If you operate a small business out of California that pays more than $100 in wages to employees each calendar quarter, you’ll need to obtain a payroll tax ID number. To obtain the State Employer Identification Number, or SEIN, you’ll need to register with the California Employment Development Department, or EDD. Once obtained, your eight-digit SEIN acts essentially like a Social Security number for your business and gets reported on various California payroll tax filings.
Enrolling as User on California e-Services
Before you can apply for a California SEIN, or payroll tax account number as it’s commonly known, you’ll need to set up an account on the EDD’s e-Services for Business portal. To do this, navigate to the e-Services page and click the Enroll for a username and password link. Once you enter the requested information and create a username and password, EDD will send an email to verify the address you provided. In order to gain access to e-Services and apply for an SEIN, you must verify your email address within 24 hours of enrolling.
Apply for California Payroll Tax Account Number
When you log in to e-Services, select New Customer and hit Submit. To initiate the application, select Register for Employer Payroll Tax Account Number. You then will be asked a number of questions about your business, such as the type of entity it is, the industry it operates in and its federal tax ID number. According to the California EDD, you may receive an SEIN within minutes of completing the registration, but in some cases it can take up to three days.
How to Use the Account Number
As an employer subject to California payroll taxes, you may need to make quarterly payments of your unemployment insurance contribution obligations and employment training taxes. You also will have to remit the income tax and disability insurance contributions withheld from employee wages – the frequency of these deposits follows the same schedule as your federal deposits, which may require more than four payments per year. For each of these deposits, California requires the submission of various tax forms that must always include your business SEIN to ensure all payments are linked to the business’ account.
Federal Employer Identification Number
Employing workers in California means you’ll need to obtain a federal employer identification number, or EIN, as well. A federal EIN serves the same purpose as a California SEIN in that it must be entered on all federal payroll tax form the business is required to submit to the Internal Revenue Service. You can request an EIN on the IRS website, and in most cases have an EIN assigned within minutes of completing the application.
Read More: How to Find a Payer's Federal Identification Number
Michael Marz has worked in the financial sector since 2002, specializing in wealth and estate planning. After spending six years working for a large investment bank and an accounting firm, Marz is now self-employed as a consultant, focusing on complex estate and gift tax compliance and planning.