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Unemployment benefit chargebacks are amounts of paid unemployment benefits charged to an employer’s tax account for use in calculating the employer’s unemployment tax rate. A chargeback is the total amount of regular unemployment benefits (plus 50% of extended benefits, if applicable) paid to a claimant and charged to the base-period employers’ tax accounts. If there are multiple base period employers, the amount of each employer’s chargeback is based on the base period wages it paid.
Chargebacks are not money you owe unless you have chosen to be a reimbursing employer. For information on reimbursing employers and protecting your account from reimbursements, see Wage Verification Notice, Reimbursing Employers.
Chargeback amounts are benefits actually paid. If claimants do not collect all of the benefits they qualify to receive, the benefits not drawn are not charged to your tax account.
After a claimant receives their first benefit payment, TWC mails a Notice of Maximum Potential Chargeback to their base-period taxed employers, except the last employer, showing the maximum amount of benefits TWC may potentially charge to the employer’s account.
The Notice of Maximum Potential Chargeback asks base-period employers to give the reason for the claimant’s separation so we can evaluate whether to charge the employer’s tax account for benefits paid to the claimant.
If you wish to protest the chargeback amount, you must do so within 30 calendar days of the date we mailed the notice to you.
If you do not respond to the Notice of Maximum Potential Chargeback, you will be charged as shown.
We do not mail the Notice of Maximum Potential Chargeback to the last employer. If you are the claimant’s most recent employer, we send you a Notice of Application for Unemployment Benefits and if you respond to that notice, we send you a determination that includes your appeal rights chargeback information. You do not have further rights to protest the chargeback except in cases of clerical or machine errors that affect the potential chargeback shown on the Wage Verification Notice.
If you are the claimant’s last employer on a claim, and the person separated because of misconduct or quit without good cause connected with the work, you may be exempt from paying reimbursements for benefits paid. TWC will send you an Employer Notice of Unemployment Claim and if you respond timely to that notice, we will send you a decision that advises whether you will be billed for any benefits paid. If you disagree with the decision, you can file an appeal.
If you are not the claimant’s last employer, and TWC used wages from your company to calculate and pay benefits, we will send you a Wage Verification Notice. If the person separated because of misconduct or quit without good cause connected with the work, you can file an appeal to the reimbursements. The wage verification notice includes the instructions to file an appeal.
You have 30 calendar days from the date we mailed the form to protest the chargeback notice and present facts to prevent the chargeback to your account. You can protest a chargeback by completing the back of the form and faxing or mailing it to TWC. The back of the notice allows you to provide the reason the claimant is no longer working for you.
Texas Workforce Commission
Chargeback Determination Unit
101 E 15th St
Austin, TX 78778-0001
When we make a decision on a chargeback you have protested, we mail you a Charge Liability Decision. That decision shows whether the claimant’s benefits are chargeable to your account.
You have 14 calendar days after the decision mailing date to submit a timely appeal. See Appealing a TWC Unemployment Benefits Decision.