Review Applicant page, you’ll see Gusto’s info—click Approve.
6. On the User Permissions page, make sure the following checkboxes are selected:
   • Manage wage reports
   • Make payment
   • View payment
7. Click Submit.
8. Once complete, sign in to Gusto, click to the Taxes & compliance section, and select Tax setup.
9. Under "Texas Tax Setup", click Manage Taxes.
10. Edit the “UI Registration” section to indicate "Yes, I have authorized Gusto."

If you've already registered with the TWC, you can find your unemployment account number and rate by:

• Signing in to your TWC account.
• Reviewing notices mailed to you by the TWC.
• Calling the TWC at (512) 463-2731.
• Emailing the TWC at [email protected].

If you're a recent new employer in the state, you may not be eligible to receive an unemployment account number until you've paid $1500 in wages in a quarter. If you have not paid that amount yet, enter the Texas-specific new employer rate found in this article in your Gusto account and register as soon as you've met the threshold.

Authorize Gusto as your payroll representative

Sign a form in your TWC account to authorize Gusto as your payroll representative so we can accurately pay and file your taxes.

1. Sign in to your TWC account.
2. Click the Account Info tab.
3. In the Quick Links menu, choose Third Party Authorization.
4. Review your account details and update them as needed.
5. Click Continue and use DocuSign to sign Form C-42.
6. Enter the following info in the Grantee section—this is Gusto's Service Agent information and should not be used for any purpose other than providing Gusto access to your account:
   • Grantee TWC Account Number: 140202401
   • Grantee Name: Gusto Inc
   • Street: 1201 16th St, Suite 350
   • City: Denver
   • State: Colorado
   • Zip: 80202
7. Click Grant Written Authorization, then click Finish.

Give Gusto access to your TWC account

You’ll receive an email from the TWC letting you know that Gusto requested access to your account. Giving us access means we can keep your tax details up-to-date in your Gusto account. 

1. After receiving the TWC email, sign in to your TWC account.
2. Click the User Admin tab.
3. In the Quick Links menu, choose Applicant List.
4. In the Action column of the table, choose Review.
5. On the Review Applicant page, you’ll see Gusto’s info—click Approve.
6. On the User Permissions page, make sure the following checkboxes are selected:
   • Manage wage reports
   • Make payment
   • View payment
7. Click Submit.
8. Once complete, sign in to Gusto, click to the Taxes & compliance section, and select Tax setup.
9. Under "Texas Tax Setup", click Manage Taxes.
10. Edit the “UI Registration” section to indicate "Yes, I have authorized Gusto."

Once a valid Texas work address has been added in Gusto for one or more employee(s), you can add your tax account information:

1. Click the Taxes & compliance section and select Tax setup.
2. Scroll to the "Texas Tax Setup" headline and select Manage taxes.
3. Enter your unemployment account number and agency-assigned unemployment rate.
   • The TWC unemployment account number format is: ##-######-#
     • The leading two digits will start between 00 and 20.
     • Political subdivisions and reimbursing employers (often non-profit businesses) are assigned an account number starting with 99.
   • When entering the unemployment rate in Gusto, be sure to include all five component rates:
     • General Tax Rate (GTR)
     • Replenishment Tax Rate (RTR)
     • Obligation Assessment Rate (OA)
     • Deficit Tax Rate (DTR)
     • Employment and Training Investment Assessment (ETIA)

Troubleshoot common errors and issues with unemployment account numbers

From time-to-time, employers enter an incorrect unemployment account number in Gusto. Here are some types of account numbers you should not enter as the TWC Unemployment account number:

• Federal employer identification number (FEIN)—issued by IRS
• A different state's unemployment tax account number
• Texas Secretary of State, or other state jurisdiction filing number or charter number
• Texas Comptroller of Public Accounts tax ID (i.e., franchise tax, sales and use tax, etc.)
• Your prior Professional Employer Organization (PEO)'s TWC UI Tax Account Number.
  
  • When an employer leaves a PEO and resumes employment of its own employees, the employer must:
    
    • Reopen their formerly closed TWC account number if they were with the PEO for less than 3 years.
    • Register for a new TWC UI Tax Account Number If they were with the PEO longer than 3 or if they never previously registered as an employer.
• "Errored" or duplicate UI Tax Account Number the TWC created in error.
  
  • A notification letter would have been mailed to the employer’s address of record when an account is "errored". The letter includes:
    
    • The correct, active UI Tax Account Number to replace the errored one with
    • The correct, active EID, to replace with the duplicate EID.
  • An errored account cannot be made active again.
• TWC non-liable UI Tax Account Number—this is issued when you set up an account before meeting the liability limit.
  
  • When this happens, a notification letter is mailed to the employer’s address of record informing them to register for a new UI Tax Account whenever they pay wages that meet the liability requirement.