New Hire Reporting for Employers

When you hire someone, a short report goes to the state so child support agencies can find parents who owe support. Employers sometimes forget it because it sits outside payroll tax and does not involve the IRS. It is still a legal requirement, and Illinois has expanded who counts. This page explains the rule in plain English.

What the federal rule requires

Federal law requires employers to report basic information about new and rehired employees to a state directory within 20 days of hire. The state sends the information to the National Directory of New Hires. Child support agencies match the directory against their cases to locate a parent, and when there is a match they must issue an income withholding order within two days.

The seven required data elements are:

• Employer: name, address and federal employer identification number (FEIN).
• Employee: full name, current residential address and Social Security number.
• Date of hire: the first date the employee performs services for pay.

States may require additional data elements beyond these seven, so check your state's requirements. Use the same FEIN to report new hires and quarterly wages.

How and where to report

You report to the state where the new employee works. Depending on the state, you can submit through a state website, secured email, first-class mail, fax, an interactive telephone system or other electronic formats. Check which options your state offers.

If you have employees in more than one state, you can choose between two approaches. Either report each hire to the state where the employee works, or register with the U.S. Department of Health and Human Services as a multistate employer and report all new hires to a single state you designate. With the second option you submit electronically, no more than twice a month, 12 to 16 days apart.

Illinois: reporting rules

In Illinois the Department of Healthcare and Family Services (HFS) Division of Child Support Services runs the new hire program, and employers use its Online New Hire Reporting System. HFS says its answers to employer questions include these points:

• All employers must report, including private firms, unions, nonprofit and religious organizations and government agencies.
• Employers must report all new employees who are required to complete a federal Form W-4, including full-time, part-time, seasonal, contractual, temporary and student workers, and employees rehired after a separation of 180 days or more.
• An employee who returns from leave or layoff needs a new report only if the lapse in pay was 180 days or more. If the employee stays on the payroll while away, no report is needed.
• Employees sent by a temporary employment agency are reported by the agency, not by the business where they work.
• As of January 2024, independent contractors and subcontractors must be reported as new hires within 20 days of the contract start. The online system has an employment type option for this.

If you pay a freelancer or consultant in Illinois, add the new hire report to your onboarding checklist alongside the Form W-9. See contractors and Form 1099-NEC and employee vs. independent contractor.

Related child support duties

New hire reports connect to two later duties. If a child support agency sends your business an income withholding order or a National Medical Support Notice, you must follow it. The Illinois agency notes that an employer is considered served if any company address is used, so everyone who handles mail needs to know where such documents should go within your company. Employees' garnished wages and medical coverage requirements are separate from new hire reporting, but they often start with it.

A practical hiring checklist

1. Collect the federal Form W-4 and any state withholding form.
2. Complete Form I-9 within the deadlines. See Form I-9 and E-Verify.
3. Submit the new hire report for the state where the person works.
4. Register for any state or local payroll accounts that the new location requires. See multi-state payroll.
5. Add the employee to payroll, workers' compensation and benefits.

Common mistakes

• Waiting for the first paycheck and then missing the deadline.
• Reporting to the headquarters state instead of the state where the employee works, unless you registered as a multistate employer.
• Leaving out rehired workers or independent contractors where the state requires them.
• Using a different FEIN for new hire reports than for payroll reports.
• Assuming a payroll vendor files the new hire report without confirming.

How we can help

We add new hire reporting to payroll onboarding, set up multistate reporting where it makes sense and keep onboarding records together. See our payroll services and Illinois resources.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.