Below is a checklist of a few key updates regarding Michigan unemployment taxes:
- Beginning in 2012, the taxable wage base is now $9,500.
- When computing the unemployment tax, employers used to be taxed at 2.7% for the first 2 years. After that, they were taxed at 2.7% plus the experience rating. Beginning in 2012, it will take a new employer 4 years to be considered experienced, rather than 5, and in 2013, it will take a new employer 3 years. Because of this change, the minimum tax rate could potentially be .06%, for some employers, after only 3 years.
- Beginning in 2013, employers with more than 25 employees must file quarterly reports online. In 2014, employers with more than 5 employees but fewer than 26 must file online. In 2015, all employers must file online.
- The penalty for filing a late or erroneous report is increased from $25 to $50 if the return is filed within 30 days after the due date. After that, the penalty is $250 per quarter that the report remains late. If the UIA notifies an employer of an error and it’s corrected within 14 days, no penalty will apply.
- Seasonal designation can be obtained by any employer that employs workers for regularly recurring 26-week periods or less, in any 52-week period. As long as the employer gives the worker reasonable assurance of returning, the workers will not be paid unemployment benefits between seasons. It no longer matters whether the employer’s industry is also seasonal.
- Beginning with the 3rd quarter of THIS YEAR, there will be a single quarterly report filed.
- Beginning in 2013, an employer with 25 or fewer employees that incurred 50% or more of its unemployment tax liability in the first quarter of the previous year, may elect to spread out its first quarter liability in the current year over all four quarters without interest or penalty charges.
- Household employers may elect to pay unemployment taxes once a year, but must still file quarterly reports.
- The 7-week limitation of unemployment benefits for certain family members employed by family owned corporations has been removed.
For more information contact Melissa Miller
Accountant, Payroll Specialist