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Reporting Employee Terminations for Private Employers and Federal Agencies

Published: December 22, 2014
Information About:
Employers
Topics:
Employer Responsibilities, Income/Wage Withholding
Types:
Guides/Publications/Reports

Topics


When to Report Terminations

When you terminate an employee with a child support Income Withholding for Support (IWO) order/notice, you must report the termination as soon as possible to the child support agency, court, or attorney that issued the IWO.

When a federal employee retires, the federal agency should notify the child support agency and provide the name and address of the federal payroll agency/processing center responsible for paying the retirement benefit.

Report Terminations Online, by Fax, or Mail

Online Reporting:

Electronic Termination (eTerm) on the Employer Services Web App on OCSE's Child Support Portal allows you to notify the state child support agency electronically when an employee terminates.  If you would like to report terminations online and are not currently registered, contact the Employer Services Team at employerservices@acf.hhs.gov to schedule a brief demonstration of eTerm.  After viewing the demonstration, you may register to use the Employer Services Web App.

Fax or Mail Reporting:

Complete the NOTIFICATION OF EMPLOYMENT TERMINATION OR INCOME STATUS section of the IWO and fax or mail it to the child support agency, court, or attorney that issued the IWO.  Some states accept this information over the telephone or on the state’s website.  You should provide the following information:

  • Employee's name
  • Employee's case identifier
  • Last known home address
  • New employer's address (if known)
  • Date of separation

You may alert your employee to make child support payments directly to the child support agency to avoid payment interruptions until the employee’s new employer receives an IWO.

If you also received a National Medical Support Notice (NMSN) for the terminated employee, follow the instructions on the NMSN to notify the child support agency of the termination.

Why Should I Report Terminations?

When you report a termination, the child support agency, court, or attorney understands that you are no longer withholding child support from the employee.  Even if the employee left during the first pay period, you must report the termination if all of the below apply:

  • An employer-employee relationship existed
  • The employee filled out a W-4 form
  • You submitted a new hire report for that employee
  • As the employer, you received a withholding order for that employee

Reactivate Child Support Withholding if You Rehire the Employee

If the employee is laid off temporarily, you should keep the income withholding order. The amount of time that you must keep an IWO on file following a termination varies from state to state. For example, some states require reactivation of an IWO if the employee is rehired within 90 days. The State Income Withholding Requirements matrix contains state-specific information about reactivating an IWO.

If you rehire an employee, you must submit a new hire report if the employee has been separated from your organization for at least 60 consecutive days; however, the timeframe may be shorter depending on state requirements.  Rehire timeframes are found on state websites.