How to apply for a withholding tax scheme?

How to apply for a withholding tax scheme?

If you are liable for paying withholding tax in the State of Delaware, you are required to open to withholding account. To this, you have two ways to do it. You can either (i) register to the One-Stop Business Licensing and Registration system or (ii) fax or mail the Form Combined Registration Application for State of Delaware Business License or Withholding Agent (CRA) to a designated Delaware Division of Revenue Withholding Tax Unit contact details. Both options are free of charge. Following registering the Division of Revenue for withholding, you are to receive your personalized withholding tax forms within a few weeks.

Please note that any late filing and payment of withholding tax will result in penalties. Any late filing is subject to a penalty of 5% per month, plus interest of 0.5% per month from the original due date until paid. Failure to pay is also subject to an additional penalty of 1% per month, though not to exceed 25%.

Tips

  • As to when is this tax due, it may differ case-by-case. Please check the calendar on the website of the Delaware Division of Revenue or consult with us. 

  • Please note that the State of Delaware does not accept consolidated withholding tax payments for more than one employer. Each employer must file its withholding tax return by using its own Federal Employer Identification Number (EIN). 

  • As for the employees to file for withholding exemptions, the State accepts Form W-4 for an employee to claim personal exemptions. 

  • If you are not sure whether you are required and liable for withholding tax, please do not hesitate to contact us.