Mississippi payroll setup for your first hire

Mississippi takes state income tax from paychecks. Those amounts sit with the Department of Revenue, not MDES.

Mississippi takes state income tax from paychecks. This is not Texas, Florida, Washington, or Tennessee. Those states do not take state income tax from paychecks. A federal Employee’s Withholding Certificate (Form W-4) is not the Mississippi certificate.

DOR is the Department of Revenue, the income-tax office. The withholding page sends registration, filing, and payment to TAP. The withholding-information page says a corporation, LLC, partnership, or other shop needs a federal Employer Identification Number, called FEIN, before it registers. A sole proprietor can use a Social Security Number or Individual Taxpayer Identification Number. After the file processes, DOR assigns a withholding account number. Hold that number. A federal EIN is not that number. An MDES unemployment Employer Account Number is not that number either. That is not a 15-day California registration clock. Do not copy that clock onto Mississippi.

Employees complete Form 89-350, Mississippi Employee’s Withholding Exemption Certificate. The Form 89-350 stays with the employer. The federal W-4 is not that Mississippi certificate. The withholding forms page also lists Form 89-105, Employer’s Withholding Tax Return, and Form 89-140, the annual information return. Pub. 89-700 is the Department of Revenue withholding-instructions booklet. Use the live DOR tables, not a number from a software page.

Miss. Code § 27-7-305 is the withholding-duty statute. Miss. Code § 27-7-309 puts the return and payment on the fifteenth day after the period. The withholding page restates that clock. If a due date falls on a Saturday, Sunday, or legal holiday, the due date becomes the next business day. W-2s are due to workers and to DOR by January 31. Shops that issue 10 or more W-2s must send those files electronically. A payment is not a return. The withholding account number still sits with DOR. The unemployment number still sits with MDES.

When you owe unemployment: $1,500 in a quarter, or one person in 20 weeks.

MDES is the unemployment-tax office. That tax is often called SUTA, state unemployment tax, or SUI, state unemployment insurance. The liability-requirements page restates the regular-shop test. You become liable if you pay $1,500 or more in wages in a calendar quarter, or at least one worker performs services in some portion of a day in each of twenty different calendar weeks in a calendar year. The worker need not be the same person each week. Miss. Code § 71-5-11 prints the same $1,500-quarter or 20-week pair. Domestic shops use a $1,000-quarter test. Agricultural shops use a $20,000-quarter test, or 10 workers in 20 weeks. A 501(c)(3) nonprofit becomes liable at four workers in 20 weeks. Government shops become liable on any wages. This scorecard is the regular-business path.

This is not California’s $100-in-a-quarter test. There is no 15-day California clock on the MDES liability page. Do not copy that clock onto Mississippi. This is not Arkansas’s ten-day test. Do not copy a ten-day unemployment clock onto Mississippi. This is not Oregon’s $1,000-quarter or 18-week test. Do not copy an 18-week clock onto Mississippi. This is not Indiana’s $1 covered-wage test. Do not copy that $1 test onto Mississippi. This is not Maryland’s one-worker clock from the first day of business. Maryland also tells shops to file a Combined Registration Application within 20 days of opening. Mississippi’s UI-1 Status Report is not that Maryland form. Minnesota tells shops not to register unemployment until covered wages have actually been paid. Louisiana Employment Security Law Rule 317 does the opposite. Louisiana Works tells every shop that pays Louisiana wages to apply within 30 days, even if the shop is not yet liable. The current MDES liability page says register once liability is met. Do not copy Louisiana’s 30-day apply-even-if-not-liable clock onto Mississippi. Do not treat Mississippi like a no-withholding state.

The employer FAQ says MDES assigns a 10-digit Employer Account Number, often called EAN, when you register. Hold the number. Do not substitute a federal EIN for that number. Do not substitute the DOR withholding account number. A withholding number is not required before you file the status report.

Register unemployment on AccessMSTax. File later wage reports with the same MDES office.

AccessMSTax is the MDES unemployment registration, wage-report, and payment portal. The Register with Us page sends a new shop to that portal to register a new business. File Form UI-1, the Status Report, on AccessMSTax, not a software checklist. The Form UI-1 is the paper status report if you cannot file online. Patriot’s registration article calls that portal Online Services for Employers. The official MDES page names AccessMSTax.

After the account exists, file the quarterly contribution and wage report. That report is Form UI-2/3, Employer’s Quarterly Contribution and Wage Report. The quarterly due-dates page says those files are due by the last day of the month after the quarter: April 30, July 31, October 31, and January 31. If that date falls on a weekend, the due date is the next business day. A quarterly wage report is not the new-hire report. Use the due date on the live MDES notice, not a date from a software page.

The tax-rate page prints the start-up rate as 1.00% the first year of liability, 1.10% the second year, and 1.20% the third and later years until the shop is eligible for a modified rate. Those printed rates do not include the Workforce Investment and Training contribution that may apply for the year. The employer FAQ prints a taxable wage base of $14,000. Use the rate on your live MDES notice, not a number from a software page. After the shop builds benefit-risk history, the rate follows experience rating. The FAQ prints a modified range of 0.2% to 5.4%. That printed 1.00% first-year rate is not Arkansas’s 2.0% new-shop rate. It is not Connecticut’s 1.9% new-shop rate. It is not Alabama’s flat 2.70% new-account rate. It is not Louisiana’s average industrial-classification rate.

New hire is a 15-day Department of Human Services report. An MDES wage report does not take it.

The new-hire report is a list of who you just hired. It is not a box on the quarterly unemployment wage report. MDHS is the Mississippi Department of Human Services, the child-support office. Miss. Code § 43-19-46 requires a report to the Directory of New Hires within the Department of Human Services within 15 days of the hiring, rehiring, or return to work. The State Directory of New Hires law page restates that 15-day clock. File at ms-newhire.com. The MDHS employer page restates the 15-day clock and a $25 penalty per missed report, or up to $500 if the shop and the worker agree not to report. The paper form also asks for a SEIN, State Employer Identification Number. That field is not the federal EIN. Hold the MDES Employer Account Number you use on wage files. A quarterly UI-2/3 wage report does not satisfy that clock. This is not Alabama’s seven-day Department of Workforce report. This is not Georgia’s 10-day report. This is not Massachusetts’s 14-day Department of Revenue report. This is not Louisiana’s 20-day Department of Children and Family Services report. Most peer states use a 20-day clock. Mississippi does not.

MDES also runs a voluntary New Hire reporting program. That MDES file helps the unemployment office stop benefit payments to people who have gone back to work. The MDES page says that voluntary file does not take the place of the mandatory State Directory of New Hires report administered by the Department of Human Services. The payroll service can send the MDHS file. The 15-day clock still sits on you.

Workplace injury insurance is due at five regular employees. The Workers’ Compensation Commission does not sell the policy.

This is Alabama’s five-employee path for a regular shop. It is not Louisiana’s, Kentucky’s, Connecticut’s, or Oklahoma’s first-employee path. It is not Arkansas’s, Georgia’s, North Carolina’s, or Virginia’s three-employee wait. It is not Florida’s four-employee wait. It is not South Carolina’s four-employee wait. It is not Wisconsin’s three-employee or $500-quarter path. It is not Oregon’s first-subject-worker path. It is not Texas optional coverage. It is not Washington’s exclusive state fund. It is not Ohio’s Bureau of Workers’ Compensation monopoly. Mississippi calls this workers’ compensation.

The Mississippi Workers’ Compensation Commission facts page says employers with five employees regularly employed must provide workplace injury insurance. A shop with fewer than five may buy a policy, but the facts page says that coverage is not mandatory. Domestic work, farm labor, and listed nonprofit fraternal, charitable, religious, or cultural work sit outside that regular-shop line unless the shop elects in. Miss. Code § 71-3-5 applies the chapter to a private shop that has five or more workers regularly in the same business or establishment. The same section lets a sole proprietor, a partner, or a 15-percent corporate owner elect out in writing. That election drops that person from the five-employee count. This scorecard is the regular-business path.

MWCC is the Mississippi Workers’ Compensation Commission. MWCC does not sell that policy. The facts page says a covered shop buys a licensed insurance policy or obtains Commission approval to self-insure. Ordinary shops buy a licensed private policy or qualify as self-insured. A payroll login is not a policy.

How Gusto and Patriot describe Mississippi

Confirm the live withholding account number on TAP. Confirm the unemployment Employer Account Number and rate on the MDES notice and on AccessMSTax. Confirm workplace injury insurance with a licensed carrier. Confirm the 15-day new-hire file at ms-newhire.com.

Gusto’s Mississippi help article says Middesk (Gusto’s business-verification company) may register state income-tax withholding and state unemployment insurance (SUI). It names the Department of Revenue for withholding and the Department of Employment Security for unemployment tax. The article sends withholding registration to TAP and “Register a New Taxpayer.” It tells shops to enter a withholding account number, a filing frequency, an MDES Employer Account Number, and an unemployment tax rate. It says do not enter the training rate in Gusto. It lists Form 89-105, Form 89-140, Form UI-2, and the new-hire report among Mississippi files. It also asks for a DOR Letter ID so Gusto can hold third-party access, called TPA, on TAP for amended returns. Middesk’s standard order does not open workplace injury insurance. Read Gusto’s Mississippi help article. See Gusto on the directory.

Patriot’s registration article tells new shops to register withholding with the Department of Revenue on the Mississippi Taxpayer Access Point and to register unemployment with the Department of Employment Security on Online Services for Employers. The official MDES page names that unemployment portal AccessMSTax. The same article says Mississippi’s new-employer SUTA rate is 1.0% the first year, 1.10% the second year, and 1.20% the third and later years until a modified rate. Those printed rates match the MDES tax-rate page. Use the rate on your live MDES notice, not a number from a software page. The same article tells employees to complete Form 89-350. It puts the 15-day new-hire report on the Mississippi State Directory of New Hires. The official statute and MDHS page send that report to the Department of Human Services. The article also says workplace injury insurance is due if you have at least five employees, through a private provider or a state-operated fund. The five-employee line matches a regular shop under Miss. Code § 71-3-5. The state-operated-fund line is what the software page says. MWCC does not sell that policy. The ordinary path is a licensed private policy or approved self-insurance. It is not a Washington-style exclusive state fund. Read Patriot’s registration article. See Patriot on the directory.

What still sits on the employer

• Decide that the $1,500-quarter test, or the 20-week test, has been met. Domestic, agricultural, nonprofit, and government paths use other tests.
• Complete TAP so the Department of Revenue can issue the withholding account number.
• Complete Form UI-1 on AccessMSTax so MDES can issue the unemployment Employer Account Number after liability is met.
• Hold the withholding account number. Hold the MDES Employer Account Number. Do not substitute a federal EIN for either number. The new-hire form’s SEIN field, State Employer Identification Number, is not the federal EIN.
• Enter the premium rate from the live MDES notice, not a marketing figure. MDES prints a 1.00% first-year rate and a $14,000 wage base. That printed rate does not include the Workforce Investment and Training contribution. Confirm the live notice.
• File the quarterly unemployment wage report, Form UI-2/3, after the account exists. Those reports are due the last day of the month after the quarter.
• Register withholding on TAP when you have Mississippi wages. Collect Form W-4 and Form 89-350. A federal W-4 is not the Mississippi certificate. File Form 89-105 on the 15th after the period DOR assigns.
• File the 15-day new-hire report with the Department of Human Services at ms-newhire.com. A quarterly UI-2/3 wage report does not satisfy that clock. The voluntary MDES new-hire file does not satisfy that clock either.
• Buy workplace injury insurance when you regularly employ five or more people. The Workers’ Compensation Commission does not sell that policy. Payroll software does not issue that policy.
• Do not copy another state’s clock onto Mississippi. Mississippi does not use California’s $100-quarter test. Mississippi does not use Arkansas’s ten-day unemployment test. Mississippi does not use Oregon’s $1,000-quarter or 18-week unemployment test. Mississippi does not use Indiana’s $1 unemployment test. Mississippi does not use Maryland’s one-worker Combined Registration Application clock. Mississippi does not wait to register unemployment the way Minnesota waits for covered wages. Mississippi does not print Louisiana’s 30-day apply-even-if-not-liable clock. Mississippi does not skip state paycheck withholding the way Texas, Florida, Washington, or Tennessee do. Mississippi does not use Alabama’s seven-day new-hire clock. Mississippi does not use Georgia’s 10-day new-hire clock. Mississippi does not use the 20-day new-hire clock used in Louisiana, Arkansas, Connecticut, and most peer states. Mississippi does not use Louisiana’s, Kentucky’s, or Connecticut’s first-employee workplace-injury path. Mississippi does not use Arkansas’s three-employee workplace-injury wait. Mississippi does not use Florida’s or South Carolina’s four-employee wait. Mississippi does not use Wisconsin’s three-employee or $500-quarter path. Mississippi does not use Washington’s exclusive state fund. Mississippi does not use Ohio’s Bureau of Workers’ Compensation monopoly.

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