District of Columbia First Hire in 2026: Payroll Accounts and Employer Steps New LLCs Miss

August 21, 2026

Your District of Columbia First Hire is one of those moments where the paperwork pile shows up all at once.

The EIN from the IRS. The DC unemployment account. The workers compensation policy. The new hire reporting. The federal I-9 and W-4 forms. It hits in the same week. This article is the checklist that keeps you from missing one.

## Get Your EIN Before Your First Payroll Run

The IRS Employer Identification Number is the first step. Every employer needs one. If your LLC already has an EIN from formation, skip this. If not, apply at irs.gov — it takes five minutes and is free.

The EIN goes on every federal tax form you file. It goes on your DC unemployment account. It goes on your new hire report. It goes on every Form 941, 940, and W-2 you will file. Without it, none of the other steps can be completed formally.

Have it before you set up payroll software, before you open a payroll bank account, and definitely before you run your first paycheck. Running payroll without an EIN is a problem the IRS notices.

## Set Up Your Federal Payroll Tax Accounts

Federal employment taxes have their own filing schedule. Federal income tax withholding, Social Security, and Medicare are withheld from every paycheck. The employer portion of Social Security and Medicare is an additional expense.

Form 941 is filed every quarter — January, April, July, and October. Form 940 covers federal unemployment tax annually. Both require accurate payroll records. Missing a filing or underpaying a deposit triggers penalties that accumulate fast.

Set up a payroll tracking system before day one. Spreadsheets work for small teams. Payroll software handles the calculations, filings, and deposit reminders. Either way, the recordkeeping requirement is the same: track every paycheck, withholding, and deposit from the first check forward.

## Register With the DC Unemployment Insurance Program

DC requires every employer to register for unemployment insurance within 20 days of the first paycheck. The registration goes through the Mississippi Department of Employment Services at mdes.ms.gov for Mississippi employers, or through the DC Department of Employment Services for DC-based employers.

Wait — DC employers use the DC DOES portal. The address for DC unemployment registration is does.dc.gov. Register within 20 days of your first payroll. Late registration triggers back fees and rate penalties.

The tax rate for new employers starts around 2.5% on the first $9,000 of wages. That rate adjusts over time based on your experience. Paying on time and accurately keeps your rate stable.

## Workers Compensation Insurance Is Required Before the First Day

DC law requires workers compensation coverage before your first employee works a single hour. Not after orientation. Not after the first week. Before the first hour worked.

The DC workers comp requirement applies to almost every employer with employees. Coverage can come through the state fund or a private carrier. The cost varies by industry and payroll size. Get quotes before you set a start date.

Operating without coverage exposes your LLC to direct liability for workplace injuries. If an employee gets hurt and you have no workers comp policy, you pay the medical bills personally. The LLC liability shield does not protect you here.

## The Federal I-9 and W-4 Forms

Every new employee must complete Form I-9 to verify employment eligibility and Form W-4 to set their withholding preferences. Both must be done on or before day one.

Form I-9 requires identity documents and work authorization verification. The list of acceptable documents is on dol.gov. Do not guess — use the official list. Retain completed I-9s for three years after the employee leaves.

Form W-4 tells you how much federal income tax to withhold. The more allowances an employee claims, the less is withheld per paycheck. An incorrect W-4 means incorrect withholding — corrected at year-end with penalties possible.

## New Hire Reporting to DC

Federal and DC law require new hire reporting within 20 days of the first paycheck. The information goes to the National Directory of New Hires, which helps child support enforcement across state lines.

Even if your employee has no child support orders, reporting is mandatory. The DC new hire report goes to the DC DOES portal. Have the employee information ready — full name, address, Social Security number, start date, pay rate — and file on time.

Missing the new hire report triggers federal penalties. The DC report is separate from the federal one. File both.

## Payroll Recordkeeping for DC Employers

Keep payroll records for at least three years. Time sheets, pay rate changes, deductions, and copies of all filed Forms 941 and W-2s. DC DOES and the IRS can audit years later. Good records make audits brief and cheap. Missing records make them expensive.

Store records digitally or physically — either is fine. Just store them securely. Personnel files should be separate from payroll records, and payroll records are sensitive. An HR or payroll software system handles this better than a filing cabinet.

## Related reading

District of Columbia LLC Basics: How to Form and What Every Owner Needs to Know — the EIN and LLC formation steps that come before hiring.

DC Registered Agent: What to Know Before You File in 2026 — your registered agent is how DC and federal agencies reach you for payroll-related notices.

DC Annual Report: Filing Deadlines, Fees, and How to Avoid the Lapse Window — annual compliance that keeps your employer account active.

Completing your District of Columbia First Hire steps correctly keeps your LLC in compliance from paycheck one forward.

## Frequently Asked Questions