Reporting Employee Terminations for Private Employers and Federal Agencies

Publication Date: September 19, 2022
Current as of:

Topics

When to Report Terminations

When you terminate an employee who has an Income Withholding for Support order/notice (IWO) in place, 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 must also provide the child support agency with the name and address of the federal payroll agency or processing center responsible for paying the retirement benefit.

How to Report Terminations

Online Reporting:

The Electronic Termination (eTerm) application on the Child Support Portal allows you to notify the state child support agency Income Withholding for Support order/notice (IWO) when an employee terminates.

If you’re not currently registered to report terminations online, contact the Employer Services team to schedule a brief demonstration. so you can register for all employer services on the Portal, including eTerm.

Fax or Mail Reporting:

Complete the section, NOTIFICATION OF EMPLOYMENT TERMINATION OR INCOME STATUS, on the IWO and fax or mail it to the child support agency that issued it.  Some states will let you report termination information over the telephone or on their state website. 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 might alert your employee to make payments directly to the child support agency to avoid payment interruptions until a withholding order is in place with their new employer.

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

Why Report Terminations?

When you report a termination, the child support agency understands that you are no longer withholding child support from the employee. Even if that employee left during the first pay period, you must report the termination if all statements 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

How to Reactivate Withholding if You Rehire the Employee

If the employee is laid off temporarily, you should keep the IWO. How long to keep the IWO on file following termination varies from state to state. For example, some states require reactivation of an IWO if you rehire the employee within 90 days. The State Income Withholding Requirements matrix has state-specific information about reactivating an IWO.

You must submit a new hire report if the rehired employee has been separated from your organization for at least 60 consecutive days. This timeframe may be shorter depending on reporting requirements on state websites.

Questions?  Contact the Employer Services team for help.