Section 3: DUTIES OF EMPLOYERS
(a) Registering to withhold Delaware Income Taxes
Delaware Law requires that every employer register with the Delaware Division of Revenue. Registration is accomplished by completing Delaware form Combined Registration Application (CRA).
Delaware Withholding agents will be assigned the same identification number as their Federal Employer Identification Number. If a Withholding Agent does not have a Federal Employer Identification Number, complete Federal Form SS-4 which is available from the nearest Internal Revenue Service office. After you have completed the form you can call the IRS office and receive your Federal Identification Number by phone. After you have received your Federal Identification number, complete the CRA form or contact our Business Master File Section at (302) 577-8778.
(b) Request for Forms
If you are a new business, your initial withholding tax return is located in the Combined Registration Application package. Please use this initial form to remit your first withholding payment. If you do not receive your booklet within four (4) weeks after making your payment, please notify the Business Master File Section. Remember that all new employers are required to file their withholding returns on a monthly basis. If your business is already established and you have our coupon booklet, but need changes to your federal identification number and/or your address, please use the Request for Change coupon contained in the booklet identifying the type of change. Please note we do not issue new booklets for address changes as your remittances are recorded by your federal identification number. However, the respective maintenance is preformed on the Master File for your account in preparation for the next mailing of Division materials. If forms are not available to enable timely filing, you should send a letter with remittance to: BUSINESS MASTER FILE SECTION, DELAWARE DIVISION OF REVENUE, P.O. Box 8750, Wilmington, Delaware 19899-8750, indicating:
- Federal Identification Number
- Name and Address of Company
- Tax Period Ending (Please indicate if the return is a monthly or quarterly return.)
- Name and telephone number of person responsible for filing returns
(c) Hiring New Employees - Form W-4 or W-4A
Obtain from each employee a signed withholding Federal Form W4, W4A or Delaware form SD/W4A or W-4NR at the time of employment. (See Section 15 regarding Withholding Exemptions and Allowances)
(d) Reporting of New Hires
Delaware Law requires that every employer who is required to withhold Delaware income tax from its employees is also required to report the hiring of new employees to the Division of Child Support Services. The report must be made within 20 days of hiring the new employee(s) and must contain the employee's name, address and social security number as well as the employee's date and state of hire. In addition, the name, address and federal employer identification number (FEIN) of the employer is also required. The report may be made using federal form W-4 or an equivalent form of your choice. The report may be in paper and mailed to Delaware State Directory of New Hires, P.O. Box 90370, Atlanta, GA 30364 or faxed to (855) 481-0047. Reports may be made by electronic or magnetic media and a multistate employer may elect to report to one state. For more information concerning multistate or electronic filing, visit DCSS's website at http://newhire.dhss.delaware.gov or call the Division of Child Support Services at (302) 577-7171.
(e) Payment of Compensation to an Employee
Withhold tax from each payment of compensation in accordance with the employee’s exemption certificate and the applicable withholding rate tables reflected in the back of this circular or on the basis of any other formula approved by the Director of the Division of Revenue.
File a return with the Division of Revenue and pay full amount of tax withheld on the required filing dates.
(f) Statement of Compensation Earned - Form W-2
All employers are required to supply each employee a withholding statement on Form W-2, showing total wages and amount of Delaware income tax withheld. This statement must be provided to the employee on or before January 31 of each year reporting the wages paid during the preceding year, or if the end of employment is prior to that date, not later than thirty days after the last payment of wages.
(g) Annual Reconciliation of Withholding Tax Returns
Every employer must file a Reconciliation of Income Tax Withheld for each year. All employers are required to submit an Annual Reconciliation/Transmittal of Income Tax Withheld by filing Form W-3 along with a duplicate copy of Federal Form W-2 indicating the amount of Delaware tax withheld from each employee. Form W-3 is due on or before February 28th of each year reporting withholding amounts for the preceding calendar year.
(h) Reporting of Employees' Annual Wage Data
Please see our W-2 and 1099 reporting FAQs.
(i) Common Paymaster
The Division will not accept the remittance of withholding taxes by a common paymaster on a single return for multiple employers. Each employer who withholds Delaware tax must report the amount withheld under its federal identification number and file an annual reconciliation.
(j) Reporting of 1099 data
Any organization required to report Federal Form 1099 series returns must provide to Delaware information for the following payments:
- All payments to Delaware residents, which are reported on either form 1099MISC or form 1099R; and
- All payments to non-residents of salaries, fees or other compensation for services performed in Delaware, where such payment is reported on form 1099MISC or form 1099R.
Whenever an individual or firm is required to report these forms to the Internal Revenue Service on magnetic media they are also required to report the return information to the Delaware Division of Revenue on magnetic media. The specific 1099 series returns which must be so filed include only the 1099MISC and 1099R forms. All others, including 1099DIV and 1099INT need not be filed for withholding purposes. See Technical Informational Memorandum 97-7 for additional filing requirements for form 1099. The data submitted by the payers will be in the format described in the current IRS Publication 1220 (Rev. 6-98), Catalog Number 61275P and annual updates thereto.