Employer Taxes (FICA, SUTA, SDI, FUTA)   Federal Insurance Contributions Act (FICA)   State Unemployment Tax Act   State Disability Insurance Tax   Federal Unemployment Tax Act (FUTA)

Employer Depositing and Reporting   Quarterly Reporting to IRS   Quarterly Reporting to States   FUTA Reporting   W-2 Reporting   W-2c Reporting   W-3 Annual Reporting   Quarterly and Annual Reporting by State   New Hire Reporting

Record Keeping   Government Requirements

EIN   Employee Identification Number

FICA provides for a Federal system of old age insurance (OASI) and health insurance (HI). The old age, survivors, and disability insurance is financed by the social security tax. The health insurance is financed by the Medicare tax. Each of these taxes is reported separately.

Social security and Medicare taxes are levied on both employers and employees (unless you or your employees are not subject to these taxes). An employer must withhold and deposit the employee's withheld social security and Medicare taxes and the employer must pay a matching amount.

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The employee tax rate for Medicare is 1.45% (amount withheld). The employer tax rate for Medicare tax is also 1.45% (2.9% total). There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax.

For more information go to the Internal Revenue Service Web Site.

State Unemployment Tax Act

SUTA is part of the joint federal / state unemployment system. It provides for payments of unemployment compensation to workers who have lost their jobs. Most employers pay both a Federal and a state unemployment tax. In all but three states (Alaska, New Jersey and Pennsylvania) this tax is not deducted from the employee's wages. The taxable wage base varies from state to state. See below:

Alabama
State Unemployment Division

Alaska
State Unemployment Division

Arizona
Department of Economic Security

Arkansas
Employment Security Department

California
Employment Development Department

Colorado
Department of Labor and Employment

Connecticut
Department of Labor

Delaware
Department of Labor

District of Columbia
Department of Employment Services

Florida
Workforce Innovation

Georgia
Department of Labor

Hawaii
Department of Labor and Industrial Relations

Idaho
Department of Labor

Illinois
Employment Security

Indiana
Department of Workforce Development

Iowa
Unemployment Insurance Information for Employers

Kansas
Department of Labor

Kentucky
Office of Employment and Training

Louisiana
Department of Labor

Maine
Unemployment Insurance Tax Division

Maryland
Division of Unemployment Insurance

Massachusetts
Division of Unemployment Assistance

Michigan
Unemployment Insurance Agency

Minnesota
Unemployment Insurance

Mississippi
Department of Employment Security

Missouri
Department of Labor and Industrial Relations

Montana
Department of Labor & Industry

Nebraska
Workforce Development

Nevada
Department of Employment, Training & Rehabilitation

New Hampshire
Department of Employment Security

New Jersey
Department of Labor and Workforce Development

New Mexico
Department of Labor

New York
Department of Labor

North Carolina
Employment Security Commission

North Dakota
Department of Labor

Ohio
Bureau of Employment Services

Oklahoma
Employment Security Commission

Oregon
Unemployment Insurance Tax

Pennsylvania
Department of Labor & Industry

Rhode Island
Unemployment Insurance

South Carolina
Unemployment Insurance

South Dakota
Department of Labor

Tennessee
Department of Labor & Workforce Development

Texas
Texas Workforce

Utah
Unemployment Insurance

Vermont
Department of Labor

Virginia
Employment Commission

Washington
Department of Labor and Industries

West Virginia
Bureau of Employment Programs

Wisconsin
Unemployment Insurance

Wyoming
Department of Employment

California, Hawaii, New Jersey, New York, Puerto Rico, and Rhode Island provide temporary disability benefits for employees who are disabled by a non-work related illness or injury through a tax supported state fund. A tax payment similar to the unemployment insurance tax may be required by both the employee and employer. Contact any state in which you have employees to determine your responsibility for paying these taxes.

For more information on Employer Taxes refer to The Payroll Source distributed by the American Payroll Association or Bureau of National Affairs' Web Site.

The Federal Unemployment Tax Act, with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. FUTA tax is an employer tax only, and is not deducted from the employee’s wages.

The tax rate for federal unemployment taxes is 6.2 percent of covered wages, which includes a 0.2 percent surtax. The rate is in effect through 2007. The taxes are assessed on the first $7,000.00 paid to covered employees each year.

The law provides a credit for state unemployment taxes paid. This credit permits employers to deduct timely state contributions from federal unemployment taxes due. With the maximum credit allowed, the net federal rate for unemployment taxes is 0.8 percent through 2007, 0.6 percent in 2008 and thereafter.

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Federal income tax, Social Security, and Medicare taxes are reported on IRS form 941(Employer's Quarterly Federal Tax Return).

For more information go to the Internal Revenue Service Web site.

Quarterly Reporting to States (State Unemployment Taxes)

State Unemployment wages and taxes are reported on state specific forms. See below state Web sites for more information. 

Alabama
Department of Industrial Relations

Alaska
Department of Labor and Workforce Development

Arizona
Industrial Commission

Arkansas
Employment Security Department

California
Employment Development Department

Colorado
Department of Labor and Employment

Connecticut
Department of Labor

Delaware
Department of Labor, Unemployment Insurance Division

District of Columbia
Department of Employment Services

Florida
Workforce Innovation

Georgia
Department of Labor

Hawaii
Department of Labor and Industrial Relations

Idaho
Department of Labor

Illinois
Department of Employment Security

Indiana
Department of Workforce Development

Iowa
Workforce Development

Kansas
Department of Labor

Kentucky
Office of Employment and Training

Louisiana
Department of Labor

Maine
Department of Labor

Maryland
Division of Unemployment Insurance

Massachusetts
Workforce Development

Michigan
Department of Labor and Economic Growth

Minnesota
Unemployment Insurance Program

Mississippi
Department of Employment Security

Missouri
Department of Labor and Industrial Relations

Montana
Unemployment Insurance Division

Nebraska
Department of Revenue

Nevada
Department of Employment, Training & Rehabilitation

New Hampshire
Employment Security

New Jersey
Department of Labor and Workforce Development

New Mexico
Department of Labor

New York
Department of Labor

North Carolina
Employment Security Commission

North Dakota
Job Service North Dakota

Ohio
Department of Job and Family Services

Oklahoma
Employment Security Commission

Oregon
Employment Department

Pennsylvania
Department of Labor and Industry

Puerto Rico
Office of the Governor

Rhode Island
Division of Taxation

South Carolina
Employment Security Commission

South Dakota
Department of Labor

Tennessee
Employment Security Division

Texas
Texas Workforce

Utah
Department of Workforce Services

Vermont
Department of Labor

Virginia
Employment Commission

Washington
Employment Security Department

West Virginia
Bureau of Employment Programs

Wisconsin
Department of Workforce Development

Federal Unemployment wages and taxes are reported on IRS Form 940 (Employer's Annual Federal Unemployment Tax Return).

For more information go to the Internal Revenue Service Web site.

Employers must file Form W-2 with the IRS for each employee from whom: Income, social security, or Medicare taxes have been withheld, or Income tax would have been withheld if the employee had claimed no more than one withholding allowance or had not claimed exemption from withholding on Form W-4, Employee's Withholding Allowance Certificate.

Every employer engaged in a trade or business that pays remuneration for services performed by an employee, including non-cash payments, must furnish a Form W-2 to each employee by January 31. This applies to any employee even if related to the employer.

The official Form W-2 comes with 6 copies. Copy A must be sent to the Social Security Administration with the transmittal Form W-3 by March 1, 1999. Form W-3 is used to transmit the W-2s and contains figures reflecting the total of all the W-2s being sent. The address for mailing Copy A of the W-2s and the W-3 Form is listed in the W-2 and W3 instructions.

Keep Copy D of Form W-2 for your own records. Send Copy 1 to your State Tax Department for requirements and transmittal information. You must give the remaining copies to the employee by February 1, 1999. If an employee stops working for you before the end of the year, you may give him or her (your former employee) the copies anytime prior to February 1, 1999 unless he asks for the Form W-2 prior to the end of the year. If the employee asks for the Form W-2, you must give the copies to the employee within 30 days of the request or final wage payment, whichever is later.

For more information go to the Internal Revenue Service Web site.

If you discover an error (such as incorrect name, SSN, or any wage or tax amount) on an employee's W-2 after sending it to the Social Security Administration, you should submit a Form W-2c. You must also submit a transmittal Form W-3c with the Form W-2c, unless you are changing only the employee's name or Social Security number.

For more information go to the Internal Revenue Service Web site.

Anyone required to file Form W-2 must file Form W-3, Transmittal of Wage and Tax Statements, with Copy A of Forms W-2. Form W-3 is used to transmit the W-2's and contains figures reflecting the total of all W-2's being sent. Make a copy of Form W-3 and keep it with Copy D (for Employer) of Forms W-2 of your records. Be sure to use Form W-3 for the correct year. Form W-3 must be filed with the Social Security Administration.

Form W-3 can be obtained at the Internal Revenue Service Web site.

Quarterly and Annual Reporting by State (State and Local Tax Requirements - varies by State) 

All states, excluding Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming, have state personal income taxes and require employers to withhold a percentage from employees' wages for these purposes. Also, many localities have income taxes for which they require withholding. For more information about state and local withholding filing requirements, please contact the appropriate tax agency. 

Alabama
Department of Revenue

Arizona
Department of Revenue

Arkansas
Department of Finance and Administration

California
Employment Development Department

Colorado
Department of Revenue

Connecticut
Department of Revenue Services

Delaware
Division of Revenue

District of Columbia
Office of Tax and Revenue

Georgia
Department of Revenue
Taxpayer Services Division

Hawaii
Department of Taxation
Taxpayers Services Branch

Idaho
State Tax Commission

Illinois
Department of Revenue

Indiana
Department of Revenue

Iowa
Department of Revenue

Kansas
Department of Revenue

Kentucky
Department of Revenue

Louisiana
Department of Revenue

Maine
Employer Resources

Maryland
Comptroller of Maryland

Massachusetts
Department of Revenue

Michigan
Department of the Treasury

Minnesota
Department of Revenue

Mississippi
State Tax Commission

Missouri
Department of Revenue

Montana
Department of Revenue

Nebraska
Department of Revenue

New Jersey
Division of Taxation

New Mexico
Taxation and Revenue Department

New York
Department of Taxation and Finance

North Carolina
Department of Revenue

North Dakota
State Tax Commission

Ohio
Department of Taxation

Oklahoma
Oklahoma Tax Commission

Oregon
Department of Revenue

Pennsylvania
Department of Revenue

Puerto Rico
Office of the Governor

Rhode Island
Division of Taxation

South Carolina
Department of Revenue

Utah
State Tax Commission

Vermont
Department of Taxes

Virginia
Department of Taxation

West Virginia
State Tax Commission

Wisconsin
Department of Revenue

One of the newest responsibilities facing employers is the reporting of newly hired or rehired employees to state agencies. This reporting is used to aid in the collection of child support and/or to uncover fraud and abuse in unemployment compensation, worker's compensation, and public assistance (welfare) benefit programs.

For more information refer to The Payroll Source distributed by the American Payroll Association.

There are different laws regarding maintaining proper records. Penalties can be assessed for non-compliance. There are many record keeping and record retention requirements of different payroll laws. Listed below are laws you'll want to keep up-to-date on:

1) Federal Wage - Hour Law (FLSA)

2) Internal Revenue Code

3) Federal Anti-Discrimination Laws

4) Civil Rights Act of 1964 (Title VII)

5) Age Discrimination in Employment Act of 1967 (ADEA)

6) Government Contractor Regulations

7) Immigration Reform and Control Act

8) Family and Medical Leave Act

9) State Unemployment Insurance Laws

10) State Wage Hour Laws

11) Unclaimed Wages

12) Direct Deposit Considerations

For more information refer to The Payroll Source distributed by the American Payroll Association.

EIN's are assigned to sole proprietors, corporations, partnerships, estates, trusts, and other entities for tax filing and reporting purposes. The EIN is a nine-digit number the IRS issues. The digits are arranged as follows: 00-0000000. The EIN identifies an employer to the IRS and SSA.

An employer without an EIN may request one on Form SS-4, Application for Employer Identification Number. This form can be obtained by calling the IRS at 1-800-TAX-FORM (1-800-829-3676). Form SS-4 has information on how to apply for an EIN by mail or by telephone.

For more information go to the Internal Revenue Service Web site.

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