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 Commission (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) 463-2699.

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—your rate usually needs to be updated each year.
   • 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.
   • If you need to update your account number, contact us from the Help or Priority support section of your account—there may be tax implications if taxes have already been paid or filed to an incorrect account number.
   • 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—learn more about the liability limit at the top of this dropdown.
  
  • 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.

Step one: Give Gusto access to your TWC account

Giving Gusto access lets us automatically keep your Texas tax info up-to-date, so we can make accurate payments and help you avoid tax notices, penalties, and interest.

Important: To give Gusto access, you’ll need to have an account administrator on file with the TWC. 

1. Sign in to your TWC Unemployment Tax Services account.
2. In the “Quick Links” menu, select My Employers.
3. In the “Action” column of the table, select your company’s tax account.
4. Go to the User Admin tab.
5. In the “Quick Links” menu, select Applicant List.
6. In the “Action” column of the table, select Review.
7. On the “Review Applicant” page, you’ll see Gusto’s info—select Approve.
   • User ID: GustoInc
   • Email: [email protected]
8. In the “Tax Services Permissions” section, make sure these checkboxes are selected:
   • Manage Wage Reports
   • Make Payment
   • View Payment
9. Select Submit.
10. Tell us when you’ve completed the above by signing in to your Gusto account and completing the related Home page to-do.

Step two: Authorize Gusto as your payroll representative with the TWC

Authorizing Gusto as your payroll representative lets us work with the agency on your behalf to handle your taxes.

Important: To authorize Gusto, you’ll need to have an account administrator on file with the TWC. 

1. Sign in to your TWC Unemployment Tax Services account.
2. Go to the Account Info tab.
3. In the “Quick Links” menu, select Third Party Authorization.
4. Review and update your account details as needed.
5. Review the "Electronic Record" and "Signature Disclosure agreement", then select Continue. 
6. Use DocuSign to sign Form C-42. Enter the following info in the “Grantee” section:
   • Grantee TWC Account Number: 140202401
   • Grantee Name: Gusto, Inc.
   • Street: 1201 16th St, Suite 350
   • City: Denver
   • State: Colorado
   • Zip: 80202
7. Select Grant Written Authorization, then select Finish.

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) 463-2699.
• 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.

If you need to update your account number, contact us from the Help or Priority support section of your account—there may be tax implications if taxes have already been paid or filed to an incorrect account number.

Step one: Give Gusto access to your TWC account

Giving Gusto access lets us automatically keep your Texas tax info up-to-date, so we can make accurate payments and help you avoid tax notices, penalties, and interest.

Important: To give Gusto access, you’ll need to have an account administrator on file with the TWC. 

1. Sign in to your TWC Unemployment Tax Services account.
2. In the “Quick Links” menu, select My Employers.
3. In the “Action” column of the table, select your company’s tax account.
4. Go to the User Admin tab.
5. In the “Quick Links” menu, select Applicant List.
6. In the “Action” column of the table, select Review.
7. On the “Review Applicant” page, you’ll see Gusto’s info—select Approve.
8. In the “Tax Services Permissions” section, make sure these checkboxes are selected:
   • Manage Wage Reports
   • Make Payment
   • View Payment
9. Select Submit.
10. Tell us when you’ve completed the above by signing in to your Gusto account and completing the related Home page to-do.

Step two: Authorize Gusto as your payroll representative with the TWC

Authorizing Gusto as your payroll representative lets us work with the agency on your behalf to handle your taxes.

Important: To authorize Gusto, you’ll need to have an account administrator on file with the TWC. 

1. Sign in to your TWC Unemployment Tax Services account.
2. Go to the Account Info tab.
3. In the “Quick Links” menu, select Third Party Authorization.
4. Review and update your account details as needed.
5. Review the "Electronic Record" and "Signature Disclosure agreement", then select Continue. 
6. Use DocuSign to sign Form C-42. Enter the following info in the “Grantee” section:
   • Grantee TWC Account Number: 140202401
   • Grantee Name: Gusto, Inc.
   • Street: 1201 16th St, Suite 350
   • City: Denver
   • State: Colorado
   • Zip: 80202
7. Select Grant Written Authorization, then select Finish.

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—learn more about the liability limit at the top of this dropdown.
  
  • 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.