[ 2.14.1 - C-6A Notification Deadlines ][ 2.14.2 - Reimbursing Dates & Time Limits ][ 2.14.3 - Notification on Unofficial/Official Forms ][ 2.14.4 - Reimbursing Account Numbers & Ownership Types ][ 2.14.5 - Taxed Account Established in Error - Electing to become Reimbursing ][ 2.14.6 - Existing Tax Account Changing to Reimbursing ]

Contributions are paid to the Commission in two ways: taxes and reimbursements. Employers are permitted, with Commission approval, to switch their method of payment from taxed to reimbursing. It is the Status section's responsibility to make this change.

All Employers except the State of Texas are eligible to pay taxes to the Commission, but only certain Employers may pay reimbursements. States, political subdivisions, instrumentalities of states or political subdivisions, organizations exempt under section 501(c)(3) of the Internal Revenue Code and Federally-Recognized Indians Tribes and their Instrumentalities are the only entities eligible to pay reimbursements in lieu of paying taxes.

The reimbursing option is permitted under Chapter 205 of the Act. When an Employer elects to pay reimbursements, they are required to repay the Commission for any benefits paid out to former employees. Employers can benefit from the reimbursing option because if no benefits are paid out, the Employer makes no payment. However, because it is not possible to predict what will occur in the future, there is no way for a reimbursing Employer to know their potential liability. For this reason a Status section employee should never advise an Employer to be taxed or reimbursing.

C-6A Election to Pay Reimbursements

The Act has specific guidelines which must be adhered to when considering an Employer's request to change their method of payment from taxed to reimbursing.

According to the Act, notification of the desire to switch from taxed to reimbursing must be submitted:

1. Within 45 days of the Employer's Liability Notice (Form C-198)
   
   or,
   
   
2. Not later than December 1 prior to the year in which a change to reimbursing is desired.

For example, a taxed Employer receiving a C-198 Letter dated 9-5-08 would have until 10-20-08 to notify the Commission of their desire to become a reimbursing Employer.

As another example, an Employer who wishes to change from taxed to reimbursing effective 1-1-09 would need to notify the Commission in writing on or before 12-1-08.

The Status section is governed by Rule 815.2 when determining the timeliness of a notification. Usually the postmark date of the notification determines timeliness.

If notification is received, verify whether or not the notification is timely. If the notification is not timely, send the Employer the C-6A/C-6F denial letter (template) and indicate the appropriate reason for denial. Place a copy of the letter in the Doc Log & Destroy basket and update the FTC screen to document the actions.

A change to reimbursing status remains in effect until the Commission receives timely notification of the Employer's desire to change their method of payment.

Employers can make changes in their payment method only at the beginning of a calendar year. All changes from taxed to reimbursing are effective January 1. An Employer may not change their method of payment in the middle of a year.

Employers are not permitted to switch their method of payment every year. An Employer must remain with a taxed or reimbursing method of payment for at least two calendar years. If an Employer requests their method of payment be changed prior to the two calendar years, the request should be denied.

If an Employer wishes to change their method of payment from taxed to reimbursing, verify whether or not the Employer has gone at least two calendar years under their current method of payment. If the Employer has not gone at least two calendar years under their current method of payment, send the employer the C-6A denial letter and indicate the appropriate reason for denial. Furnish the Employer with Form C-6A plus the Advantages and Disadvantages information. Place a copy of the letter in the Doc Log & Destroy basket and update the FTC screen to document the actions.

Employers are required to notify the Commission in writing if they desire to change their method of payment to reimbursing. The official form for notifying the Commission of a desire to be reimbursing is Form C-6A. Initial notification does not have to be on the official Commission form. As long as an Employer notifies the Commission timely and in writing, their right to pay reimbursements is preserved. There may be instances where an employer may notify the Commission via phone call requesting to change to reimbursing. If the phone request is made on or near the deadline, the date the phone call is made may preserve the right to pay reimbursements. Check with your supervisor for approval. Send a letter approved by your supervisor enclosing Form C-6A plus the Advantages and Disadvantages information. Update the FTC screen to document the actions including supervisor's approval.

If timely notification is received on an unofficial form:

1. Send the Employer a letter approved by your supervisor to secure a properly completed C-6A. Enclose Form C-6A plus the Advantages and Disadvantages information. Trace the account for 3 months and update the FTC screen to document the actions.
   
   Do not change the account from taxed to reimbursing until a properly completed Form C-6A is received.
   
   
2. If a properly completed Form C-6A is not received within 3 months, send a field assignment by e-mail to secure completed form. If the Employer is out-of-state, write them a letter advising of no further action and return their original notification. The letter must be approved by your supervisor. Update the FTC screen to document the actions.

Reimbursing accounts are issued special account numbers. All reimbursing account numbers begin with the digits 99-99. These numbers are not assigned by the system. Reimbursing account numbers are assigned by the Status Operations Unit (SOU).

Ownership types for reimbursing accounts begin with the numeral "2". Reimbursing ownership types are:

20 - State Agency
21 - Political Subdivision, Out-of-State Governmental Unit and Federally Recognized Indian Tribes & their Instrumentalities
22 - 501(c)(3) Non-Profit
23 - Political Subdivision Group Account
24 - 501(c)(3) Non-Profit Group Account

Often a new Employer does not indicate whether they wish to be taxed or reimbursing. When the Employer does not indicate a preference, the account is established as taxed. The Employer is then allowed 45 days from the date of their Liability Notice (Form C-198) on TDO to notify the Commission of their desire to be reimbursing. If the notification is received timely the account should be corrected.

To correct Commission records it is necessary to close the erroneous taxed account number as established in error and assign the Employer a reimbursing account number. Since reimbursing accounts are assigned special account numbers the transaction must be performed using Forms C-10.

Prepare Form C-10 to close the new employer taxed account number as established in error. All status action must be done on a C-10.

1. Write	Account Number
	AE Number
	Init (Initials)
	Date
	Authority
	Brief Name (above lines 1-6)
2. Write	Regular	Liability Code => 8
	Domestic	Liability Code => 8
	Agricultural	Liability Code => 8
3. Write	Inactive On
	Final Wages Date
	Reason Code => 1
4. Leave "Erroneously Established. Move all reports & changes to:" blank. The new account number will be stamped in this area by SOU once it is assigned. Place an * next to the line in the box.
5. Write “over” at the bottom of the C-10.
6. Delete FEID on back of C-10 in the Addition/Correction of Number (s).
	Action Code => 2
	Type of  Number => 1
	Number =>write FEID
Prepare Form C-10 to activate the new account that will be the reimbursing account.
1. Leave "Account Number" blank. The new account number will be stamped in this area by SOU once it is assigned.
2. Write	AE Number
	Init (Initials)
	Date
	Authority
	Brief Name (above lines 1-6)
3. Write	Type Bus => 20 to 24  (use appropriate ownership type)
	FEID
	Area
	Phone Number
Write the Employer's name and address on lines 1 through 6.
4. Write	Line 1
	Line 2
	Line 3
	Line 4
	Line 5
	Line 6
5. Write	Regular	Liability Code
	Domestic	Liability Code
	Agricultural	Liability Code
	Use appropriate codes:
	1 => Liable
	2 => Not Liable
6.  Write	Subject Section (use appropriate code)
	Subject Date
	1st  Taxable Wages Date
	1st  Chargeable Quarter
Code for each quarter of quarterly report liability as appropriate from the date wages were first paid through the last calendar quarter currently being coded.
7. Write	Year
	Qtr
8. Approve form C-6A by signing and dating it.  Make a copy of the approved    C-6A. Mark through old account number if shown and any DLN numbers. SOU will send one approved copy of C-6A to Doc Log & Destroy and one copy to the employer.
9. Obtain a copy of the Status Report or Amended Status Report (C-1AM) and the 501(c)(3) exemption letter under the previous account and attach it with approved C-6A and Forms C-10. If the Status Report and/or 501(c)(3) exemption letter is on TDO make a copy from Image Viewer. If not on Image Viewer then order a copy. On CMD line enter following: cop,000(line#),AE#. If the Status Report and/or 501(c)(3) exemption letter is not on TDO. You will need to order the folder to secure the Status Report or C-1AM and 501(c)(3) exemption letter. On CMD line enter TFL, put cursor on Folder Request and enter, key AE # and account number, then enter. If the Status Report is not in the same format as the current Status Report, complete the Status Report (lines 1-13) with the information on the old form. The accounts examiner will need to complete the signature section and reference the old account number. Put a copy of the old Status Report and/or 501(c)(3) exemption letter with Forms C-10. The old Status Report will be imaged as employer correspondence, since it cannot be imaged. If the account was established via Unemployment Tax Registration (UTR) the accounts examiner will complete the Status Report based on the information submitted over the Internet. The accounts examiner will complete the signature section and reference the UTR account number and put a copy of the UTR registration with the Status Report. If you are unable to find a Status Report and/or 501(c)(3) on the Image Viewer, TDO, File Folder, or UTR proceed without the missing document(s).
10. Mark through any old account numbers and DLN numbers on the documents included with Forms C-10.
11. SOU will mail the approved C-6A with the liability notice and will send all forms to Doc Log & Destroy.
12.  Prepare Form C-1C by indicating the appropriate type of account being established. Put on top of all documents in red out card.
13. Documents FTC regarding all actions.
14. Place a 02 Status 30 day stop on the account. See Chapter 2 – “Stops”.
15.  Place your red out card with all documents into your immediate supervisor's in-basket.
16.  After being reviewed by your immediate supervisor, they will place red out card with all documents in the C-10’s basket.
17.  The C-10’s will be keyed by Data Processing and the changes will be processed in the tax run.

An Employer may change their method of contribution from taxed to reimbursing only if they have been taxed for two or more calendar years. The effective date of this type of transaction is January 1 of the year in which the Employer desires the change to reimbursing. Since Employers are required to notify the Commission prior to the year in which they desire to change to reimbursing, the transaction cannot be performed until the effective date of the change. System edits prevent transactions from using future dates.

For example, an Employer wishing to change from taxed to reimbursing effective January 1, 2010 must notify the Commission on or before December 1, 2009. The C-6A is held and account is traced without performing the transaction, until January 1, 2010. Document FTC.

When performing this type of transaction the old taxed account is inactivated as December 31 prior to the year in which the change to reimbursing is effective. The new reimbursing account is established with liability beginning January 1 of the year in which the change to reimbursing is effective.

For example, an Employer wishing to change from taxed to reimbursing effective January 1, 2010 would have its taxed account inactivated as of December 31, 2009 with final wages and suspend date as of December 31, 2009. The new reimbursing account would be established with a subject date of 1-1-10 and a first wages date of 1-1-10.

When Forms C-6A are received prior to the effective date of a change to reimbursing, trace the account until the effective date and update the FTC screen to document receipt of the forms. If Form C-6A is received by fax or e-mail send copy to Doc Log & Destroy.

Since reimbursing accounts are assigned special account numbers part of this transaction must be performed using Forms C-10. All status action must be on a C-10.

Prepare Form C-10 to close the taxed account. Label this C-10 “Day 1”.

1.  Write	Account Number
	AE Number
	Init (Initials)
	Date
	Authority
	Brief Name (above lines 1-6)
2.  Write	Inactivate on
	Final Wages Date
	Reason Code => 1
Prepare Form C-10 for the same account to cross reference the reimbursing account. Label this C-10 “Day 2”. This transaction cannot be processed unless the account is inactivated by the Day 1 process above.
1. Write	Account Number
	AE Number
	Init (Initials)
	Date
	Authority
	Brief Name (above lines 1-6)
2.  Write	"over" at the bottom of the C-10
3.  Write	on back of C-10 in the Addition/Correction of Number(s)
	Action Code => 3
	Type of Number => 10
	Number (Leave Blank)
Leave "Account Number" blank. The new account number will be stamped in this area once it is assigned.
Prepare Form C-10 to activate the new account that will be the reimbursing account. Label this C-10 "Day 1".
1. Leave "Account Number" blank. The new account will be stamped in this area once it is assigned.
2. Write	AE Number
	Init (Initials)
	Date
	Authority
	Brief Name (above lines 1-6)
3. Write	Type Bus => 20 to 24 (use appropriate ownership type)
	FEID
	Area
	Phone Number
Write the Employer's name and address on lines 1 through 6.
4. Write	Line 1
	Line 2
	Line 3
	Line 4
	Line 5
	Line 6
5. Write	Regular	Liability Code
	Domestic	Liability Code
	Agricultural	Liability Code
	Use appropriate code
	1 => Liable
	2 => Not Liable
6.  Write	Subject Section (use appropriate code)
	Subject Date
	1st Taxable Wages Date
	1st Chargeable Quarter
Code for each quarter of quarterly report liability as appropriate from the date wages were first paid through the last calendar quarter currently being coded.
7. Write	Year
	Qtr
8. Approve form C-6A by signing and dating it. Make a copy of the approved C-6A. Mark through the old account number if shown and any DLN numbers. SOU will send one approved copy of C-6A to Doc Log & Destroy and one copy to the employer.
9. Obtain a copy of the Status Report or Amended Status Report (C-1AM) and the 501(c)(3) exemption letter (if appropriate) under the previous account and attach it with approved C-6A's and Forms C-10. If the Status Report and 501(c)(3) exemption letter is on TDO make a copy from Image Viewer. If not on Image Viewer then order a copy. On CMD line enter following: cop,000(line#),AE#. If the Status Report and 501(c)(3) exemption letter is not on TDO. You will need to order the folder to secure the Status Report or C-1AM and 501(c)(3) exemption letter. On CMD line enter TFL, put cursor on Folder Request and enter, key AE # and account number, then enter. If the Status Report is not in the same format as the current Status Report, complete the Status Report (lines 1-13) with the information on the old form. The accounts examiner will need to complete the signature section and reference the old account number. Put a copy of the old Status Report and 501(c)(3) exemption letter with Forms C-10. The old Status Report will be imaged as employer correspondence, since it cannot be imaged. If the account was established via Unemployment Tax Registration (UTR) the accounts examiner will complete the Status Report based on the information submitted over the Internet. The accounts examiner will complete the signature section and reference the UTR account number and put a copy of the UTR registration with the Status Report. If you are unable to find a Status Report and/or 501(c)(3) on the Image Viewer, TDO, File Folder, or UTR proceed without the missing document(s).
Prepare Form C-10 to create a cross reference between the new Reimbursing account and the old Taxed account.  Label this C-10 "Day 2".  The cross reference cannot be set up on Day 1.  The 99 account number does not exist until the C-10 establishing the account puts the 99 account number onto the EMF.

 

1.  Leave "Account Number" blank.  The new account will be stamped in this area once it is assigned.
2.  Write	AE Number
	Init (Initials)
	Date
	Authority
	Brief Name  (above lines 1-6)
3. Write	“over” at the bottom of the C-10 form
4. Write	on back of C-10 in the Addition/Correction of Number(s)
	Action Code => 3
	Type of Number => 6
	Number (Old account number)

5. Prepare Form C-1C by indicating the appropriate type of account being established. Put on top of all documents in red out card. 6. Document FTC regarding all actions. 7. Place your red out card with all documents into your immediate supervisor’s in-basket. 8. After being reviewed by your immediate supervisor, they will place red out card with all documents in the C-10’s basket.
9. The C-10’s will be keyed by Data Processing and the changes will be processed in the tax run.