Voluntary Contribution Program

Texas employers have the option of voluntarily paying an amount equal to all or part of their share of "chargebacks" or unemployment benefits paid to their former employees, in order to lower their tax rate. By electing to pay all or part of the chargebacks, the effective tax rate is recalculated and a revised tax rate notice is issued.

Each December, TWC notifies employers of their tax rate for the forthcoming year. A Voluntary Contribution Election (Form C-24) is included with the annual Tax Rate Notice (Form C-22) for accounts charged with unemployment benefits within the three-year computation period. Each employer can analyze their individual account history and subsequently determine whether or not the voluntary contribution election is cost effective.

The Voluntary Election Analysis and the desired contribution amount are due no later than the 60th day after the date on which the commission mails the Employer's Annual Tax Rate Notice. The election must either be postmarked by the United States Post Office, received by a commercial carrier for delivery to TWC, hand delivered to a TWC Tax Office, or submitted via Unemployment Tax Services during the time frame. If the last date for payment falls on a Saturday, Sunday, or a legal holiday on which the agency is closed, the payment may be made on the next regular business day.

The amount of a voluntary contribution may be equal to all or part of the chargebacks used in the rate computation. Partial contributions are applied first to the most recent chargebacks acquired. The election may not be withdrawn once the Agency has recomputed the tax rate. If an adjustment to taxable wages or benefit charges for the three-year computation period occurs after the voluntary contribution has been made, the original resulting tax rate recomputation may be affected.

Because every employer account contains distinctive taxable wage and chargeback information that is specific to that account, careful consideration should be exercised before participating in this option.

Return to Tax Information