This section discusses changes to the liability dates of state unemployment tax accounts.

The first wages date determines in what quarters an Employer is liable for payment of state unemployment tax and in some situations, when an Employer is eligible for a computed tax rate.

A first wages date can be changed on the basis of a Status Report, Employer's Quarterly Report or any type of written correspondence from an Employer or their agent.

A first wages date can be changed on the basis of a telephone call to a responsible party. When the first wages date is changed on the basis of a telephone call, update the FTC screen to document the call.

A first wages date can be corrected by using the STA screen or Form C-10. Form C-10 should be used only in a situation where the transaction cannot be performed on the STA screen due to screen edits.

When a potential change to the first wages date is encountered:

1. Determine if the current first wages date and the new first wages date are in different quarters.
   
   
2. If the current first wages date and the new first wages date are in the same quarter, the first wages date does not need to be changed.
   
   
3. If the current first wages date and the new first wages date are in different quarters, the first wages date should be changed.
   
   
4. If it appears that the first wages date needs to be changed, access the SER and QRM screens and verify the new first wages date against Employer's Quarterly Reports posted.
   
   If Employer's Quarterly Reports are posted prior to the new first wages date, do not change the existing first wages date unless there is reason to believe the Employer's Quarterly Reports are in error.
   
   
5. Do not change the existing first wages date unless there is reason to believe the Employer's Quarterly Reports are in error. For example, if an account was established based on a liable 2/08 report with correct first wages date of 4-1-08. The employer then sends in a status report with first wages date of 8-1-08 without an explanation as to why the liable 2/08 was incorrect we would not change the first wages date.
   
   
6. Use the STA screen to change the first wages date as appropriate. It may also be necessary to change the subject date and first chargeable quarter.
   
   
7. If Employer's Quarterly Reports need to be moved by journal entry, deleted or reinstated, notify ADP & Audit by e-mail and update the FTC screen to document the actions.
   
   
8. If the source of the first wages date change is a Status Report or other documents received by fax or e-mail, place the documents in the Doc Log & Destroy basket for a DLN. Update FTC screen regarding your actions with these documents.

The subject date on an account determines when an Employer became liable for payment of state unemployment tax and often is used to determine extended due dates for Employer's Quarterly Reports. It will also impact the first chargeable quarter.

A subject date can be changed on the basis of a Status Report, Employer's Quarterly Report or any type of written correspondence from an Employer or their agent.

A subject date can be changed on the basis of a telephone call to a responsible party. When a subject date is changed on the basis of a telephone call update the FTC screen to document the call.

A subject date can be corrected by using the STA screen or Form C-10. Form C-10 should be used only in situations where the transaction cannot be performed on the STA screen due to screen edits.

When a potential change to the subject date is encountered:

1. Determine if the new subject date is earlier than the existing subject date.
   
   
2. Do not change the subject date unless the existing subject date is in error or the new subject date depicts earlier liability than the existing subject date. An account should always display the earliest subject date.
   
   
3. If it appears that the subject date needs to be changed, access the SER screen to determine whether or not the new subject date is correct.
   
   Situation 1
   
   Consider an Employer currently subject as of 12-31-08 under Section 201.021 who submits a corrected Status Report showing $1,500 paid as of 9-30-08. After reviewing the SER screen it is determined that the Employer paid only $800 in the third quarter of 2008. The employer is not liable under any other provisions of the act.
   
   Solution 1
   
   The subject date should not be changed to 9-30-08, as the corrected Status Report is incorrect. Do not change the subject date unless there is additional information indicating the Employer misreported wages for the third quarter of 2008. Additional investigation may be required.
   
   Situation 2
   
   Consider an Employer, first paying wages on 7-1-08 and currently subject as of 9-30-08 under Section 201.021, whose account was set up on 11-15-08 based on a status report.
   
   The Employer submits a new Status Report showing $1,500 not paid until 12-31-08.
   
   After reviewing the SER screen it is determined that the Employer paid only $800 in the third quarter of 2008. The Employer is not liable under any other provision of the Act.
   
   Further assume penalties have been applied to the Employer's Quarterly Report for the third quarter of 2008 which was postmarked on 1-31-09.
   
   Solution 2
   
   The subject date should be changed from 9-30-08 to 12-31-08 and notify ADP & Audit by e-mail regarding the penalties.
   
   The Employer's Quarterly Report and tax money will be timely according to the new subject date. Notify ADP & Audit by e-mail to review penalty if needed regarding the changes. ADP & Audit may wish to correct the extended due date for the third quarter of 2008 to 1-31-09.
   
   
4. If the source of the subject date change is a Status Report received by fax or e-mail, place the Status Report in the Doc Log & Destroy basket.
   
   
5. If Employer's Quarterly Reports need to be moved by journal entry, deleted or reinstated, notify ADP & Audit by e-mail and update the FTC screen to document the actions.

The subject section of an account details the section of the Act under which an Employer became liable for payment of state unemployment tax.

A subject section can be changed on the basis of a Status Report, Employer's Quarterly Report or any type of written correspondence from an Employer or their agent. When changing a subject section it is usually necessary to change the first wages date and/or subject date.

A subject section can be changed on the basis of a telephone call to a responsible party. When the subject section is changed on the basis of a telephone call update the FTC screen to document the call.

The subject section can be corrected by using the STA screen or Form C-10. Form C-10 should be used only in situations where the transaction cannot be performed on the STA screen due to screen edits.

When a potential change to the subject section is encountered, determine whether or not the subject section should be changed. The subject section should be changed only if the current subject section is incorrect and/or the new subject section causes the Employer to be liable earlier than the existing subject section.

If an account is established under 201.021 and information is received that the account should have been established under 201.022:

1. Verify the information received against the EMF. Check the account numbers, acquisition date, last wages date and number of employees to determine if the information supplied by the Employer is correct.
   
   
2. If the information appears incorrect or incomplete, telephone the predecessor and/or successor Employer to resolve any questions.
   
   If all questions are resolved by the telephone call to a responsible party, proceed to step 3.
   
   If all questions are not resolved by the telephone call:
   
   If the Employer is in-state, close the predecessor account reason "7" as appropriate. E-mail an assignment to Field Tax for investigation. Update the FTC screen to document actions on the predecessor and successor accounts.
   
   If the Employer is out-of-state, proceed to step 4.
   
   
3. If the information is correct and the successor has confirmed the acquisition by a phone call to a responsible party, access the STA screen and record the changes.
   
   If an Employer's Quarterly Report needs to be moved by journal entry, deleted or reinstated, e-mail ADP & Audit and update the FTC screen to document the actions.
   
   
4. If the out-of-state successor has not confirmed the acquisition in writing or by a phone call to a responsible party do not record the acquisition on the EMF:
   
   Close the predecessor account reason "7".
   
   If the out-of-state successor has a Status Report on file send a FL-163.
   
   Trace the out-of-state successor account for 3 months.
   
   Update the FTC screen to document actions on both the predecessor and successor accounts.
   
   If the out-of-state successor does not have a Status Report on file but has been requested to complete a Status Report do not ask for confirmation of the acquisition until the Status Report is received. Make any existing information part of the existing trace file.
   
   
5. If no response to FL-163 sent to the out-of-state employer:

6. Access the STA screen and key changes to the successor account.

In Statute Account

Sometimes an account is mistakenly established as a regular taxed Employer when it should have been established as a nonprofit Employer. When the error is encountered it is proper to correct the account and notify the Employer of their right to pay reimbursements in lieu of paying taxes.

The only nonprofit organizations recognized separately from regular taxed Employers are nonprofit organizations holding an exemption under Section 501(c)(3) of the Internal Revenue Code. An account should not be changed to nonprofit status unless the Commission is in receipt of the Employer's 501(c)(3) letter issued by the Internal Revenue Service.

An account should not be changed to nonprofit status on the basis of a telephone call unless Commission records contain a copy of the Employer's 501(c)(3) letter. If a caller requests a change to nonprofit status and Commission records do not contain a copy of the Employer's 501(c)(3) letter, instruct the caller to mail, e-mail or fax a copy of their 501(c)(3) letter. The change should not be processed until the letter is received.

When in receipt of an Employer's 501(c)(3) letter:

1. Review the Status Report.
   
   If the Status Report indicates liability under Section 201.023 (4 or more employees for 20 weeks) proceed to number 2.
   
   If the Status Report does not indicate liability under Section 201.023, telephone the Employer to inquire about their liability under Section 201.023.
   
   If the Employer or responsible party confirms liability under Section 201.023, update the FTC screen to document the telephone call and proceed to number 2.
   
   If the Employer is not liable under Section 201.023, ask the Employer if it wishes to volunteer coverage. The account will then be established under Section 201.024 instead of Section 201.023. If the Employer does not wish to volunteer coverage, the account should be closed as Established in Error.
   
   If a C-1 & 501(c)(3) is received and the volunteer section is completed check the SER screen. If the SER screen has reports posted prior to the year employer wants to volunteer and they do not meet liability, the reports should be deleted.
   
   
2. Access the STA screen and key changes.
   
   

Key liability changes as appropriate.

If any of the following situations apply, you will need to key the 45 Day letter on STA after the account is liable.  Make a copy of the STA screen, circle the form letter section, and place a copy in the box labeled “documents to be mailed with re-opens or new accounts”.

When:

• You set up a 501(c)(3) account using a C-10 when you are setting up the account back to Statute.
• You use the STA and STR screen (to code more than 3 years) to set up the 501(c)(3) account.  You cannot request the 045 Day letter since you are using the STR screen.
• You forget to key the 45 day letter when setting up the 501(c)(3) account on STA or are changing the ownership code to 10 only because the account is already set up past statute.

If Employer’s Quarterly Reports and/or money need to be moved by journal entry, deleted or reinstated, notify ADP & Audit by e-mail and document FTC.

After the overnight tax run the letter is produced and the TDO will show the 45 DAY LETTER. The TRN date will be the date on the letter. The letter will be sent to SOU to mail, it will be mailed on the day it is produced.

Out of Statute Account

1. When a 501(c)(3) exempt letter is received on an account that was established and is out of statute:

• Change the ownership type to a 10 and key 045 in the form letter field on the STA screen to determine if the employer wants to be reimbursing. No trace is needed. Do not change the subject section to 201.023. When the C-6A is received the employer can be a reimbursing employer at the beginning of a year back to statute, as long as the employer had been a taxed employer for at least two years. Prepare a C-10 to establish a reimbursing account. See Chapter 2 - “Changing from Taxed to Reimbursing”. If no C-6A is received then no action is taken.
• If the employer was never liable under section 201.023 then the account can be closed back to statute or current quarter per the request of the employer only.
• If at one point the employer would have been liable under 201.023 and now does not have four or more employees for 20 weeks then at the employers request to close the account the employer can file a C-71 to terminate the account according to the termination rule. See Chapter 2 - “Termination of Coverage.”

2. If Employer's Quarterly Report and/or money is received on an error account, not liable or terminated account that is a 501(c)(3) employer and we have continuously deleted report and refunded money in the past:

• When a new year begins and the employer continues to submit reports and money assign a new account number under 201.024.
• Change the ownership to a 10 and send the 45 day letter.

Access the STA screen and key changes.

Key liability changes as appropriate.

If any of the following situations apply, you will need to key the 45 Day letter on STA after the account is liable.  Make a copy of the STA screen, circle the form letter section, and place a copy in the box labeled “documents to be mailed with re-opens or new accounts”.

When:

• You set up a 501(c)(3) account using a C-10 when you are setting up the account back to Statute.
• You use the STA and STR screen (to code more than 3 years) to set up the 501(c)(3) account.  You cannot request the 045 Day letter since you are using the STR screen.
• You forget to key the 45 day letter when setting up the 501(c)(3) account on STA or are changing the ownership code to 10 only because the account is already set up past statute.

If Employer’s Quarterly Reports and/or money need to be moved by journal entry, deleted or reinstated, notify ADP & Audit by e-mail and document FTC.

Note: Pressing <PF5> before pressing <Enter> will add the record without verifying the first chargeable quarter.

After the overnight tax run the letter is produced and the TDO will show the 45 DAY LETTER. The TRN date will be the date on the letter. The letter will be sent to SOU to mail, it will be mailed on the day it is produced.

Care should be exercised when changing an account from liability under Section 201.022 to Section 201.021. This is especially true when a high tax rate is transferred from a predecessor Employer to a successor Employer. Employers sometimes claim that Section 201.022 does not apply in order to avoid a high tax rate.

If an account is established under Section 201.022 and information is received that the account should have been established under Section 201.021:

1. Determine whether or not the information is supported by Commission records and whether or not the liability change appears valid.
   
   Section 201.022 liability should not be reversed on the basis of an incoming telephone call unless Commission records support the change. If a caller disagrees with Commission application of Section 201.022 and Commission records do not support the Employer's position, instruct the caller to provide the situational facts in writing, by fax or e-mail.
   
   Section 201.022 liability can be reversed on the basis of a telephone call to a responsible party originating from the Status section. If an outgoing telephone call indicates that Section 201.022 was erroneously applied, update the FTC screen to document the telephone call. Access the STA screen and process the changes.
   
   
2. If the information received appears valid and is supported by Commission records, access the STA screen and process the changes.
   
   If Employer's Quarterly Reports need to be moved by journal entry, deleted or reinstated, notify ADP & Audit by e-mail and update the FTC screen to document the actions.
   
   
3. If the information received does not appear valid or is not supported by Commission records, do not process any change to the EMF.
   
   If unable to resolve with phone call and the successor is in state, send a field assignment by e-mail under the successor account number. Update the FTC screen to document actions on both the predecessor and successor accounts.
   
   If unable to resolve with phone call and the successor is out-of-state, write a letter approved by your supervisor to the successor Employer explaining the Commission position. Place a file copy of the letter in the Doc Log & Destroy basket and update the FTC screen to document the action.
   
   
4. Processing this type change on STA (from 201.022 to 201.021) will require two days to perform if the new subject date is later than the acquisition date.

Sometimes an account is established under the wrong employment type. When this occurs it is proper to amend the account so that it reflects liability under the correct employment type.

The employment type can be corrected by using the STA screen or Form C-10. Form C-10 should be used only in situations where the transaction cannot be performed on the STA screen due to screen edits.

To amend the employment type on an account:

If agricultural liability is established under the wrong agricultural subsection type it is necessary to prepare a Form C-10 to process the correction. The STA screen cannot be used to perform this type of transaction.