Washington registration and tax info

How it works

Once a work address has been added in a new state and a new employee has been hired and assigned a work address in that state, you can get registration assistance in Gusto.

Pricing varies by state—get started below and during step 4, you'll review the price, process, and estimated timeline to completion.

Here’s a snapshot of the process:

1. We’ll collect some basic business information from you.
2. Gusto and CorpNet will check the information for accuracy.
3. Your registration application(s) are usually submitted within 3-5 business days.
4. Check the mail for registration info—the state will typically send your tax account numbers and rates to you directly.

CorpNet can walk you through entering any info that they themselves do not enter in Gusto on your behalf.

Get started with state tax registration

1. Sign in to Gusto as an admin.
2. Click the Taxes & compliance section and select Tax setup.
3. Under “[State name] Tax Setup”, click Have us register for you.
   • The state you want to register in will only appear in this location once a work address has been added in a new state and an employee has been assigned a work address in that state.
4. Review the price, process, and estimated timeline to completion.
   • We will not charge you the registration service fee until you send us your order.
5. Click Continue.
6. Answer a couple eligibility questions.
   • Note: Gusto can only register for you if you don't yet have a state account already.
7. Click Save & continue.
8. Enter some company information.
   • We’ll pre-populate the information we already have.
9. Click Save & continue.
10. Tell us about your responsible party–this is the person who is to be held accountable for the company’s good standing and a point of contact within the organization for tax purposes.
    • If you're a nonprofit and run into any issues, check out our FAQ section below for more information.
11. Click Save & continue.
12. Enter some state-specific operational information.
13. Click Save and continue.
14. Review all information thoroughly–if any information is incorrect it may delay the process.
    • Heads up: state and local agencies may charge additional fees and increase the estimated turnaround time shown. CorpNet will let you know if that happens.
15. Check the box to acknowledge all info is accurate and you agree to the Terms of Service.
16. Click Send registration order.

After you send your order, we’ll email you with status updates and add your order total to your next monthly invoice.

Check the status of your order

When your order is complete you’ll receive emails from both Gusto and CorpNet. They’ll detail the next steps which include:

• Reviewing registration details
• Any other state-specific instructions

Before your order is completed, you can use the link in the state registration confirmation email from Gusto to check the status of your order. 

You can also check the status in your Gusto account:

1. Head to the Taxes & compliance section and select Tax setup.
2. Scroll to the state's headline.
3. Click Check the status of your registration.

Cancel your order

If an order is already completed, you'll need to contact CorpNet at [email protected] or 1(888) 449-2638 to cancel. They’re open Monday-Friday from 7am-5pm PT.

If your order is still in progress, you can cancel from your Gusto account:

1. Head to the Taxes & compliance section and select Tax setup.
2. Scroll to the state's headline.
3. Click Check the status of your registration.
4. On the right-side of the page, under "Changed your mind?", click Cancel your order.
5. Let us know why you're canceling.
6. Click Cancel your order.

FAQs

Q: Can I run payroll for my employees before my registration is complete?

A: Not in most cases—you typically need to have a withholding account number and required tax rate(s) in Gusto before you can run payroll. 

If you’re registering in a state where there is no income tax withheld, you can use the state-specific “new employer rate” in this article until you receive your company-assigned rate from the agency.

Q: Can I use Gusto to register in a new state if I don't have a Federal Employer Identification Number (FEIN) yet?

A: No–you must have a FEIN entered in Gusto to order a state tax registration.

Q: Where can I see all my tax information?

A: You can see all tax details in the following locations: 

• Gusto–head to the Taxes & compliance and select Tax setup, and scroll to the applicable state tax setup.
• CorpNet–create a CorpNet account and login at any time to review information.
• State online account–once you’ve gained access to your agency accounts, your tax details will also be available there.

Gusto’s state tax registration service does not contain tax, legal, financial, or HR advice. Since rules and regulations change over time and can vary by location, consult a lawyer, HR expert, or accountant for specific guidance.

Q: My company is a nonprofit and I'm unable to enter 0% in the responsible party section, what do I do?

A: Some states have a 1% minimum for the responsible party ownership percentage. Those states are: ID, KS, MN, OH, SC, DC, DE, MD, NJ, NY, and RI.

Registration orders will need to be placed directly through CorpNet, outside of Gusto, or you'll need to register directly with the agency yourself.

Click the dropdowns below to learn how to register with state and how to give Gusto the third party access (TPA) we'll need to file and pay certain taxes on your behalf.

If you've already registered in the state, you'll need to enter your tax account details in Gusto in order to pay employees. 

You'll need to be registered with one or more of the below agencies in order for Gusto to file and pay taxes on your behalf:

• Washington Department of Revenue - business license
• Washington State Department of Labor and Industries (L&I) - worker’s compensation
• Washington Employment Security Department (ESD) - unemployment tax and Paid Family and Medical Leave

If you still need to register, click the Register a company with the state dropdown above in this article.

Feb 8, 2022 update: Gusto has issued refunds for any WA LTC employee-taxes that were withheld by Gusto.

• We'll return the tax amounts to the company bank account within 10 business days of when you received the related email from Gusto.
• Per state requirements, employers are responsible for refunding their employees before April 30th. To do so:
  1. Review the email(s) from Gusto which include employee names and how much each is owed.
     • If you didn't receive an email, check with your primary admin.
  2. Pay the employees back. You can:
     • Refund them outside of Gusto
     • Add a one-time reimbursement for the amount owed to their next payroll. 

Jan 27, 2022 update: the Governor signed two bills into law—one addresses coverage gaps and the other delays the program by 18 months until Jul 1, 2023.

• As of Jan 28, 2022, Gusto has stopped employee-deductions for the WA-LTC program.
  • There is no longer an opt in/opt out function in Gusto for employees. We won't be starting deductions again until Jul 1, 2023.
• Refunds to employees for the WA-LTC deductions already withheld are due back to employees within 120 days from the initial withholding date.
  • Gusto is actively working on a refund plan—stay tuned in the coming weeks and keep an eye out for any related emails from Gusto.
• For historical payrolls processed outside of Gusto with the WA-LTC deduction, no reporting or payments are due until the program restarts on Jul 1, 2023. Refunds for WA-LTC deductions made prior to Gusto are the responsibility of the client.

Jan 20, 2022 update: House Bill 1732 was passed by the house, but must also be passed by the senate and governor

• The bill to delay until 2023 was passed by the house and now has to pass the senate and go to the governor.
• As soon as there is an official public release from the State of WA regarding the legislature approval of House Bill 1732 we will proceed accordingly.
  • Gusto's team is monitoring the state news release site for both the Governor and WA-Cares.

Dec 23, 2021 updated clarification: employers still must withhold this new tax ("premiums") from employees in 2022

Although the Governor recently announced that he will not enforce collections of this new tax in 2022, the law still says that employers must withhold this new tax from their employees or the company could be responsible for any taxes not paid by their employees.

You can review the latest clarification from Governor Inslee here—employers are still legally obligated to withhold premiums unless the legislature acts to remove the employer’s responsibility to withhold 2022 taxes. We should know more about whether the tax withholding will be postponed for 2022 sometime in January or February 2022.

In order to remain compliant, Gusto will still withhold the tax, as originally intended for 2022 and until further legislation guidance is given. 

More information can be found in the announcement.

THE INFORMATION BELOW INCLUDES THE ORIGINAL WA CARES REQUIREMENTS , THEY HAVE SINCE BEEN UPDATED AND WILL BE REVISED IN LATE JANUARY OR FEBRUARY (READ ABOVE)

Effective Jan 1, 2022, a payroll tax will be included as part of the requirements of the WA long-term care program [H.B. 1323, L. 2021].

The Washington Employment Security Department (ESD) will administer the payroll tax and has issued requirements about the program.

WA Cares requirements

• Resident and non-resident employees whose work is localized in Washington are eligible for the program (and therefore subject to the tax).
• The same employees eligible for Paid Family Medical Leave (PFML) would be eligible for WA Cares. 
• The tax is 100% employee-paid unless the employer decides to pay premiums on behalf of the employee. 
  • For now, the tax is a flat rate of 0.58% and has a no wage base limit (subject to change in the future).
• Unless an exemption is granted, employers must collect the tax via payroll deductions from employees.
• Individual employee exemption can be requested by the employee directly through the ESD. 
• Gusto will file the reports to this agency on behalf of impacted customers.
• No employer registration is required for this new tax.

Employee benefit eligibility 

All employees are eligible to participate in this new state program regardless of employment status (full-time/part-time).

• Heads up: any employee that applies for an exemption and is approved is permanently ineligible to participate.

Benefits are based on the vesting schedule and the number of hours worked—more information on benefit eligibility can be found here. 

How Gusto will support this tax in 2022

Starting with payroll dated on or after Jan 1, 2022, for companies that have already registered with the state of Washington and have a UBI number, we’ll collect the WA Cares premiums from all eligible employees during payroll (much like we already do for PFML).

Although withholding will occur for anyone that has not "opted-out" via an official approval from the ESD (until legislative action), the remittance and reporting to the ESD is on hold by order of the Governor. If the legislature approves a change to the effective date for withholding, and orders employers to refund amounts withheld since 1/1/22, we will proceed accordingly.

We continue to monitor on a daily basis, and to date, there has been no action on the part of the legislature with regard to changing the 1/1/22 effective date for withholding.

Employee exemption requirements

Employers can set the necessary exemptions in Gusto for employees that have provided them with an approved exemption letter from the WA ESD. Some important reminders below:

• Important: Any employee that is approved for an exemption is permanently ineligible to participate in this program.
• Exemptions will only be granted by the ESD between Oct 1, 2021 and Dec 31, 2022. 
• Employee exemptions are typically requested when the employee has access to alternative long-term care—if your company provides long-term care, it doesn’t automatically make your employees exempt from WA Cares.
• Employees get to choose if they want an exemption from WA Cares coverage, or if they want to use WA Cares to supplement the benefits you’re already offering. If they choose to apply for an exemption, they have to do it themselves.

Employee's steps to request an exemption (opt out of the tax)

1. Employees should determine if any existing care policies qualify for an exemption. 
2. Employees can then apply for an exemption for WA Cares—learn more here.
   • WA is processing employees exemption applications in the order received. Encourage your employees to submit their application as soon as possible. Exemptions take effect the quarter after the application is approved.
     • Example: if an employee’s exemption application is approved on Jan. 15, 2022, they must still contribute WA Cares premiums until the new quarter begins on April 1, 2022.
3. Employees must give employers a copy of their approved exemption letter from the Employment Security Department (ESD).

Employer's requirements for adding the exemption in Gusto—you must "opt out" on an employee's behalf

If your employee is approved for an exemption, you need to set up the employee exemption in Gusto on their behalf by:

1. Click the People section and select Team members.
2. Click your employee’s name.
3. Click the Job & pay tab on the page.
4. Scroll to the bottom of the page to the "Washington Taxes" headline, then next to the "Washington Long Term Care Tax", click edit.
5. Click Yes, Opt-out for the employee. 
   • If the employee was already set with an exemption in error and you need to remove it, click No, keep employee enrolled.
6. Click Save.

If you have any trouble, please contact us from the Help section of your account to assist.

Learn more about WA Cares

Check out the agency resources below to learn more:

• WA Cares main website
• FAQs
• Employer information
• Employer toolkit
• Shareable WA Cares presentation deck

At the end of each quarter Gusto will ask you to complete a to-do item on your Home page so we can comply with this requirement. Below are the two questions you will see: 

1. Number of corporate officers: #
2. Officer earnings and stock options: $

Corporate officers and officer earnings

Corporate officers are all officers, including those not listed in Gusto, who are exempt from Washington state unemployment tax and are not already being reported on the quarterly Washington UI Tax and Wage Report.

Officer earnings are the combined wages or earnings for all non-covered corporate officers.

Visit the Washington State Employment Security Department website (ESD) to learn more about how to define a corporate officer and the law on unemployment-insurance coverage for corporate officers. You can also contact the ESD at (855) 829-9243.

Amend filings from the past

If the number of officers or officer earnings have previously been misreported on any quarterly reports, you can amend this portion of the filing by following the directions below.

1. Send an email to [email protected] that includes:
   • The quarterly filing that needs correcting (ex. Q1 2017)
   • The correct number of officers
   • The correct amount of officer earnings and stock options for that quarter.
2. Request that only the corporate officer section of the filing be amended.

You can follow up with your request by contacting Employment Security Department's accounting unit directly at [email protected].

Beginning Jan 1, 2021 through Dec 31, 2040, employers doing business in the city of Seattle may be subject to a payroll expense tax—learn more below. 

Gusto does not support this tax but we’ll continue to monitor the impact to our customers and reassess the decision in the years to come.

Here’s what you need to know for 2022

• This is an employer-­paid tax on the “payroll expense” of the business, meaning the compensation paid to employees in Seattle.  
  • The law specifically states employers cannot withhold the tax from their employees.
  • Learn more about determining compensation totals below.
• The payroll expense tax is levied on businesses, not individual employees—this means the tax is paid by the employer and there is no individual withholding. 
• Only businesses that have $7 million or more of payroll expenses in Seattle in the previous calendar year and have payroll expenses in Seattle paid to employees whose annual compensation is $150,000 or more need to file a payroll expense tax return.
• The first return is due Jan 31, 2022
• Businesses subject to the tax should consolidate all quarterly tax filing information for 2021 and report the combined information on 4th quarter reports. 
• Starting in 2022, the payroll expense tax will be reported and paid on a quarterly basis, rather than the annual basis for the first year.

How do I determine if the company meets the $7 million threshold?

The $7 million exemption threshold is based on the prior year's compensation paid to Seattle employees—learn more in the dropdown below about what should be included in compensation calculations.  

• For example: if you want to know if a company is subject to the tax in 2021, you’ll need to pull and calculate the 2020 compensation paid to Seattle employees to determine if the company has met the $7 million or more in payroll expense threshold. 

If you’re subject to the tax in 2021 (based on your 2020 compensation data), the next step is to use the current year's compensation paid in Seattle to determine the payroll expense tax due for 2021.

• For example: businesses that had $7 million or more in Seattle payroll expenses in 2020 should apply the tax rates in the table below to their 2021 Seattle payroll expense of employees with annual compensation of $150,000 or more.

How do I calculate the businesses total compensation paid to Seattle employees?

For this tax, compensation has the same meaning as it does for the WA Family and Medical Leave program. 

The total payroll expense for employees in Seattle with an annual compensation of $150,000 or more, starting with the first dollar paid, must be included in the amount subject to the payroll expense tax.

Compensation calculations include:

• The standard gross compensation paid to the Seattle employee
• All payments for personal services
• Commissions and bonuses
• The cash value of all earnings paid in any medium other than cash
• Employee contributions to deferred compensation plans (e.g., 401(k), 403(b), or other deferred compensation plans) in which a portion of an employee's salary or wages are set aside to be paid at a later date

Compensation does not include:

• Tips
• Supplemental benefit payments made by an employer to an employee in addition to any paid family or medical leave benefits received by the employee
• Employee exercised stock options (incentive stock options (ISOs) or non-qualified stock options (NQSOs))
• Payments provided to cover a past or future cost incurred by the employee as a result of the employee's expected job functions
• Employer contributions into retirement or disability plans
• Payments to an owner of a pass-through entity that are not earned for services rendered or work performed (i.e., return of capital, investment income, or other passive activities).

You can build a custom report in Gusto using the instructions found in this article to help with finding annual compensation totals.

What rates are used for the Seattle Payroll Expense tax?

The table below is based on the total Seattle payroll expense subject to the tax.

Payroll expense tax due dates—calendar years 2021 and 2022

Calendar year 2021

All quarterly amounts should be consolidated and reported on Q4 2021 reports—due  Jan 31, 2022.

Calendar year 2022

• Apr 30, 2022
• For the quarter ending March 31
• Jul 31, 2022
• For the quarter ending June 30
• Oct 31, 2022
• For the quarter ending Sep 30
• Jan 31, 2023
• For the quarter ending Dec 31

How to file and pay the Seattle Payroll Expense tax 

1. Register for a Seattle business license tax certificate if you haven’t already done so.
   • Anyone doing business in Seattle must have the above certificate—additional information about the Seattle business license tax can be found here. 
2. If you want to register and file manually: Payroll Expense Tax forms will be available to download from the website. 

• Manual forms can be completed and mailed to the address provided on the back of the form. Returns are not deemed filed until both tax filing and payment are received.

If you have questions about this process, contact the agency directly at (877) 693-4435 or by email at [email protected].

Fling returns as a preparer on behalf of another business?

Create a Preparer Account in FileLocal to file returns on behalf of your client—the client will need to grant you permission to file their returns in FileLocal.

2023 updates for the Payroll Expense tax

Check out the Seattle Department of Finance and Administrative Services 2023 Payroll Expense tax updates.

• Employer's Quarterly Tax and Wage Detail Report
• Labor & Industries Employer's Quarterly Report
• Employer's Paid Family & Medical Leave Quarterly Wages and Hour Report
• New Hire Report

• Washington State Employment Security Department (855) 829-9243
• Washington Labor and Industries (L&I) (360) 902-5800
• Washington Paid Family and Medical Leave (833) 717-2273