More Savings If You Have Young Children Or Attend College

STEPHEN OHLEMACHER, Associated Press

WASHINGTON — It’s the most significant new tax law in a decade, but what does it mean for you? Big savings for millions of taxpayers, more if you have young children or attend college, a lot more if you’re wealthy.

 The package, signed Friday by President Barack Obama, will save taxpayers, on average, about $3,000 next year.

 But many families will be able to save much more by taking advantage of tax breaks for being married, having children, paying for child care, going to college or investing in securities. There are even tax breaks for paying local sales taxes and using mass transit, and a new Social Security tax cut for nearly every worker who earns a wage.

Most of the tax cuts have been around since early in the decade. The new law will prevent them from expiring Jan. 1. Others are new, such as the decrease in the Social Security payroll tax. Altogether, they provide a thick menu of opportunities for families at every income level.

“The tax code wants to encourage people to invest in their homes, invest in their education, invest in their retirement, and you have to know about all of these in order to take advantage of it,” said Kathy Pickering, executive director of The Tax Institute at H&R Block.

The law extends most of the tax cuts for two years, including lower rates for the rich, the middle class and the working poor, a $1,000-per-child tax credit, tax breaks for college students and lower taxes on capital gains and dividends. A new one-year tax cut will reduce most workers’ Social Security payroll taxes by nearly a third next year, from 6.2 percent to 4.2 percent.

A mishmash of other tax cuts will be extended through next year. They include deductions for student loans and local sales taxes, and a tax break for using mass transit. The alternative minimum tax will be patched, sparing more than 20 million middle-income families from increases averaging $3,900 in 2010 and 2011.

The $858 billion package also includes $57 billion in renewed jobless benefits for the long-term unemployed.

“I am absolutely convinced that this tax cut plan, while not perfect, will help grow our economy and create jobs in the private sector,” Obama has said. “It will help lift up middle-class families, who will no longer need to worry about a New Year’s Day tax hike. … It includes tax cuts to make college more affordable, help parents provide for their children, and help businesses, large and small, expand and hire.”

At the request of The Associated Press, The Tax Institute at H&R Block developed detailed estimates for how the new law will affect families at various income levels next year:

-A single taxpayer making $50,000 a year who rents an apartment and pays $3,500 in college tuition and fees would save $2,280 in income taxes and $1,000 in Social Security taxes – a total of $3,280.

-A married couple with two young children, some modest investments and combined wages of $100,000, would save $6,256 in income taxes and $2,000 in Social Security taxes – a total of more than $8,200.

Income taxes would be lower because of the lower rates, a $1,000 per child tax credit and a $1,200 tax credit for child care expenses. The couple earns $2,000 in dividends but it would be tax-free at their income level. Wealthier investors would pay a top tax rate of 15 percent on dividends. The couple would also be spared from paying the alternative minimum tax, and would pay lower Social Security payroll taxes.

-A married couple with a child in high school and another in college, combined wages of $170,000 and larger investments would save nearly $7,800 in income taxes and $3,400 in Social Security taxes – a combined savings of nearly $11,200.

Income taxes would be lower because of the lower rates and more generous deductions for state and local income taxes, property taxes, mortgage interest and charitable donations.

Assuming the couple earned $4,000 in qualified dividends and $5,000 in capital gains, that income would be taxed at 15 percent, instead of the higher rates that would have taken effect without the new law.

At their income level, the couple wouldn’t qualify for the child tax credit and would get only $125 from the education tax credit. However, they would save more than $3,600 because they would be largely spared from the AMT.

“One thing generally about the higher income taxpayers is that even though they have a lot of opportunities, they also phase out of a lot of benefits that are designed for lower- to middle-income taxpayers,” said Gil Charney, principal tax analyst at The Tax Institute at H&R Block.WASHINGTON — It’s the most significant new tax law in a decade, but what does it mean for you? Big savings for millions of taxpayers, more if you have young children or attend college, a lot more if you’re wealthy.

The package, signed Friday by President Barack Obama, will save taxpayers, on average, about $3,000 next year.

But many families will be able to save much more by taking advantage of tax breaks for being married, having children, paying for child care, going to college or investing in securities. There are even tax breaks for paying local sales taxes and using mass transit, and a new Social Security tax cut for nearly every worker who earns a wage.

Most of the tax cuts have been around since early in the decade. The new law will prevent them from expiring Jan. 1. Others are new, such as the decrease in the Social Security payroll tax. Altogether, they provide a thick menu of opportunities for families at every income level.

“The tax code wants to encourage people to invest in their homes, invest in their education, invest in their retirement, and you have to know about all of these in order to take advantage of it,” said Kathy Pickering, executive director of The Tax Institute at H&R Block.

The law extends most of the tax cuts for two years, including lower rates for the rich, the middle class and the working poor, a $1,000-per-child tax credit, tax breaks for college students and lower taxes on capital gains and dividends. A new one-year tax cut will reduce most workers’ Social Security payroll taxes by nearly a third next year, from 6.2 percent to 4.2 percent.

A mishmash of other tax cuts will be extended through next year. They include deductions for student loans and local sales taxes, and a tax break for using mass transit. The alternative minimum tax will be patched, sparing more than 20 million middle-income families from increases averaging $3,900 in 2010 and 2011.

The $858 billion package also includes $57 billion in renewed jobless benefits for the long-term unemployed.

“I am absolutely convinced that this tax cut plan, while not perfect, will help grow our economy and create jobs in the private sector,” Obama has said. “It will help lift up middle-class families, who will no longer need to worry about a New Year’s Day tax hike. … It includes tax cuts to make college more affordable, help parents provide for their children, and help businesses, large and small, expand and hire.”

At the request of The Associated Press, The Tax Institute at H&R Block developed detailed estimates for how the new law will affect families at various income levels next year:

-A single taxpayer making $50,000 a year who rents an apartment and pays $3,500 in college tuition and fees would save $2,280 in income taxes and $1,000 in Social Security taxes – a total of $3,280.

-A married couple with two young children, some modest investments and combined wages of $100,000, would save $6,256 in income taxes and $2,000 in Social Security taxes – a total of more than $8,200.

Income taxes would be lower because of the lower rates, a $1,000 per child tax credit and a $1,200 tax credit for child care expenses. The couple earns $2,000 in dividends but it would be tax-free at their income level. Wealthier investors would pay a top tax rate of 15 percent on dividends. The couple would also be spared from paying the alternative minimum tax, and would pay lower Social Security payroll taxes.

-A married couple with a child in high school and another in college, combined wages of $170,000 and larger investments would save nearly $7,800 in income taxes and $3,400 in Social Security taxes – a combined savings of nearly $11,200.

Income taxes would be lower because of the lower rates and more generous deductions for state and local income taxes, property taxes, mortgage interest and charitable donations.

Assuming the couple earned $4,000 in qualified dividends and $5,000 in capital gains, that income would be taxed at 15 percent, instead of the higher rates that would have taken effect without the new law.

At their income level, the couple wouldn’t qualify for the child tax credit and would get only $125 from the education tax credit. However, they would save more than $3,600 because they would be largely spared from the AMT.

“One thing generally about the higher income taxpayers is that even though they have a lot of opportunities, they also phase out of a lot of benefits that are designed for lower- to middle-income taxpayers,” said Gil Charney, principal tax analyst at The Tax Institute at H&R Block.

The state of New Jersey will soon be issuing the 2010/2011 unemployment tax rate notices.

 For those clients with over 100 employees, it is important to be aware how these new rates will affect your company.

 Once you receive your notice, please fax a copy along with a copy of last years notice to HBS @ 856-857-1233.

 Upon receipt, we will review the information with you and validate the numbers are correct or discuss what options may be available with you.

 There are times that a voluntary contribution may appear to be beneficial. This contribution will actually lower your rate.  We will advise you as to the amount of contribution, as well as the anticipated tax savings.

 Please take note, due to the high level of Unemployment Benefits paid out, the State of New Jersey requires a higher tax rating table to be imposed this year. As a result, Tax Schedule “C” is in effect this year, compared to Tax Schedule “B” which was in effect last year. Thus, most employers will receive a higher tax rating assignment this year than they did last year.

To illustrate how this works, if you compare the two tables (see below portion of the tables) you will see that a Reserve Ratio between 0.00% – 00.99% last year produced a 3.0% tax rate; however, this year the same ratio produces a 3.6% tax rate, creating a 0.6% tax increase

 Tax Rate Tax Rate    Reserve Ratio       2009/2010        2009/2010 Difference

2.00% – 2.99%                    2.8%                          3.3%                            +0.6%

1.00% – 1.99%                     2.9%                          3.4%                           +0.6%

0.00% – 0.99%                   3.0%                          3.6%                          +0.6%

Unemployment Costs are rising and Unemployment Cost Control is more important than ever. The high level of unemployment, along with anticipated legislation, is expected to continue the trend of increasing unemployment compensation costs.

 Employers should continue to be pro-active in contesting unwarranted unemployment claims.

 While this has always been our position, it is important to continue to be diligent in this area.

 If you previously chose not to actively contest unemployment claims you may want to reconsider this approach in the future, based on the tax information outlined above.

 The successful participation in all unemployment hearings, with the assistance of our strategic partner DCR as required, will continue to help maintain the lowest possible tax rate. The impact of a few weeks in Unemployment benefits paid out may now have an even a higher impact to your bottom line.

Take the time now to proactively maximize your position on minimizing the cost of future tax increases.

If you should have any questions concerning the new tax rate, or would like specific recommendations for your organization, please do not hesitate to call.

 Now more than ever, controlling the cost of unemployment is important for your company.

For more information email george@hbsadvantage.com or call 856-857-1230

Visit us on the web www.hutchinsonbusinesssolutions.com

New Jersey is set to release their new unemployment rates in August 2010.

There is one problem!

The state’s unemployment fund is vastly depleted and because of this they will be moving to a new column to calculate the rates. The current rates are being calculated from column B. The state currently has 6 columns to choose from in assigning rates. This year there is talk of moving to the furthest column, which will provide the maximum rates.

 Example:

If your current Employer Reserve ratio is between 4.00% and 5.00% you are currently paying 2.6% of your taxable wages into the unemployment fund over the last year. If your taxable wage base is $1,000,000 that would equate to $26,000. This ratio was chosen from column B.

Under the new proposed rating system if your Employer Reserve ratio is exactly the same, between 4.00% and 5.00%, your new rate could be chosen from column E+10. That would put your rate at 4.10%.

This is a 57% increase.

You will now be paying $41,000 into the unemployment reserve fund over the next year.

 Again, the actual table the state will be using has not been finalized but with the depletion of the current reserve balances, this option is being considered. Should they choose not to use the maximum rate, the next options could be:

Column C…3.1% ($31,000)

Column D..  3.4% ($34,000) 

Column E… 3.7% ($37,000).

Either way, your taxes are going up.

This would be a good time to validate if your current rate is correct!

Unemployment is the 2nd highest government mandated employer tax, yet no one seems to question it.

It is the only tax that you have the opportunity to control what amount you pay each year.

Is your rate correct?

The state of New Jersey has a 10% error rate in the payment of claims. This means that your rate may be incorrect.

The US Department of Labor states that if your company has been involved in a merger or acquisition in the last 3 years, there is a 50% chance that you have been assigned an incorrect rate.

We offer a free analysis of your current rate and we can also provide projections as to what your rate may be in the up coming tax year.

For more information email george@hbsadvantage or call 856-857-1230.

Employer FAQs

What reports am I required to file ?

Each quarter every employer who is subject to the New Jersey Unemployment Compensation Law is required to file a NJ-927, “Employer’s Quarterly Report,” and a WR-30,”Employer Report of Wages Paid.” 

 Must I file a quarterly report if I have no wages to report?

 YES. If you are subject to the New Jersey unemployment compensation law, you must file a NJ-927 and WR-30, indicating no wages paid. 

 What rates should I use when filing my reports ?

NEW EMPLOYERS RATES : Unless you are (or become) subject to the New Jersey unemployment compensation law under the “successor” provisions of the law, in most cases a new employer (one in business for less than three years) is assigned basic starting rates. For the periods shown, the basic rates are as follows:

Period                                         UI                DI         WF       FLI

07/01/09 to 06/30/10    2.6825%    0.5%    0.1175%   0.0%

07/01/08 to 06/30/09    2.6825%   0.5%    0.1175%    0.0% 

 EXISTING EMPLOYER RATES :

 Unemployment and Disability Insurance tax rates are assigned on a fiscal year basis (July 1 – June 30). Every subject employer receives a ” Notice of Employer Rates” (form AC-174.1) and its accompanying explanation at the beginning of each fiscal year. You may obtain your current rates by contacting the Experience Rating Unit.

WORKER RATES: For the periods shown, workers’ contribution rates for unemployment and state plan disability insurance are as follows:

Year                                                                        UI           DI           WF           FLI

2009/2010 (01/01/10 to 06/30/10) 0.3825% 0.5% 0.0425% 0.1200%

2009/2010 (07/01/09 to 12/31/09) 0.3825% 0.5% 0.0425% 0.0900%

2008/2009 (01/01/09 to 06/30/09) 0.3825% 0.5% 0.0425% 0.0900%

What is the taxable wage base ?

For the periods shown, subject employers must pay taxes on wages up to the following amount :

CALENDAR YEAR TAXABLE WAGES

2010 29,700

2009 28,900

2008 27,700

2007 26,600 

What are gross wages ?

Gross wages include every form of remuneration paid to an employee either directly or indirectly, including salary (sick leave pay, vacation pay, holiday pay, back pay awards), commissions, bonuses, and the cash value of all compensation in any medium other than cash as actually paid or otherwise distributed to the employee during the reported quarter. Payments in kind for personal service such as meals, board, or lodging received by a worker from his employing unit in addition to or in lieu of (rather than as deduction from) money are deemed to be remuneration.

What are the eligibility requirements for a reimbursement account ?

Eligibility: An organization must be defined as non-profit as described in section 501(C)(3) of the Internal Revenue Code and be exempt from Income tax under section 501(A) of the Internal Revenue Code to be eligible to become a reimbursement account. A non-profit organization that elects to reimburse the unemployment trust fund for benefits paid to its former employees is required to furnish proof of financial responsibility or file a surety bond with the New Jersey Department of Labor and Workforce Development.

New Employer: A newly subject employer must submit a written notice of intention to apply for the reimbursement option to the Division of Employer Accounts within 120 days of the date status is attained, or no later than 30 days from the date on which such an organization is notified of its subjectivity, whichever is later. Existing Employers: After reporting a non-profit contributory employer for a minimum of two calendar years, you may choose the reimbursement option of benefit payment by filing a written notice to that effect with the Division of Employer Accounts no later than February 1 of any calendar year. For additional information, please contact the Division of Employer Accounts : Employer Status Unit.

How do I amend a previously filed report ?

To amend your NJ-927 and/or WR-30 reports, you MUST amend them on-line only at the Division of Revenue web site. You may no longer submit an amended return on paper. Directions for completing the on-line amended return may be found at the Division of Revenue web site. http://www.state.nj.us/treasury/revenue/amdreturns.htm

How do I request a refund ?

EMPLOYER An employer who has overpaid tax contributions may request a refund by contacting the Division of Employer Accounts: Employer Refund unit, or by submitting a UC-9 “Employer’s Claim for Credit or Refund by Reason of Erroneous Payment of Contributions” with the division. If gross wages originally reported on the WR-30 for any individual employee were reported incorrectly, an amended WR-30 must be filed online and a UC-9 must be completed and mailed to the division. An employer is entitled to a refund of excess contributions paid, if requested no more than two years after the calendar year in which the erroneous payment was made. EMPLOYEE An employee who resides in New Jersey and overpaid worker contributions as result of working from more than one employer may take credit for the overpayment on the NJ1040. Non-residents may obtain a refund by contacting the Division of Employer Accounts: Worker Refund unit, or by submitting to the Division a UC-9A with copies of any W-2s showing excess deductions. An employee is entitled to a refund of excess contributions if the request is made within two years after the calendar year in which wages are paid.

What records must I maintain for my employees ?

Every individual, group of individuals, firm or organization that employs one or more persons on a permanent, temporary or part-time basis, whether or not they are subject to unemployment compensation law, must maintain and retain for the current year and four preceding calendar years the following records : Individual worker records: Full name, address, and Social Security number; The date hired, rehired, and returned to work after temporary layoff; The date separated from employment and the reason for such separation; The number of base weeks and wages; Total remuneration paid, showing separately: cash, commissions, and bonuses; reasonable cash value of remuneration paid by the employer in any medium other than money, including room and board, meals, tips; special payments such as bonuses, gifts, etc., which have been paid during the pay period but which relate to employment in prior period shall be shown separately under the heading: cash payments cash value of other remuneration the nature of such payments the period during which the services were performed for which special payments were paid Payroll Records: The full name of each employee and the days of the calendar week in which work was performed for remuneration; The beginning and ending dates of each pay period; The total amount of wages paid to each employee in each pay period; The total remuneration paid to all such individuals combined, separately by money and other remuneration in each pay period and in all pay periods within each quarter.

Am I required to register a family-operated business ?

A family-run business is exempt from the New Jersey unemployment compensation law if: The business is a sole proprietorship, and The only employees are parents in the employ of a son or daughter, or The only employees are children under the age of 18 in the employ of a parent.

How are unemployment benefits charged to my account ?

When unemployment benefits are paid to a claimant, a charge equal to the benefit amount is made to the account of the employer for whom the individual worked. If the claimant worked for more than one employer during the period on which the benefits are based, each base year employer is charged proportionally for each benefit payment, which is determined by the amount of wages that the employer paid the claimant during the base year and total wages received during that period. That is, under proportional charging, all base year chargeable employers share in the cost of each week of benefit payments. The employer is notified of these charges quarterly on the form B-187Q, “Unemployment Benefits Charged to Experience Rating Account.” employers should check these listings carefully against their payroll records to help prevent incorrect charges and improper benefit payments.

How can I reduce my UI/DI rates ?

You may reduce your UI/DI rates: Avoid fines by submitting all reports accurately and on time. Avoid unnecessary charges by reviewing determinations, appeals, decisions, and charge notices for accuracy. By making timely appeals on determinations, appeal decisions and charge notices that you believe to be erroneous. By attending appeal hearings and reporting fraud. By making voluntary contributions. By using the “exceptions address file” to have forms sent to the proper company location.

How do I grant power of attorney ?

You may grant power of attorney to another individual to represent you before the Division of Employer Accounts by submitting a power of attorney document containing: The corporate seal, unless the employer is an individual or a partnership; The signature of the employer(s) or duly authorized corporate officer; Specific mention of Employment Security as the entity before whom representation will be made on behalf of the employer; The signature of a notary public and the expiration date of commission; The signature of the representative and a statement acknowledging power of attorney authorization.

What is a private disability plan ?

A private disability plan is one in which temporary disability benefits are provided for workers by an agency other than the state. You may establish a private plan for the payment of disability benefits in place of the benefits payable under the state plan. Such a private plan may be a contract of insurance issued by an authorized carrier, by an employer as a self-insurer, or by an agreement between a union and an employer. The Bureau of Private Plans must approve all private plans. You must submit for review an application and complete description of the plan. To apply for a private plan, contact: Division of Temporary Disability Insurance Bureau of Private Plan Approval and Termination Section PO Box 957 Trenton, NJ 08625-0957 Telephone: (609)292-2720 Fax: (609)292-2537

How do I determine whether an individual who performs services for me is an independent contractor ?

 An employer is not liable for unemployment or temporary disability contributions for services performed by an independent contractor. To be considered as an independent contractor, an individual must retain all control or direction over the services rendered. In addition, the independent contractor must be customarily engaged in the established trade or business which should have been existence prior to its association with the employer, and which trade or business should be independent to the point that it could survive if the relationship between the employer and the independent contractor were terminated. An independent contractor advertises his or her services, is in a position to realize a profit or suffer a loss, and has an investment in its business.

Overpayment of employment taxes happens more than you think.

Prepare for a merger, acquisition, divestiture or restructuring
As part of planning for anyone of these major events, one needs to consider the employment tax consequences of these events.  Your range of rights and options to optimize your employment tax account are influenced by the timing of the event and what steps you take in advance to secure your rights.  Steps you make in corporate structure can have a tremendous effect on your employment taxation.  Analyze your options up front and execute the appropriate strategy to optimize your taxes.

For the above strategies, your state (NY 888-899-8810 / NJ 609-292-1730 / CT 860-566-1018) and/or federal agencies are available to help you better understand how these issues may influence your specific accounts.  As there are many areas of nuance in this area, please make sure to consult with a field specialist to make sure you are in compliance and correctly positioning yourself to generate cash refunds and lower tax rates.  Through strategic employment tax practices, you can improve your “asset” value of your unemployment reserves and strengthen your “cash flow” from refunds and reduced taxation.

Our Perspective:

Hutchinson Business Solutions is an independent broker that specializes in corporate financial solutions. We have worked with many corporations who recently went thru a merger or acquisition.

Did you know that the US Department of Labors states that companies who fit this profile have a 50% chance that they have been assigned the incorrect rate and that they may be overpaying unemployment taxes?

To learn more email george@hbsadvantage.com or call 856-857-1230

By Lisa Fleisher/Statehouse Bureau

February 24, 2010, 9:38PM

TRENTON — Gov. Chris Christie Thursday will propose major changes to the state’s broken unemployment system, reducing benefits for workers and limiting tax increases on employers, legislative and administration officials said tonight.

Christie’s proposal, which will need to be passed by the Democrat-controlled Legislature, is aimed at softening a tax hike business groups said was their top concern for the year, while also targeting benefits given to future unemployed workers.

Democratic lawmakers have said they would fight to protect benefits for workers, but they also said increasing taxes employers pay for workers could stunt job growth.

“I am going to have to support some element of what is being put on the table,” said Assembly Speaker Sheila Y. Oliver (D-Essex), who was briefed on the proposal Thursday. But “to have unemployed people, quote, ‘share the burden’ of dealing with our fiscal (problem), it’s like adding insult to injury to devastated New Jerseyans.”

The proposal, which would take effect in July, would reduce tax increases on businesses, institute a one-week waiting period for people receiving benefits, reduce the maximum weekly benefits check by $50 and increase benefit restrictions on people fired for “misconduct,” said Oliver and two senior Christie administration officials, who requested anonymity because they were not authorized to speak before the announcement.

With the state’s jobless rate hovering around 10 percent, the proposal would not affect employees already on unemployment.

Below is a good outline on how unemployment effects the employer.

Unemployment insurance (UI) claims all have some effect on an employer, but the effect will be small or major, depending upon the circumstances. The main determinants of how a UI claim will affect a given employer are:

  1. the type of employing unit involved;
  2. the type of worker involved;
  3. the date of the initial claim;
  4. the length of time worked by the claimant prior to the initial claim;
  5. the amount of wages reported for the claimant prior to the initial claim;
  6. whether the employer was the only base period employer;
  7. the amount of benefits paid to the claimant;
  8. the nature of the work separation; and
  9. the number of employees the company has.

 

  1. Types of Employing Units    

    While anyone who pays a worker for personal services is an “employing unit” under the law, not all employers are liable for unemployment taxes. By the same token, not all money paid for personal services falls under the definition of “wages” that are subject to reporting and UI taxation. For example, a person or company that engages an outside attorney to provide occasional legal advice is an “employing unit”, but does not thereby become an “employer” liable to report the attorney’s fees to TWC as wages and pay UI tax on such earnings. Likewise, some organizations are exempted from wage reporting and tax liability by virtue of special exemptions in the law. Organizations that are liable for wage reporting and UI payments either pay quarterly UI taxes (determined by applying the employer’s tax rate to the first $9,000 of each employee’s earnings in a calendar year) or have reimbursing status (they reimburse TWC dollar for dollar for any UI benefits paid out that are based on wages reported for the claimant). The following list indicates the most common categories of employing units and whether they are or are not liable for wage reporting and UI tax or reimbursement liability:

    1. Customers/clients of independent contractors: such employing units do not report the money they pay to the independent contractors, owe no UI tax on such payments, and have no financial involvement in any UI claims that might be filed by such workers.
    2. Some employing units are too small or pay insufficient wages to be liable under the UI system. For example, a private-sector employing unit that pays less than $1500 in wages in a calendar quarter is exempt (for household/domestic employers, the threshold is $1000 in a calendar quarter). A tax-exempt non-profit organization with fewer than four employees is also exempt from liability. During the period of non-liability, such employing units are treated like the employing units in the first category.
    3. Some employing units have some exempt and some non-exempt employees. For the exempt employees, they are treated just like the employing units in the first category above. For the non-exempt employees, they are treated like any other liable employer – see below. Some organizations, such as churches, have nothing but exempt employees and are non-liable. For a complete list of UI exemptions, see the Texas Labor Code, Chapter 201, Sections 201.042-.078, starting at

    http://www.statutes.legis.state.tx.us/Docs/LA/htm/LA.201.htm#201.042.

  2. Private taxed employers report their employees’ wages, pay quarterly UI tax on such wages (up to the first $9,000 of each employee’s earnings in a calendar year), and have potential financial involvement (chargeback liability) in any UI claims that might be filed by such workers.
  3. Reimbursing employers report their employees’ wages, pay no quarterly UI tax on such wages, and have potential financial involvement (reimbursement liability) in any UI claims that might be filed by such workers.
  4. Taxed group account employers are in a large pool of similar governmental employing units and are treated like private taxed employers, except that any chargebacks are pooled and result in a pooled (shared) UI tax rate.
  5. Non-profit organizations can elect either private taxed employer or reimbursing employer status.

 

  1. Type of Worker Involved    

    As noted above, some workers (independent contractors and employees whose services are exempt from the definition of “employment”) will not involve their employing units financially in a UI claim. All other types of workers have the potential to involve their employing units financially, depending upon whether a particular employing unit reported wages for the claimant during the base period of the claim. Here is a summary of the potential claim liabilities:

      Independent contractors – no wage reporting; no tax, chargeback, or reimbursement liability

    1. UI-exempt employees – no wage reporting; no tax, chargeback, or reimbursement liability
    2. All other workers* – wage reporting; tax liability if the employing unit is not a reimbursing employer; potential chargeback/reimbursement liability depending upon the base period

     

    None of the three categories above affects the right to file an unemployment claim. Any worker who is no longer performing services for pay can file an unemployment claim. Of course, whether the claimant can actually go on from there and draw benefits depends upon whether the claimant meets the monetary eligibility, work separation, and continuing eligibility requirements under the law.

    * The term “all other workers” includes anyone who is not either (a) accurately classified as an independent contractor or (b) an employee whose services are specifically exempted under the UI law. Since there are so many names applied to workers who perform services for pay, it would be impractical to list them all. To illustrate, such a list would include, but not be limited to, probationary employees, new hires, trainees, trial employees, introductory employees, day labor workers, casual employees, temporary employees who are not acquired through a staffing firm, “1099 employees”, “contract labor” workers who are really only misclassified employees, regular employees, full-time employees, part-time employees, PRN staff, “permanent” employees, and seasonal employees. The legal presumption in Texas is that all services are in “employment” and are subject to wage reporting and taxation or reimbursement liability, and the burden of proof is on the employer to show that a particular worker is not in employment.

    However, the term “all other workers” does not include employees of independent contractors, because those workers are employed by the independent contractor, and any UI claims they might file will involve the independent contractor. It also does not include temporary staff assigned by a temporary staffing firm or leased employees assigned by a professional employer organization (PEO, also known as an employee leasing firm), since such employees are employed by the staffing firms that assign them to clients, and any unemployment claims they might file will be the responsibility of those firms. See “Alternatives to Hiring Employees Directly” in Part I of this book.

    Date of the Initial Claim    Top of Page

    The initial claim filing date determines two very important things: the benefit year during which the claimant may file weekly claims, and the base period of the claim. The base period in turn determines the wages that will be used to compute the claimant’s weekly and maximum benefit amounts and which employers will have potential chargeback or reimbursement liability for any benefits paid to the claimant. Below is a chart showing what the base period looks like. Only base period employers have potential financial involvement in a UI claim; non-base period employers have no such liability.

    Base Period
    Quarter 1
    Base Period
    Quarter 2
    Base Period
    Quarter 3
    Base Period
    Quarter 4
    Lag Quarter Quarter In Progress When
    Claim Is Filed
    Included Included Included Included Not Included Not Included

     

    As an example, if an employer hires an employee in February, and lets the employee go after 30 days, and the claimant files an initial claim prior to April 1, then the base period would not include the first quarter of that year (the quarter in progress), nor the fourth quarter of the preceding year (the lag quarter), but would consist of the fourth quarter of the year before the year preceding the current year, and the first three quarters of the year preceding the current year. Since the employer did not report wages during that base period, it will have no financial involvement in the claim. The same would apply if the claimant waited until April, May, or June to file the initial claim – in that case, the base period would omit the second quarter of the current year, the first quarter of the current year, and consist of the four quarters of the preceding year. If the ex-employee files an initial claim after June 30 of the current year, then the employer could be a base period employer, but its chargeback liability would be limited due to having paid only 30 days’ worth of wages (see the next topic).

    Length of Time Worked Prior to the Initial Claim    

    The length of time worked by the claimant prior to the initial claim is important to an employer’s potential financial liability because it helps determine whether the employer falls into the base period of the claim. Generally, if an employee works a short period of time, and files a UI claim fairly soon after losing that short-term job, the employer will not fall into the base period of the claim. The longer the employee works for the employer, the greater the chance is that a subsequent UI claim will involve the employer in the base period. In addition, since an employer’s chargeback liability is directly proportional to the amount of wages it reported during the claimant’s base period, the longer the employee works, the more wages will be reported, and the higher the potential chargeback liability will be. That is why, as a general matter, it is better to separate a clearly unsuitable employee from the company as soon as it becomes clear that the employee will not work out in the long term.

    This factor is closely tied to the concept of a “probationary period”. Although letting someone go during a probationary period will not affect their right to file an unemployment claim by itself, it can help lower the chance that the unemployment claim will involve the employer financially. For more information on probationary periods, see

    “Probationary Periods” in Part II of this book.

    Amount of Wages Reported for the Claimant Prior to the Initial Claim    

    This factor is very closely related to the length of time worked by the claimant prior to the initial claim. The higher the wage amount for the claimant during the base period is, the higher the potential chargeback liability will be.

    Whether the Employer was the Only Base Period Employer    

    Chargeback/reimbursement liability also depends upon whether an employer was the only employer that reported wages for the claimant, or was one of two or more base period employers. An employer’s chargeback liability percentage is directly proportional to the amount of wages it reported for the claimant during the base period, measured against the total wages reported by all employers during the base period. As an example, if employer A paid 100% of the base period wages, it will have 100% of the chargeback/reimbursement liability. If A paid one-third of the wages, it will have one-third of the liability.

    Amount of Benefits Paid to the Claimant    

    This factor, along with an employer’s chargeback percentage as explained above, determines the amount of the actual chargebacks. To determine the amount, TWC multiplies the chargeback percentage by the amount of benefits the claimant ultimately draws. If the claimant draws half of the potential maximum benefit amount, each base period employer’s liability will be half of what it could have been, had the claimant drawn the maximum potential amount.

    Nature of the Work Separation    Top of Page

    The nature of the work separation goes directly to the issue of whether the claimant will be qualified or disqualified for UI benefits. If the work separation was disqualifying, the claimant will not be able to draw UI benefits, which of course will affect the employer’s financial liability for the claim. The first thing TWC does in every UI claim (after determining monetary eligibility) is determine the issue of whether the work separation was voluntary or involuntary, and then whether it was qualifying or disqualifying. A voluntary work separation is one that was initiated by the employee, and an involuntary work separation is one that was initiated by the employer. The burden of proof on the work separation issue depends upon who initiated the work separation. For a detailed look at how TWC analyzes work separations, see “Types of Work Separations” in Part III of this book.

    In a case involving a voluntary work separation, the claimant will try to prove that he or she had good cause connected with the work to quit, and the employer must be prepared to show that continued work was available when the claimant left and that a reasonable employee would not have quit for such a reason. In a case with an involuntary work separation, the employer has the burden of proving two main things: that the discharge resulted from a specific act of misconduct connected with the work that happened close in time to the discharge, and that the claimant either knew or should have known that discharge could occur for such a reason.

    Number of Employees    

    For private taxed employers, the number of employees is important because it determines the size of the employer’s taxable wage base, which is generally the number of employees multiplied by $9,000 (the figure could be lower if some employees do not earn at least that much in the calendar year). A small company will have a small taxable wage base and will experience a proportionally higher impact from a single UI claim than a larger employer with more employees and a higher taxable wage base. For details on how TWC calculates UI tax rates for private taxed employers (the vast majority of employers in Texas), see this Web page:

    http://www.twc.state.tx.us/ui/tax/uitaxrates.html.

    Conclusion

    It should be clear from the above information that there are many factors that determine how a given UI claim will impact a particular employer. While some are more under the control of employers than others, all of them are important to understand. Each claim has the potential to affect an employer’s financial bottom line, and an employer interested in controlling its labor costs will pay attention to every detail.

    As published in Especially for Texas Employers

    Top of PageTop of PageTop of PageTop of PageTop of PageTop of PageTop of Page

    N.J. businesses’ unemployment taxes expected to skyrocket in next year

    By Lisa Fleisher/Statehouse Bureau

    December 30, 2009, 7:32PM

    NJ-UNEMPLOYMENT-TRUST-FUND.jpgJames Bellis is already in a bind.

    As an employer, he pays higher state unemployment taxes than many because he lays off about a dozen workers from his tree maintenance business every winter.

    But next year, he expects to be forced into a deeper hole. Businesses will likely see their unemployment taxes skyrocket in July — and not come down for years — because the fund is broke.

    It’s almost more than Bellis can handle, after seeing a 23 percent drop this year at Tree Tech, his Randolph business.

    “In this economy, every dollar is valuable to managing a business,” he said.

    Gov.-elect Chris Christie’s administration says the unemployment fund is one of the top three financial problems it will face when it takes over on Jan. 19.

    “It’s a very serious problem, and, frankly, it’s as serious of any of the state’s fiscal problems,” said Rich Bagger, Christie’s chief of staff.

    The fund has been strained by a persistent unemployment rate of close to 10 percent, but legislators and national observers say the problems stem from years of pillaging by lawmakers during better times to pay for other projects.

    Because the fund is insolvent, employers will see an automatic tax hike in July, which could translate into businesses paying between $300 and $1,100 more per worker to bring $1 billion more to the state, according to the state Labor Department.

    But even that will not stop the fund’s deficit from increasing fivefold, from $926 million now to $4.5 billion by the end of April 2011. New Jersey is one of 25 states that has borrowed money, interest-free through 2010, from the federal government.

    The situation puts Christie in an unpleasant position, because he has promised no tax increases, because the hike is baked into the unemployment system. It automatically adjusts the tax rate based on the fund’s balance and an employer’s individual history of layoffs.

    The tax hike could work against an economic recovery, causing businesses to hire fewer people, lay off workers or freeze or lower salaries, said Rich Hobbie, executive director of the National Association of State Workforce Agencies.

    “This is a serious increase in costs for employers,” he said. “They have to figure out some way to cover that cost.”

    The tax increase comes at the worst time for businesses, said Art Maurice with the New Jersey Business and Industry Association.

    “Employers are struggling to keep people working that they have on their payrolls now,” he said. “Now to add an across-the-board (unemployment insurance) payroll tax increase on top of that would just be backbreaking.”

    Bagger said the administration must look at all possible options to revive the once-flush fund that now supports more than 175,000 New Jersey residents. The choices include:

    • Pushing legislation to put off or reduce the tax increase. The downside is that increases debt.

    • Reducing benefits to bring them more “in line” with other states. Democrats and worker advocates will fight that change.

    • Finding $1.9 billion for the fund. But from where? Gov. Jon Corzine just cut $839 million in spending to deal with a nearly $1 billion current budget deficit, and the Christie team projects it will be $9.5 billion short for next year’s budget.

    • Teaming with other states to ask the federal government to forgive loans.

    Lawmakers have known this was coming for years. Over the last two years, Corzine pushed off similar tax increases on employers by putting $380 million from the general fund into the unemployment fund.

    The U.S. Department of Labor expects 40 states’ funds to become insolvent by 2011.

    Already, 25 states and the Virgin Islands have borrowed more than $25 billion from the federal government to pay claims, not including extended benefits paid for by the federal government. New Jersey started borrowing in March and now owes more than $926 million. The biggest borrower, California, owes $5.9 billion. Michigan owes $3 billion and New York owes $2 billion. The states’ problems are not unprecedented. In the 1970s and ‘80s, states borrowed regularly from the federal government, but loans at that time were interest-free. This time around, loans are interest-free only though 2010

    State lawmakers around the country are scrambling to deal with the problem.

    New Hampshire, for example, has instituted a one-week waiting period to get benefits and increased the portion of salary taxed. Indiana in April saw thousands of union workers protesting cuts the governor there called “Rolls-Royce” benefits. And 10 states are already making employers pay their system’s highest tax rate, which is what New Jersey is scheduled to do.

    New Jersey legislators disagree about how to solve the problem.

    New Jersey has one of the highest weekly benefits — $584, compared with $405 in New York and $566 in Pennsylvania — and it will automatically increase to $600 for newly laid off workers who receive their first benefit check after the New Year.

    It also is one of a handful of states to allow people to collect checks the first week they are unemployed — instead of waiting a week — and which allows increased benefits for people with children, according to the National Association of State Workforce Agencies. Advocates say this is because it costs so much to live here.

    Still, some legislators say the state can’t afford to categorically leave out options.

    “Everything should be on the table,” said Assemblyman Joseph Malone (R-Burlington), who said the solution to the fund’s problem needed to be worked out with a comprehensive approach to fixing the economy. “The decisions that are going to have to be made are going to anger people.”

    The very suggestion has drawn sharp words from some legislators and advocates.

    “Given the dire situation it’s just mean-spirited,” said state Sen. Barbara Buono (D-Middlesex.) “I think that it would be unconscionable, given the current state of affairs, to decrease benefits. We’re talking about people keeping a roof over their heads and keeping food on the table.”

    An alternative approach, offered by state Sen. Stephen Sweeney (D-Gloucester), is to let the pot just replenish itself.

    “These funds have to build up, and they can’t build up overnight,” he said.

    To be sure, even the more generous features are not what caused the fund to fail. The major source of the problem, critics say, is not even the recession, but rather the $4.7 billion siphoned from the 1990s through 2006 by governors and legislators from both parties to pay for things such as health care for the poor.

    “Unemployment wasn’t so long-term back then,” said Buono, who supported the diversions. “Given the set of alternatives that we had and the cuts that were made, this was not anything that any individual legislators wanted to do but … I think it was something that needed to be done at the time.”

    The unemployment fund kept growing, reaching $3.1 billion by the end of 2001. But even after the balance slipped, plunging to $1.5 billion by the end of 2003, governors and legislators continued to scoop up money before it hit the fund, until Corzine stopped the practice in 2006.

    The state has started to take steps to prevent that from happening again. In November, voters will decide on a constitutional amendment that would prevent the Legislature from diverting money.

    As an employer, Stephen Fauer wouldn’t mind that his environmental services business needs to pay higher taxes to contribute to the state’s bankrupt unemployment fund.

    “If someone puts their hand out and asks, ‘Help me,’ you don’t say, ‘No,’” said Fauer, who owns Environmental Strategies and Applications in Middlesex. “That’s the kind of tax I pay not necessarily with a smile on my face, but not with a heavy heart.”

    What bothers Fauer is the reason he will likely have to pay more.

    “It’s the irresponsibility of our politicians,” he said. “Doing things for expediency rather than things that are correct. You need to behave in a way that’s correct. You need to behave in a way that’s responsible.”


    How it works

    Employers and employees both contribute to the fund. But employees put in a small, fixed amount, whereas employers pay the lion’s share of the tax – and the amount they pay varies.

    The system taxes employers based partially on how much money is in the fund, and partially based on their history of laying off workers.

    But there’s another factor: All employers are affected by how much money is in the unemployment pot. If the balance sinks too low, taxes go up for everybody, which is happening this year.

    Our Perspective:

    Did you Know:

    Unemployment is the 2nd highest US Government Employer Mandated Tax!!

     Why is it, that something that is ranked so high, stirs so little questions?

    Many employers just see it as a cost of doing business.

    Did you know that the unemployment tax is the only tax that you can have a say as to what your rate is?

    How do you know if your current unemployment rate is correct?

    When is the last time you asked that question?

    Did you know that the state of NJ has a 12% error rate in the payment of unemployment claims?

    If they are paying claims incorrectly, that means they are taking too much money out of your account and that your rate may be incorrect!

    Unemployment is a very basic concept:

    Each company basically has a checking account with the state to pay for unemployment claims.

    The state assigns a rate to each company, which determines what percentage of payroll is paid into this checking account to help pay for claims.

    The state then notifies you how much money was taken out of your account to pay for claims that your company may have been liable for.

    Would you give the state your personal check book?

    You may say no!!!!! 

    But you have more $$$ in your unemployment account, then you will ever have in your personal checking account. Yet people still do not ask……

    How much are we paying into unemployment?

    Are you sure we are paying the correct amount?

    Is your currenr nemployment Rate Correct?

    Hutchinson Business Solutions has been dealing with this exact question for over 10 years. We offer a free service to determine if your rate is correct.

    If we find there is an error, we will work with the state to get it corrected and take the necessary steps to file for a refund.

    We will also work with you to help control unemployment cost and your future rate.

    Should you like to know more email george@hbsadvantage.com or you may call 856-85-1230.

    The Unknown Cost

    January 25, 2010

    The main topics being spun in Washington lately have been Health Care and the Bank bailout. What has been lost in the discussion is what must be done to get the economy moving and providing jobs for America. That seems to be the mantel that President Obama is just starting to pick up.

    Every month the experts look to see the latest unemployment data; this proves to be a strong indicator on how and if a recovery is sustaining. Unfortunately, the unemployment report continues to be dismal. Just last week, I saw an article saying that layoffs were higher than expected in December 2009.

    The unemployment rate is still over 10% and this will continue to play a large roll in supporting the economic recovery.

    How does this all effect me?

    Everyone reads about the rising unemployment, but have you ever stopped to think what this means for your company? You may say, “We have not had many layoffs, so it doesn’t really effect us.”

    Don’t be too quick in making this assessment.

    The unemployment is a state fund that all employers pay into. Each employer basically has a checking account with the state to help fund claims. The state assigns a rate to each employer, which determines what percentage of payroll is paid into the fund to pay for claims. The state will then notify each employer as to how much they have taken out of this account in payment of claims.

    Seems simple enough!

    Because of the high rate of unemployment, more dollars are being paid out in claims and there is not enough money in the fund to support these claims. We were lucky last year because part of the bailout went to funding this shortfall.

    But, how does the state address this shortfall in funding?

    If you look at the unemployment rating structure set up in New Jersey, you will see that there are six tables the state can use to fund unemployment. All they have to do is switch what table they use in assigning the rate and without notice you have just received a tax increase.

    As an example: Suppose your company has a positive reserve ratio between 4% to 4.99%

    In 2008 – the state assigned your unemployment rate from column A….. your unemployment  rate would have been 2%.

    In 2009 – the state started assigning your unemployment rate from column B…. your new unemployment rate would have been 2.6%.

    A 30% increase and nothing really changed!

    In 2010 – the state is now looking to fund unemployment from column E+10%, guess what your new rate will be?….. 4.1%

    That is over a 57% increase from last year. The rate would have doubled since 2008!

    Note: This is just not happening in New Jersey, every state is faced with the same dilemma………. How do we fund the higher claim levels?

    What is your current rate?

    When was the last time you validated that your unemployment rate is correct?

    Now more than ever, it would be prudent to ask this question.

    There may be a mistake in the calculation or we may offer options that may help to minimize the potential increases in the long term.

    We offer a free analysis of your existing unemployment rate.

    Would you like to know more?  Email george@hbsadvantage.com or call 856-857-1230

    Unemployment is the 2nd highest employer mandated tax on employers. It is the only tax that you have as an employer, have the opportunity to determine what your rate should be.

    To learn more about how the unemployment tax effects your business, you may visit our website www.hutchinsonbusinesssolutions.com or feel free to contact us.

    Excerpts as reported by DEPARTMENT OF LABOR EMPLOYER

    System controls and processes need to be improved to ensure t h a t e m p l o y e r experience rates are correct. Employer Experience Rates The unemployment, workforce development, healthcare subsidy and disability insurance tax rates are assigned on a fiscal year basis. The Department of Labor (DOL) uses the “reserve ratio method” in determining tax rates for employers. This method requires a record be maintained for each employer identifying the contributions paid, unemployment and disability benefits charged to their account, and taxable wages. The cumulative contributions less cumulative benefits results in the employer’s reserve balance. This reserve balance is then divided by either the three or five year average annual taxable wages, whichever is higher, to arrive at the employer’s reserve ratio. The reserve ratio is used to determine the employer’s contribution rates based on current rate tables.

    A review of 47 of the state’s 250,000 employers’ experience rate calculations for fiscal year 2000 disclosed 12 (26 percent) employers with incorrect calculations, resulting in the wrong assigned rate for four (8 percent) employers. In addition, where problems were noted, we expanded our testing to include a review of rate calculations for fiscal year 2001. Details of our review are as follows:

    Certain employer penalty rates need to be reassessed. Employers are assigned a new employer (basic) rate until they have established three consecutive full or partial years of contribution payment experience. Effective July 1 of the fourth year of subjectivity, rates are assigned based on the employer’s unemployment experience history. Specially assigned or penalty rates apply to employers who previously had sufficient experience to receive an experience rate but subsequently paid no contributions on wages for employment with respect to at least one of the last three calendar years used in the rate calculation.  Our testing identified two employers with basic rates in fiscal year 2000 who were assigned the penalty rate in fiscal year 2001 when the EAS failed to recognize contributions paid for the first quarter of operations. Since both employers had filed and paid contributions on time, they should have received a calculated rate. One employer’s unemployment rate increased from 2.8 percent (basic rate) to 5.4 percent (penalty rate). The employer’s unemployment calculated rate should have been 1.4 percent. Additionally, the employer’s assigned disability rate of 0.5 percent should have been reduced to 0.2 percent.

    When notified, department management investigated this matter further and identified 9600 employers who had basic rates in fiscal year 2000 and penalty rates in fiscal year 2001. They examined 114 of these employers and found that 50 percent were improperly assigned penalty rates and would have to be manually adjusted. Based on this error rate, a potential 4800 employers could be affected.

    System edits do not adequately preclude contributions from being credited to the wrong employer. One employer had contributions for three quarters posted to another employer’s account even though the returns (NJ-927) properly reflected the employer’s identification number, name control and quarter referenced in the encoded data line. This error occurred when DOR registered the employer under their corporation number. This number happened to be consistent with numbers previously used by the DOL for registration numbers. Although DOR subsequently assigned a proper employer identification number, this information was not updated timely in the EAS. When the returns were transmitted to DOL they were matched and were posted to another employer’s account under the old registration number. As a result, both employers were assigned incorrect experience rates.

     These errors could have been detected if: 

     • The DOL had an edit check for reasonableness. The returns incorrectly posted included taxable wages between $3 million and $16 million. The employer whose account they were posted to generally had $20,000 or less in taxable wages.

    • The DOL’s edit check for name control had not been turned off. • The EAS was updated in a timely manner.

    • The DOL had periodically sent out delinquency notices.

    Department management estimates that between 3,000 and 4,000 employers are affected by this type of error and will have to be manually adjusted. The department has changed the EAS programming to eliminate the option to post transactions using either the employer identification number or the old registration number.

    The computer system does not automatically adjust employer accounts following a retroactive rate adjustment.

     Manual adjustments to employer accounts are required following a retroactive rate adjustment. These adjustments are often due to employers making voluntary contributions to increase their reserve ratio and thus reduce their unemployment contribution rate. In one instance, an employer’s taxable wages were overstated by $653,000 and cumulative contributions were overstated by $17,000 resulting in the employer receiving a lower rate. This occurred when the employer’s contributions were not properly adjusted and reallocated after making a voluntary contribution.

     The Employer Accounts System is n o t p r o p e r l y i d e n t i f y i n g contributions to be included in the rate calculations. The EAS currently excludes late transactions from subsequent rate calculations.

    We noted one employer whose fourth quarter of 1998 payment was received late and was properly excluded in the fiscal year 2000 rate calculation. However, this payment should have been included in the fiscal year 2001 rate calculation, but was excluded.

    The fiscal year 2001 calculation should only include account activity attributable to quarters ending December 31, 1999 and prior. Employer contributions overpaid are not included in rate calculations since there are no associated taxable wages to include in the calculation. In one case, an overpayment ($99,000) received prior to December 31, 1999 was reallocated and applied to the second quarter of 2000 and mistakenly included in the employer’s rate determination.

    Pr e d e c e s s o r ’ s accounts are not always included in the successor’s experience rate. When an entire organization, trade or business or substantially all the assets of an employer subject to the law are acquired by another entity, the unemployment tax rate of the acquired entity is transferred to the new employer. Thus the predecessor’s contributions paid, benefits paid and taxable wages paid are included in the successor’s experience rate calculation. The same is basically true for disability unless the employer had a private plan. In one case, the successor’s experience rate calculation for fiscal year 2001 did not include three quarters of contributions and associated taxable wages paid by the predecessor. As a result, the successor was improperly assigned a lower experience rate. Department management was unable to explain how this condition occurred. 

    Recommendation We recommend the department: • continue their efforts to identify and correct employers who have been improperly assigned penalty rates, • implement additional edit checks to ensure that contributions are posted to the proper employer’s account, • develop a program to automatically update employer accounts following retroactive adjustments, • reprogram the EAS to properly identify and include contributions in the proper quarter when making experience rate determinations, and • modify procedures for successor employer accounts to determine why the EAS is not properly capturing and including all predecessor employer(s) account activity.

    Our Perspective:

    We have found many instancesthe state has incorrectly calculated the company’s unemployment rate. Many look at unemployment as the cost of doing business. The state will never contact you if they find you are overpaying taxes. The onus is on the company to provide proof of overpayment.

    Hutchinson Business Solutions has great success validating the assigned rates are incorrect and securing refunds for our clients.

    Is your rate correct?

    We offer a free review of your existing rate.

    Should we find that an error is made, we will contact the state and take the necessary steps to secure a refund.

    Should you like to know more email george@hbsadvantage.com or call 856-857-1230