4 Easy Steps to Hiring a Domestic Employee in Connecticut

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Are you considering hiring a domestic employee in Connecticut?  If so, take these 4 easy steps:

 

 

1) Apply for Tax Identification Numbers

To hire an employee you will need to obtain a federal tax identification number.  This is done by completing Form SS-4, Application For Employer Identification Number (EIN). This form could be mailed or faxed to the Internal Revenue Service (“IRS”).  The fastest way to obtain the number however is by applying online at IRS.gov.

Additionally a Connecticut Employer would need to obtain a tax identification number from the State of Connecticut Department of Labor. This is done by completing Form UC-1A, Employer Status Report for Unemployment Compensation. This form can also be mailed in or prepared online.

 

2) Have All of the Employees Complete Withholding Forms

All employees must complete Form W-4, Employee’s Withholding Allowance Certificate. This will document the amount of federal income tax to be withheld.  Additionally all Connecticut employees must complete Form CT-4, Employee’s Withholding Certificate. This will document the amount of State of Connecticut income tax to be withheld.

Finally, all employees must complete Form I-9, Employee Eligibility Verification.  The purpose of the form is to identify and employment authorization of each employee.  The employee will need to provide the employer with identification. This could be a passport.  Alternatively it could be a driver’s license and their social security number.

The employer must maintain these documents on file.  Additionally, they must fax or mail in the CT-W4 to the Connecticut Labor Department within 20 days of hiring a new employee. The purpose of this is to assist the CT DOL with the collection of child support from delinquent parents.

 

3) Obtain Workers Compensation Insurance

Workers compensation insurance in Connecticut is statutory.  This means you must have it.  This policy will cover your employees if they get injured on the job. Contact your insurance agent to get a quote and a policy.

 

4) Obtain a Personal Umbrella Policy

This type of policy acts as a backstop to your personal auto and homeowner’s policy.  By having domestic employees you will have potentially more liability.  Everyone should have at least $1 million of coverage. These policies are very affordable.  A $1 million policy might cost a few hundred dollars.  This is very worthwhile.

 

Will you be hiring a domestic employee in Connecticut?

 

We are not rendering insurance advice.  Consult your insurance agent for insurance advice.

About the author:

Tom Scanlon, CPA, CFP®

Tom Scanlon has over twenty-five years experience in public accounting with an extensive background in the areas of financial, tax and estate planning.
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