Tax Department Tip of the Month

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Overview

Tax tips are provided as a resource for helpful hints and time-saving suggestions when registering, filing and paying your unemployment taxes and managing your unemployment tax account.

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November 2014

Notify Employees of the Federal Earned Income Tax Credit (EITC)

In accordance with Texas Labor Code 104.004 (a) and  HB 2360 passed during the 81st Texas Legislative Regular Session, employers (a person who employs 1 or more employees) must notify all of their employees (an individual who is employed by an employer for compensation) of the federal earned income tax credit (EITC) general eligibility requirements, no later than March 1 of each year.  The EITC is a refundable federal income tax credit for low to moderate income working individuals and families.

How may an Employer provide notice to its employees?

  1. In person;
  2. Electronically at the employee’s last know e-mail address;
  3. Through a flyer included, in writing or electronically, as a payroll stuffer; or
  4. By mailing the information to the employee at the employee’s last known address by United States first class mail.

Employers may use IRS Notice 797, or a written statement with the same wording as IRS Notice 797 when notifying employees. IRS – Notice 797 provides employees with the basic information for EITC.

There are several websites created to assist employees with additional information, eligibility requirements, general overview and income guidelines for EITC.

For more information, go to: http://www.eitc.irs.gov/ or http://www.twc.state.tx.us/welref/wrjseek.html

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October 2014

Potential Scam Against Employers – Don’t be Taken Advantage of

Recently, businesses have reported receiving notices in the mail regarding Lien Reductions. These Lien Reduction  letters are not from the Texas Workforce Commission.

Should you receive a letter that you are not certain about, please call or email us immediately. We can be reached at: tax@twc.state.tx.us. Additionally, a list of tax offices is posted online at: http://www.texasworkforce.org/ui/tax/unemployment-tax-contacts.html.

As ever, do not make payments or give personal information to persons you do not know.

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September 2014

Administrator Self Removal

Unemployment Tax Service Account Administrators can remove themselves from association with an account using the following guidance:

  • At the my home tab, select my employers in the quick links box
  • From the list of employers, find the account number that needs to be removed
  • Under action, the choices are select or remove
  • Click remove and follow instructions on the pop-up window

For assistance with other Unemployment Tax Services issues  please contact your nearest Texas Workforce Commission Tax office: http://www.texasworkforce.org/taxcontacts

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August 2014

Employers don’t forget to submit your Status Report

  • A newly subject Employer must file a Status Report within 10 days of its liability date.
  • Payroll services and other companies preparing your Employer’s Quarterly Reports may not offer this service.
  • Your local TWC Field Accounts Examiner may be contacting your office to help you comply with this requirement.
  • The Status Report (Form C-1) can be found online at the following link:

    What is the purpose of the Status Report?

    • Identifies the legal ownership.
    • Identifies the section of the law under which the Employer becomes liable and the date of 1st wages and liability.
    • Notifies the Commission of a change in any of the information previously submitted.

Call your local tax office for help: http://www.texasworkforce.org/taxcontacts

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July 2014

Unemployment Tax Services — Processing Times

Unemployment Tax Services processes the daily business twice daily. The processing typically occurs at 6:30 p.m. (Central Standard Time) and again at Midnight. During processing we do not allow the system to accept new information. To ensure that you do not encounter any issues when filing your reports, we encourage you to file your reports before 6:00 p.m.

As the last days of the month are always going to be the busiest; you may decide to avoid the last minute rush by filing earlier in the month.

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June 2014

Unemployment Tax Services - Self Remove Association


Any user of Unemployment Tax Services may remove their access to tax account(s) without intervention by TWC staff. This feature greatly benefits bookkeepers who may change clients and who tend to be the sole user with access to the employer unemployment tax account.

The following steps should be taken by users to remove their association from an employer tax account:

  1. Logon to Unemployment Tax Services https://services.twc.state.tx.us/UITAXSERV/security/logon.do
  2. Select the My Employers link from the Home page.
  3. Select the Remove link located next to the employer account you wish to remove.
  4. Select the Yes button on the Confirmation page. Users receive the following message on the Confirmation page: "Removing this employer will permanently take away your access to the employer's unemployment tax account. Are you sure you want to continue?"
  5. Confirmation message "Employer removed" will display.

If you have questions about the self-removal process, contact your nearest Unemployment Tax Office.

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May 2014

Penalties for Worker Misclassifications


House Bill 2015, signed by the Governor on June 14, 2013, and effective on January 1, 2014, authorizes a penalty to be imposed on a person who contracts for services with a governmental entity and who fails to properly classify their workers. This applies to subcontractors as well. Contractors and subcontractors who fail to properly classify individuals performing work under a governmental contract will be penalized $200 for each individual that has been misclassified. Governmental entities may want to include information on this new misclassification penalty in their contracts with entities that are providing services covered by this new requirement.

Workers should be properly classified as employees or independent contractors. These penalties could be assessed as early as May 1, 2014.

Review our 20-point comparative approach as a guide to determine if a worker is an employee or an independent contractor.

Misclassification of certain workers is outlined in the Texas Unemployment Tax Act (TUCA), Section 214.008.

If you have questions about penalties for worker misclassifications, please contact your nearest Texas Workforce Commission Tax office.

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April 2014

Unemployment Insurance –Electronic Reporting and Payment Options

Effective with the 1st quarter of 2014, all employers must report wages and make their tax payments electronically.

Filing reports and paying taxes electronically, benefits both you the employer and your state government by saving time, paper and resources. To learn more about electronic reporting methods, visit the Employer’s Quarterly Wage Report Filing Options page. For information on electronic payment methods, visit the Payment Options for Unemployment Tax page.

If you have questions about filing and paying electronically, please contact your nearest Tax office for assistance.

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March 2014

Unemployment Tax Services – Self Reset Your Password

Unemployment Tax Services offers a self-reset password process for users who have either forgotten or revoked their password.

Forgotten Passwords

  1. Select the Forgot Password link from the Logon page.
  2. Enter the User ID and Name.
  3. Enter the Security Answer.
  4. Enter and retype the new Password.

Revoked Passwords

The Reset Password program is automatically invoked when the user revokes their password or fails to correctly answer their security question after two attempts.

  1. Enter and retype the new Password on the Reset Password page.
  2. Click the link provided in the email message that has been sent to your email address on file.
  3. Enter your User ID and new Password on the Finish Password Reset page to finalize the reset process

For assistance with resetting your password, please contact your nearest Texas Workforce Commission Tax office.

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February 2014

Unemployment Tax Services – Account Administration

Unemployment Tax Services is the Texas Workforce Commission’s free Internet system that allows employers with 1,000 or fewer employees to manage their unemployment tax account online.

Along with filing and paying unemployment taxes and it numerous other features, the Unemployment Tax Services system:

  • allows the account owner, partner, officer or other designated representative  to become the administrator for the TWC account
  • allows the administrator to approve or deny access to their TWC account information.
  • allows the administrator to assign the appropriate access permissions to the TWC account. For example, you can allow your bookkeeper or employee to file your report but prevent access to your banking information.
  • allows the administrator to reset passwords if an employee gets revoked
  • allows each employee to retrieve forgotten passwords online without intervention from TWC staff by answering a security question they provided during registration

For more information about account administration, requesting access and permissions for the Unemployment Tax Services system, visit the Accessing an Unemployment Tax Account – Frequently Asked Questions page.

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January 2014

Annual Domestic Reporting

The annual report and contribution for domestic accounts that have requested annual filing is due on or before January 31, 2014.

The online version of the annual report is available now for those domestic employers who elected to file and pay their state unemployment tax annually. TWC encourages Annual Domestic Filers to file their annual report and pay their tax due online by using Unemployment Tax Services, a free online service. During the quick and simple registration process, new users create a User ID and password that will be used each time they access the online system. To register for access and to learn about other online services, visit our Unemployment Tax Services website.

Tax Rates

Tax Rate notices have been mailed. When you receive your notice, please forward a copy to your Service Agent, CPA, or bookkeeper so they can update their files. If you use "QuickFile or Intuit" you will need to update your software to show the correct Tax Rate.

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December 2013

Unemployment Insurance Tax Rates for 2014

Dear Employer:

With continued economic growth and prosperity in our state, Texas Workforce Commission (TWC) has taken steps to minimize increases in the overall unemployment insurance tax bill to Texas employers and to make responsible decisions that will result in savings to businesses in Texas.

At the end of 2010, TWC sold bonds through the Texas Public Finance Authority in order to avoid interest that would have become due on federal advances. Although employers will see an obligation assessment added to the unemployment tax bills to repay the bonds, we are keeping employers’ taxes as low as possible by spreading this over a period of several years. The bonds, originally due to mature in July 2020, are on schedule to be retired in July 2017.

The components of your 2014 tax rate are:

  • The obligation assessment – to collect the amount needed to repay the bond obligation due next year. It is experience-rated, based on your 2013 tax rate.
  • The general tax – based on claims against your account. If TWC has paid benefits to former employees who were laid off or separated through no fault of their own in the past three years, you will pay the general tax.
  • The replenishment tax – charged to all employers to cover unemployment claims not charged to a specific employer. This tax tends to rise following economic downturns when claims increase and businesses close.
  • The employment and training investment assessment – a flat tax of 0.1 percent, paid by all employers, used to fund the skills training program.

You may be able to reduce your taxes for 2014. If TWC paid benefits to your employees who were laid off or separated through no fault of their own, you may find it beneficial to “buy down” the tax rate. Please visit our web site at www.texasworkforce.org and click on the Businesses and Employers menu link for more information or access the voluntary contribution analysis through Unemployment Tax Services.

At TWC, we work hard to minimize your unemployment insurance costs. In addition to lowering the tax burden, TWC is taking an aggressive approach to eliminate fraud, waste, and abuse of all kinds in the programs the agency administers. By reporting new hires immediately to the state Attorney General’s office, responding promptly to notices when a former employee applies for unemployment benefits and responding to earnings information requests on claimants, you can help us avoid overpayments and fraud which costs all employers.

TWC works closely with local workforce development boards across Texas to fill job openings with qualified unemployed workers, and we fund training to upgrade the skills of workers to better match area employers’ needs. TWC also works closely with economic development organizations to support existing Texas companies and to bring new business to the state. We pledge our continued efforts in helping to keep taxes as low as possible and mitigating the effects on your business.

Texas Workforce Commission
Austin, Texas 78778

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Last Verified: October 27, 2014

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