Unemployment Insurance Handbook for Employers (UCB-201-P)
Section 2 - Tax
PART 4 - Account Reporting
- Filing a Quarterly Report
- Internet Tax and Wage Reporting
- Employer Agent Reporting Format
- How Your Tax Rate is Determined
- Lowering Your Tax Rate
- Filing an Adjustment Report
- Reserve Fund Balance Statement
- FUTA Crossmatch Program
- Payment of Taxes Via Electronic Funds Transfer
- Delinquent Tax Collection
- Closing Your Account
A. Filing a Quarterly Report
Report all wages on a calendar quarter basis. The first $14,000 in wages paid to each employee in calendar year 2013 and beyond is taxed. Wages paid to each employee above the $14,000 limit are reported as wages but excluded from taxation.
If you are subject to the Wisconsin UI Law you must file a quarterly report even if you didn't have payroll in the quarter.
Contribution reports are due by the close of the month following the end of the calendar quarter.
Quarterly Due Dates
The quarterly due dates are:
1st qtr. (Jan., Feb., Mar.) due April 30 2nd qtr. (Apr., May, June) due July 31 3rd qtr. (July, Aug., Sept.) due October 31 4th qtr. (Oct., Nov., Dec.) due January 31
If your contribution report and/or payment is not received by the due date, interest accrues on the unpaid tax at a rate of 0.75% per month starting on 08/01/2012.
If the amount due is for a period prior to 07/31/2012, interest is assessed at 1% per month from the due date of the report through July 2012 and then at 0.75% per month from August 2012 through the current date. The interest rate can change annually.
Please refer to the Interest Assessment Guide for additional information regarding interest rates and calculations.
Employers with a first quarter tax liability of $1,000.00 or more can defer paying up to 60% of the total liability to future quarters. To avoid assessment of interest on the deferred amount, employers must comply with the following requirements.
- The employer must not have any prior quarter outstanding amounts due on April 30. This includes interest, penalties, or other fees.
- The first quarter contribution/wage report and at least 40% of the first quarter tax liability must be received by the April 30 due date.
- The next 30% of the first quarter and all second quarter tax liability must be paid by July 31.
- The next 20% of the first quarter and all third quarter tax liability must be paid by October 31.
- The remaining 10% of the first quarter and all fourth quarter tax liability must be paid by January 31 of the next year.
Interest will not be assessed on the deferred amounts as long as the installment payments and subsequent quarter tax payments are made by the specified due dates. If there are any other amounts due on each of the specified due dates including interest and/or penalties, interest on the deferral amount will be assessed retroactive to April 30. All quarterly contribution/wage reports for quarters subsequent to the first quarter must be filed by the appropriate due dates.
Please note that any deferral amount not paid prior to July 31 will not be included in your account balance for purposes of computing your tax rate for the next calendar year. This could result in being assigned a higher rate.
File Deferral Option Electronically
To take advantage of this deferral option, you must file the election electronically between 2/15 and 4/30 of the year you want to take the deferral. The website address is http://dwd.wisconsin.gov/uitax/ click on "Employer UI Account Information," the First Quarter Deferral Election can be found under "Reports > Reporting Functions > First Quarter Deferral Election."
A new election must be filed each year you wish to defer your first quarter tax liability. Tax and wage reports must be filed electronically for all calendar quarters of the year elected for deferral.
If you have any questions, please call an employer service representative at 608-261-6700.
B. Internet Tax and Wage Reporting
There is a web site available for employers to file their Wisconsin Unemployment Insurance tax and wage report. A payment coupon will be provided to submit with the tax due or payment can be made through ETF. The web site address is http://dwd.wisconsin.gov/uitax/ and click on "File Tax and Wage Reports".
One advantage of entering the wage and tax reports online is the system will calculate the wage base exclusion for you.
Online Filing Requirement
Unless an employer uses an employer agent to prepare their report, employers with 25 or more employees are required to file their tax report using online. This requirement took effect beginning with the report for 3rd quarter 2008. Continued filing on paper will result in a $25 penalty.
C. Employer Agent Reporting
Employer agents who prepare UI reports, must file reports electronically. A $25 penalty may be assessed for each employer report not filed electronically.
D. How Your Tax Rate is Determined
As a newly subject employer, you are assigned a standard fixed rate for the first three calendar years. Newly subject employers in the construction industry pay at the average rate for all other experience-rated construction industry employers.
New employer rates can be found at Unemployment Insurance Tax Rates (http://dwd.wisconsin.gov/ui/employers/taxrates.htm).
New employer tax rates apply to a calendar year and not to the first four or eight calendar quarters during which an employer has payroll. After the first three calendar years, you will be assigned an annually determined "experience" rate based upon the activity in your account.
An account balance is maintained for each individual employer covered under the UI Law. The balance is maintained for tax rating purposes only. The taxes paid are similar to insurance premiums and, therefore, in the event an employer goes out of business, no money in the account is returned to the employer. The balance increases with each tax payment made by the employer and decreases with every unemployment benefit payment made to their laid off workers.
After the initial new employer tax rating period, 3 years, we determine your experience rate as follows:
Your account balance as of June 30, which includes tax payments made through July 31 and benefit payments made through June 30, is one factor used to compute your rate.
Another factor is your fiscal year taxable payroll as reported on your quarterly reports for the fiscal year ending on June 30 of the current year. In simple terms, the quarters would always be the last two quarters of the previous year and the first 2 quarters of the current year.
Your account balance is divided by the fiscal year taxable payroll to determine your "reserve percentage" which in turn determines your tax rate for the next year.
The "reserve percentage" is then applied to the rate schedule. The rate schedule shows a basic rate and a solvency rate total rate.
- The basic rate portion of each tax payment is credited to your account balance.
- The solvency rate portion of each tax payment is credited to a shared risk account called the balancing account.
- Your total rate is the sum of your basic rate and your solvency rate and is the rate shown on your quarterly tax report.
This total rate applies to all quarters for the following calendar year.
You will normally receive your notice of rate in mid-October for the next calendar year. Form UCT-100B is the rate notice.
The rate schedules can change from year to year depending on the overall condition of Wisconsin's Unemployment Reserve Fund.
- The cash balance in the Reserve Fund on June 30 each year determines which of the 4 statutory rate schedules is in effect for the following calendar year.
- The rate schedules is in effect for the following calendar year.
- The rate schedule differs if you are considered a small or a large employer.
If taxable payroll is $500,000.00 or more, the employer would be considered a large employer.
E. Lowering Your Tax Rate
Each year employers have the option of making an extra contribution, which is credited directly to their June 30 account balance and is used for the purpose of lowering their UI rate for the following year by one rate bracket on the rate schedule.
This extra payment is called a "voluntary contribution".
A "voluntary contribution" is a payment over and above your required quarterly contributions and directly affects the account balance used to determine your next year's rate. You may submit a voluntary contribution to obtain a lower rate for the upcoming year only from mid-October through November each year. These payments must be received by November 30.
It is not always advantageous to submit a voluntary payment as this payment might be more than the savings you realize.
To determine the dollar amount needed to lower your rate:
- Take the "reserve percentage" from your rate notice and locate that number on the rate schedule.
- Look at the minimum "reserve percentage" for the next lower tax rate on the schedule. This minimum percentage is what will be required for you to get the next lowest rate.
- Multiply the "reserve percentage" of the lower rate by your fiscal year payroll as shown on the rate notice. This figure represents the account balance needed to qualify for the lower rate.
- Subtract your actual June 30 balance on your rate notice to obtain the amount of voluntary contribution needed. To determine if you are going to realize a savings in taxes payable for next year, multiply the difference in the tax rates by the fiscal year payroll from the rate notice. If this figure is more than the amount of the voluntary contribution needed, you are realizing a savings. If not, paying at the original rate will cost you less. Remember, other circumstances such as an increase in payroll may alter your decision.
- Access your account and use the online Voluntary Contribution Calculator.
- Manually calculate using Form UCT-15393, Voluntary Contribution Worksheet.
We will be glad to help you compute your voluntary contribution and determine if you are likely to realize a savings.
- Call (608) 261-6700 for help.
- See Employer Resources for more information about online access and services.
A voluntary payment once submitted is irrevocably paid. The amount of any voluntary contribution in excess of the amount necessary to lower your rate one bracket will be set up as a credit and will be refunded at your request.
F. Filing an Adjustment Report
How to File an Adjustment Report to Correct any Reporting Errors in your Account
The adjustment should include a quarterly breakdown of the changes to be made.
- Use a Form UCT-7842-E, Contribution Adjustment Report (http://dwd.wisconsin.gov/dwd/forms/ui/uct_7842_e.htm)
- Or write us a letter to correct any reporting errors in your account.
Mail adjustment forms or letters to:
Bureau of Tax & Accounting
Division of Unemployment Insurance
P.O. Box 7942
Madison, WI 53707
If you have over-reported your taxable wages, you may request a refund. You must apply for it within three years after the close of the calendar year in which the payment based on the over-reported amount was made.
If the adjustment is for underreported wages, follow the same procedure in notifying the department. Submit any additional taxes due at the tax rate assigned for the year underpaid.
We will refund your overpaid taxes if you have no outstanding UI liabilities and your credit is greater than your estimated UI taxes for the next two quarters.
Refunds are not made during the tax collection months of January, April, July and October.
G. Reserve Fund Balance Statement
Form UCT-14384, Reserve Fund Balance Statement, is an informational statement showing your current account balance and is sent to you after the end of each period in which there has been some activity in your account. THIS IS NOT A BILL. Depending on your account activity you could receive up to 4 statements in a month. The first or last statement of the month could be for more or less than 7 days to ensure that only 4 statements are sent each month. See Example of UCT-14384.
The form shows your balance at the beginning of the period, tax payments and various amounts credited or debited to your account, voluntary contributions credited, 10% write-offs credited, benefit charges and adjustments debited or credited, and the balance at the end of the period. Your account balance as of June 30 (including any tax payments made during July) each year is used to determine your tax rate for the next calendar year.
Contributions to the UI Reserve Fund are considered a tax and, as such, are not refundable. Contributions are split into two categories in accordance with Chapter 108.18. They are:
- Reserve Fund: An employer's quarterly tax payment posted to their account generated by the "basic" portion of the employer's tax rate.
- Solvency: An employer's quarterly tax payment posted directly to the state solvency (balancing) account generated by the "solvency" portion of the employer's tax rate.
Only the portion of your payment credited to your account balance is shown on this statement. The other parts of your payment may be applied to administrative fees, interest, penalties, or collection costs and do not show up on this statement. Both basic and solvency payments represent taxes paid and are not refundable should you go out of business. The balance in your account, along with all other experience, may be transferable under certain conditions should your business be sold (see Part 6: "Business Transfers and Taking Over a UI Account").
H. FUTA Crossmatch Program
Generally, if you are subject to Wisconsin's UI Law you will also be subject to the Federal Unemployment Tax Act (FUTA). Compliance with the federal law is established by filing U.S. Treasury Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. Government units and statutory nonprofit organizations are exempt from taxation under FUTA.
You must file a Form 940 with the Internal Revenue Service (IRS) by January 31 of the following year. For more information on deadlines, see Employment Tax Due Dates.
Certain employers are required to make advance quarterly deposits.
The FUTA tax is 6.0% with a corresponding offset credit of 5.4% if state UI taxes have been paid timely. The net FUTA tax is 0.6%.
Certifying Wages & Taxes Listed on Form 940
Each year the federal government asks us to certify that the wages and tax payments you listed on Form 940 as having been paid to Wisconsin are correct and were paid timely.
This certification is done by a computer cross match utilizing your Federal Employer Identification Number (FEIN). To properly certify your offset credit, it is important that we have your correct FEIN on our records and that it matches the FEIN shown on your Form 940.
Important: When completing your Form 940, be sure to use your State Unemployment Account number when asked for your "State reporting number".
When discrepancies occur between state and federal reports, the IRS will send you a notice of the discrepancy and a bill for any additional tax that may be due.
Help with WI UI Taxes
If you need to request a certification of your Wisconsin UI taxes paid or have any related questions, contact us at:
- E-mail: firstname.lastname@example.org
- Telephone: (608) 261-6700
- Deaf, hearing or speech-impaired callers may reach us through WI TRS.
Help with Form 940
Contact any IRS office for more information and/or to request Form 940.
I. Payment of Taxes Via Electronic Funds Transfer
You can make your quarterly tax payments via electronic funds transfer (EFT). Various Electronic Payment Options are available (http://dwd.wisconsin.gov/uitax/eft/).
EFT ACH DEBIT Payment Option
EFT ACH debit allows you to pay your Unemployment Insurance (UI) taxes online on the Internet by instructing the State to electronically debit your bank account for a specific payment amount on a day of your choosing. There is no cost to the taxpayer for this type of payment transaction.
In order to make EFT debit payments you must have access online to your Unemployment Insurance (UI) account. If you already are filing your Unemployment Insurance tax report online you already have access to your UI Account and can make EFT debit payments immediately.
How to Get Online Access
Request that we mail you the SUITES Portal Access Letter. The letter will come with instructions and an access code telling you how to set up access online to your UI account.
If you do not have online access to your UI account and want to make EFT debit payments please contact us:
- Unemployment Insurance at (608) 261-6700, Monday through Friday, 8:00 AM - 4:15 PM
- Email us at email@example.com
- Request that we mail you the SUITES Portal Access Letter
Blocking Electronic Funds Transfer (EFT) payments from coming out of your bank account.
If you want to make Unemployment Insurance (UI) EFT debit payments and you have your financial institution place an EFT debit filter block on your bank account to prevent unauthorized EFT debit payments from being deducted from your bank account you need to make sure that your financial institution will allow the UI payment you make to be deducted from your bank account. Your financial institution may ask you for UI's Company Identification number and Company Name.
Company Identification Number & Company Name
The Company Identification number is 1369006449 and the Company Name is Wisconsin UI Tax. Please provide this information to your financial institution if you have debit filter block on your bank account and wish to make UI payments electronically.
EFT ACH Credit Payment Option
The ACH credit method allows you to pay your UI Taxes by instructing your financial institution to debit your account and credit the state's bank account. No authorization form or registration is required by Unemployment Insurance to start making EFT credit payments. Financial institutions may charge you a fee for making ACH credit payments. Please contact your financial institution to see if they offer this payment method.
ACH Credit payments must be initiated at least one business day prior to the tax due date to insure that they are received on time.
If you do not have an amount due for the quarter do not initiate a zero dollar payment.
Important Points to follow when making an ACH Credit Payment
- The bank routing number to send your UI payment to is 075000022.
- The bank account number to send your UI payment to is 182845580
- Make sure to have your financial institution include the 10 DIGIT UI ACCOUNT NUMBER the payment is for in the Taxpayer Identification field of the Addenda Record.
Detailed Instructions for Financial Institutions
A list of detailed instructions financial institutions must follow when making ACH Credit payments can be found at Electronic Payment Options for Employers - EFT ACH Credit Instructions for Financial Institutions (http://dwd.wisconsin.gov/uitax/eft/creditinstruct.htm).
Deaf, hearing or speech impaired callers may reach us through WI TRS.
J. Delinquent Tax Collection
If an employer has been found to owe additional taxes, fees or penalties, a written determination will be issued. This document is a legal document. The appeal period is limited. See Section 3 for appeals information.
If an employer becomes delinquent in paying any amount determined to be due under the unemployment insurance law, and does not respond to collection letters, the Department is authorized to take legal actions including:
- Levy (seizure) of the employer’s bank accounts, property, inventory, accounts receivable, and/or any other asset.
- Issue a civil warrant which becomes a judgment lien against real estate and other property. Like judgments, warrants are public record and may affect credit scores.
- Revoke professional or business licenses issued by Wisconsin.
K. Closing Your Account
If you no longer have employment or if you are closing your business, let us know so we can stop sending you quarterly tax and wage reports.
We will notify you if your account is eligible to be closed, and after three years, we will issue an Initial Determination that closes your account. This applies to tax employers only. Reimbursement employers accounts remain open because of the potential for benefit charges that must be repaid by the reimbursable employer.
If your account is closed, your positive or negative account balance will be transferred to the balancing account. If you go into business again, your payroll will be taxed at the new employer tax rate in effect at that time.
To obtain information on closing your UI account:
- Contact us at e-mail: firstname.lastname@example.org
- Include your Unemployment Account Number and the last date of employment
- Complete Account Change Information Form UCT-6491
- If you have online access, under view/update account, select Update Functions > Close My UI Account
Updated: December 9, 2014
Content Contact: UI Tax