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| Taxable Wage Example - One Employee | ||||
|---|---|---|---|---|
| Quarter | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter |
| Total Wages Paid | 7,500.00 | 7,500.00 | 7,500.00 | 7,500.00 |
| Wages over $9,000.00 | 0.00 | 6,000.00 | 7,500.00 | 7,500.00 |
| Taxable Wages Paid | 7,500.00 | 1,500.00 | 0.00 | 0.00 |
| Effective Tax Rate | 2.70% | 2.70% | 2.70% | 2.70% |
| Amount of Tax | $202.50 | $40.50 | 0.00 | 0.00 |
This example illustrates how to arrive at the taxable wage amount for an employer with multiple employees.
| Taxable Wage Example - Multiple Employees | ||||
|---|---|---|---|---|
| 1st Qtr Total | 1st Qtr Taxable | 2nd Qtr Total | 2nd Qtr Taxable | |
| Employee A | 5,000.00 | 5,000.00 | 5,000.00 | 4,000.00 |
| Employee B | 10,000.00 | 9,000.00 | 10,000.00 | 0.00 |
| Employee C | 3,000.00 | 3,000.00 | 3,000.00 | 3,000.00 |
| LINE 13 Total Wages | 18,000.00 | 18,000.00 | ||
| LINE 14 Taxable Wages | 17,000.00 | 7,000.00 | ||
An employer must file reports for each quarter even if he has zero taxable wages and does not owe any tax. It is important that Line 14 contain either the taxable wage amount or a 'zero' if there are no taxable wages. Although reimbursing employers do not pay this tax, they must also submit an Employer's Quarterly Report to report wages paid to their employees.
Taxable wages reported by a predecessor account may be used in arriving at the $9,000.00 taxable wage base for the successor account during the same calendar year provided there has also been a transfer of compensation experience between accounts.
Registered users of Unemployment Tax Services, the free TWC online utility, should update their online profile any time they change e-mail addresses. TWC uses the e-mail address to enable online password changes as well as a means of notifying employers.
Updating the profile is quick and easy. After logging in to Unemployment Tax Services, select the "My Profile" link from the upper right of any page. Next, the user will enter the new e-mail address and then submit.
To ensure that e-mails are received and not filtered, users should add the TWC e-mail addresses taxserv@twc.state.tx.us and tax@twc.state.tx.us to their address book.
Annual Domestic Reporting
The annual report and contribution for domestic accounts that have requested annual filing is due on or before January 31, 2009.
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 web site.
Earned Income Tax Credit
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?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/central/Preview2009/ or, http://www.twc.state.tx.us/welref/wrjseek.html
2010 Unemployment Insurance Tax Rates
Rising unemployment and layoffs placed increased demand on the Unemployment Compensation Trust Fund in 2009. As a result of this greater demand, and as required by formulas set in state law, 2010 employer tax rates will rise in order to replenish the fund.
The Texas Workforce Commission (TWC) has taken actions to minimize tax increases and keep as much money as possible in the Texas economy. First, each employer's deficit tax was adjusted down by 50 percent. The agency has secured interest-free loans from the U.S. Department of Labor through the end of 2010. Also, the agency will work with the Texas Public Finance Authority to issue bonds in the private sector next year to access funds at a lower interest rate than what will be available from other sources beginning in 2011.
The components of your 2010 tax rate are:
You also may be able to reduce your employer taxes for 2010. 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 http://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. Under the Voluntary Contribution Analysis link, you will find a convenient way to calculate a "buy down" and evaluate the return on the up-front investment.
TWC is dedicated to finding ways to lower the financial impact of rising unemployment on Texas employers. One of the most effective ways is to help those who are out of work find a new job as soon as possible. This rapid reemployment emphasis is a primary focus of TWC and the 28 local workforce development boards. Together, we can weather the current economic challenges.
Those employers who employ only domestic employees may file and pay their Texas Unemployment Tax annually instead of quarterly. An employer who elects to report wages and pay contributions on an annual basis must complete and return the Annual Domestic Election Form by December 31 to enable them to begin filing annually for the next year.
Only those employers who have only domestic employment qualify for annual filing. Employers are not eligible for annual filing if they have more than one type of employment.
The election form must be postmarked no later than December 31, 2009 to be effective for calendar year 2010. If you have questions about electing to report annually, please contact any TWC Tax Office or contact the TWC Tax Department Status Section at (512) 463-2731 or e-mail us at tax@twc.state.tx.us.
Computation of the 2010 unemployment insurance tax rate is based on your employment experience for the past twelve calendar quarters. Benefit payments charged to your tax account and taxable wages, which you have reported and on which you have paid taxes, are used in the computation.
The Labor Code, Texas Unemployment Compensation Act, provides that only taxable wages on which taxes have been paid by October 31, 2009 can be used to compute your tax rate. If you have unreported wages or unpaid taxes that are due from the twelve quarters proceeding October 1, 2009, you are encouraged to submit your report(s) and payment by October 31, 2009. Payment of unemployment insurance taxes may decrease your 2010 tax rate.