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Tax Tip for May 2013

Unemployment Tax Services – Calculation of Your Taxable Wage Base

Taxable wages are calculated and tax is paid only on the first $9000.00 of wages paid to each employee during the calendar year.

Employers should ensure they are properly calculating the wage base used to compute their unemployment  taxes.

Use of Unemployment Tax Services to file wage reports will ensure proper calculation of the wage base as long as the employee wage information has been entered correctly.

By using Unemployment Tax Services:

• you can eliminate overpayment of unemployment taxes
• you help resolve the misreporting of information to the Internal Revenue Service regarding your unemployment tax account
• you help eliminate the need for corrections to your tax account.  

To use Unemployment Tax Services, requires registration. During the quick and simple registration process, you will create a User ID and password that will be used each time you access the online system. To register and to learn about other online services, visit Unemployment Tax Services.

If you have questions, please contact your nearest tax office.

Tax Tip for April 2013

Unemployment Tax Services  - Update E-mail Address

Registered users of Unemployment Tax Services, the free TWC online utility, should update their e-mail address any time there is a change. TWC uses the e-mail address to enable online password changes as well as a means of notifying employers.

Updating your e-mail address is quick and easy. After logging in to Unemployment Tax Services, simply select the Update E-mail Address link located next to your present e-mail address in the User Information block. Next, 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.

Tax Tip for March 2013

IRS 940 Proof of Credit

TWC receives periodic requests from employers, employers' designated representatives and the IRS for re-certification of TWC tax accounts.

• Please be aware that TWC can only send a verification of the information we have received via quarterly reports or payments.
• If any changes need to be made to the account, it is the responsibility of the employer.
• Verification of account information can be found by logging onto Unemployment Tax Services.
• Request a 940 Certification via the Unemployment Tax Services system or by emailing us at  tax940.certreq@twc.state.tx.us

If you have additional questions, please contact your nearest local tax office.

Tax Tip for February, 2013

Employer Record Keeping

Excerpts from Texas Workforce Commission Rule 815.106 state:

Each employing unit shall keep true and accurate employment and payroll records, that shall include:

• the individual's name, address and social security number;
• the dates on which the individual performed services for the employing unit and the state or states in which the services were performed;
• the amount of wages paid to the individual for each separate payroll period, date of payment of the wages, and amounts or remuneration paid to the individual for each separate payroll period other than "wages", as defined in the Act; and
• whether, during any payroll period the individual worked less than full time, and if so, the hours and dates worked.

These records shall be preserved for four (4) years.

Tax Tip for January, 2013

Annual Domestic Reporting

The annual report and contribution for domestic accounts that have requested annual filing is due on or before January 31, 2013.

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.

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.

Tax Tip for December, 2012

Texas Workforce Commission
Unemployment Insurance Tax Rates for 2013

Dear Employer:

Although the economy continues to challenge every aspect of business, including the cost of unemployment taxes, we are beginning to see signs of improvement on the horizon. At the Texas Workforce Commission (TWC) we were unwilling to wait on that brighter future and have taken steps to minimize increases in the overall unemployment tax bill to Texas employers and to avoid the large fluctuations in tax assessments that we have seen in prior economic downturns.

The 78th Texas Legislature granted TWC the authority to find alternative methods of financing shortfalls in the Unemployment Compensation Trust Fund.  At the end of 2010, the Texas Workforce Commission sold bonds through the Texas Public Finance Authority in order to avoid interest that would have become due on federal advances.  On October 1, 2012, for the first time since 2008, the balance in the unemployment trust fund was above the floor.  

Although employers will see an obligation assessment added to the unemployment tax bills to repay the bonds, by spreading this over a period of several years at a significantly lower interest rate, we are keeping employers’ taxes as low as possible while replenishing the unemployment trust fund.  The components of your 2013 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 2012 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, and is used to fund the skills training program.

You may be able to reduce your taxes for 2013.  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 Service.

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

Tax Tip for November, 2012

E-mail Phishing - Wage and Separation Pay Information

TWC has become aware of an e-mail phishing scheme that appears to come from a legitimate government agency requesting wage and separation pay information on former employees. Employers should be wary of any e-mails that request personally identifiable information (PII) even if they appear to come from TWC or another government agency.

You can call the government agency directly to verify the legitimacy of the request. If an employer receives this type of e-mail, they can report the incident to the TWC Fraud division at 800-252-3642 or to the U.S. Department of Labor at 866-487-2365.

Hiring Red, White & You! Job Fair Set for November 15

Calling all Texas employers! Join TWC on November 15 for the free Hiring Red, White & You! statewide job fair, which aims to connect you – Texas employers – with Texas veterans and their spouses who bring valuable experience and discipline to the workplace. Job fairs will take place throughout the state on November 15, and it's free for employers and veterans to participate!

View a list of job fair times and locations. Sign up to participate today, and we will see you all across Texas on November 15.

Annual Domestic Filing

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, 2012 to be effective for calendar year 2013. 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.

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Tax Department Tip of the Month

Tax Tip for October, 2012

2013 Unemployment Insurance Tax Rate

Computation of the 2013 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, 2012 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, 2012, you are encouraged to submit your report(s) and payment by October 31, 2012. Failure to pay unemployment insurance taxes may cause your 2013 tax rate to increase.

Tax Tip for September, 2012

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.

Bookkeepers who were no longer providing a service for certain employers were required to contact either TWC or an account administrator of the account to have access to the account removed. In many of these cases, the users were forced to contact TWC because the account administrator had left employment or could not be reached. Pending users and users other than account administrators were then rendered unable to either gain access or manage the account. This feature greatly benefits bookkeepers who are constantly changing their clientele base and 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.
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.

Tax Tip for August, 2012

Leaving Item 14 (Taxable Wages) on your Employer's Quarterly Report blank can cost you.

Texas employers pay state unemployment tax on the first $9,000.00 of wages per employee per year. Item 14 of the Employer's Quarterly Report Form (C-3) contains the taxable wages figure used to compute the amount of tax due.

When Item 14 is left blank, TWC's accounting system uses the total wages figure as taxable wages. Employers may receive an incorrect tax bill when this happens. Employers must also submit adjustment reports to correct the over reported taxable wages figure. A reduction in taxable wages could impact tax rates if prior years are involved. Before submitting your Employer's Quarterly Report, please be sure that Item 14 displays the correct taxable wages figure.

If you have questions about taxable wage calculations, please contact your nearest Unemployment Tax Office.

Tax Tip for July, 2012

Keep TWC notified of changes to your business

It is important that TWC be notified of any change in business.

By doing so:

• you can avoid penalties for failure to maintain or submit required reports,
• you enable TWC to make a prompt ruling on the unemployment tax rate in the event of a merger, acquisition or other change in ownership,
• you can more promptly receive a credit notice or refund, and
• you minimize the risks of unusual problems with your account.

Any change to the makeup of your business can be conveyed to TWC by e-mail at tax.statussection@twc.state.tx.us or by contacting your nearest Unemployment Tax Office.