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New company registration in Alabama

Alabama Department of Revenue

Before your register for a Withholding Tax Account number, you need to be registered as an employer with the Alabama Department of Revenue. You will need to open a tax account with the state.This is a mandatory prerequisite for any employer to obtain a Withholding Tax Account number:

  1. You can go register for this online with the Alabama Department of Revenue.
  2. Click on Obtain a New Tax Account Number. This will be under "Quick Links for businesses."

Once you have a tax account open follow the steps below to get your Withholding Tax Account number:

  1. New employers in Alabama can register for a Withholding Account online with the Alabama Department of Revenue.
  2. Once on this page, read the instructions and then click the link that says Go to MAT.
  3. Sign in to your tax account and request to receive a Withholding Account.

You should receive your account number by mail in several weeks, or call after 3-5 days from registering to receive it sooner. 

Alabama Department of Labor

Once you have paid $1500 in wages during a calendar quarter or had at least one employee on some day in 20 or more different weeks during a calendar year you will become liable for state unemployment tax. Please register online with the Department of Labor to obtain your Alabama Unemployment tax account. 

  • Federal Employer ID Number (FEIN)
  • Date Alabama Operations Began
  • Date of FUTA Liability
  • Quarterly Wages Paid in Alabama
  • Number of Employees in Each Week of the Quarter
  • Name, Title, SSN of Owner/Partner/Corporate Officer

Once you have registered, you will receive your Unemployment Account Number instantly online.

Tax Rate: When inputting your tax rate, please do not include the ESA Rate. New employers need to register with the AL Department of Labor in order to get their new employer rate.Your AL Tax Rate appears in Box 6 of the Tax Rate Notice received from the Alabama Department of Labor. Complete the employer registration process to get their new employer rate, which is generally 2.7% and has a wage base of $8,000. If you're unsure, verify your rate by calling the agency at (334) 954-4741. 

ESA: The Employment Security Enhancement Assessment (ESA) is usually 0.06%, but the rate is 0.0% for new employers. It is included on Box 7 of the Tax Rate Notice received from the Alabama Dept. of Labor. Please be sure to exclude this number from the Tax Rate.

Power of Attorney: Before Gusto can file and pay your Alabama Unemployment Tax, the Alabama Department of Labor (DOL) requires that you submit a notarized Power of Attorney (POA) form. Please notarize the pre-filled POA form that appears in the "Alabama Tax Setup" page.

After notarizing the POA, please mail it to Gusto at the following address:

ATTN: Tax Ops - Audit Team
Gusto
1201 16th Street, Suite 350
Denver, CO 80202

Local Alabama tax agencies

Alabama Revenue Discovery Systems

The RDS is a payee for local taxes in the following cities: Attalla, Beaverton, Fort Deposit, Guin, Haleyville, Hamilton, Macon (county), Midfield, Mosses, Notasulga, Shorter, Southside, Sulligent, Tarrant and Tuskegee.

If you don't have an account number yet, you can register here. You will want to file for an "authority account number" on step 5. For more information you can call RDS at (800) 556-7274.

Gadsden Customer Number

If your business is located in Gadsden, you will be required to obtain a Gadsden Customer Number. If you do not already have one, you can register here. You will download a Business License Application and submit the application by mail to get the number. For additional information you can call the City of Gadsden Revenue Department at (256) 549-4562.

Birmingham Tax Account Number

If your business is located in Birmingham, you will be required to obtain a Birmingham Tax Account Number. If you do not have an account number, you can register here. You'll want to download an Application for Tax Certificate and submit the application by mail. If you have any questions, you can call the City of Birmingham Tax & License Administration at (205) 254-2198.

Birmingham Occupational Tax Schedule

Employees who work in Birmingham AL are subject to the Birmingham Occupational Tax. This schedule is typically monthly unless the employer has a lower annual liability and has request a different schedule. You can confirm your schedule by calling the City of Birmingham Tax & License Administration at (205) 254-2198. 

Auburn Customer Number

If your business is located in Auburn, you are required to obtain a Auburn Tax Account Number. Download a Business Registration Form and submit the application by mail. If you have any questions, you can call the City of Auburn at (334) 501-7226.