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A Newsletter for Employers September 2023 |
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The first week in October is Customer Service Week and I want to take a few minutes to commend the Michigan Unemployment Insurance Agency (UIA) staff for the important work they do. Every day the strive to make sure employers have a good experience when interacting with the UIA. Employers often let us know how helpful and knowledgeable our staff are in resolving problems. We celebrate those successes, but also recognize that we have to keep improving every day.
We strive to provide gold standard customer service to employers across the state. We’ve trained staff in effective communications. Callers have the option to take a short customer survey to let us know how we did on the phone (nearly 80 percent of you had positive experiences, but we know we can do better). UIA Director Julia Dale has spoken before employer organizations and business representatives are important partners in our UIA Modernization Workgroup.
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We also have seen a strong interest in our online Employer Seminars. The next one will be October 11 and you can sign up on the Employer Homepage of Michigan.gov/UIA. And I’m really excited for the fall rollout of our Employer Help Center, a centralized hub to efficiently manage your most common tax and claim issues.
Open lines of communication such as this monthly newsletter, are also important conduits for conversations between our agency and your business. We will continue to look for ways that we can provide better customer service as part of the UIA’s goal to be a national leader providing fast, fair, and fraud-free service. Please, let us know how we’re doing.
I also want to let you know about a change in the Michigan Business Taxes Registration Booklet from the Michigan Department of Treasury. On Schedule B, Question 2 now asks employers who acquired another organization to include the number of employees. This information will help UIA avoid reversing the tax rate experience transferred from the seller to the buyer and identify businesses acquiring part of another business as opposed to a complete or total transfer.
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As always, if you want to suggest an article or topic for the Employer Advisor newsletter or just want to tell us how much you enjoy reading it, please send a message to UIA-EmployerAdvisor@Michigan.gov. You can view past newsletters on the Employer Homepage at Michigan.gov/UIA. |
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Each year in November, the Unemployment Insurance Agency sends form UIA 1761 Potential Tax Rate Increase Due to Missing Report(s) to employers that have missing reports in the period used to determine rates for the upcoming rate year. The quarters involved are the previous year’s third and fourth quarter and the current year’s first and second quarter.
The UIA wants to help employers who may have missed submitting reports. The agency will send notices by mail to employers this month to allow enough time to provide to the UIA any missing or late reports.
Filing missing reports benefits employers in 5 ways:
1) It allows more time for the employer to file any missing Quarterly Wage/Tax Reports and become compliant with agency rules.
2) One or more missing reports for the rate calculation period will result in a 3 percent non-reporting penalty being added to the upcoming rate. All missing reports must be filed to avoid the non-reporting penalty.
3) Filing the missing reports will help UIA provide an accurate rate for the upcoming year.
4) Filing missing reports before the new rate is issued will avoid adding and adjusting the non-reporting penalty.
- If missing reports are received within 30 days of the date of the rate notice, the
3 percent non-reporting penalty will be removed.
- If missing reports are received from 31 days to one year after the date of the rate notice, the non-reporting penalty will be changed to 2 percent.
- If the missing reports are received more than one year after the date of the rate notice, the 3 percent non-reporting penalty will not be removed.
5) Having missing reports will affect an employer’s 940 filing with the federal Internal Revenue Service (IRS) if missing quarters are reported as having been filed.
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If you have closed, sold, liquidated, or discontinued your business; do not have employees; or do not anticipate having employees in future quarters we need to know so we can update our records.
To notify us of your status, submit Form UIA 1772, Notice of Change. For faster processing, submit the form through your Michigan Web Account Manager (MiWAM) account by going to the Account Services tab and selecting Notice of Change. You may also click on the Form UIA-1772 link to download a pdf version of the form.
Complete the form and mail it to:
Unemployment Insurance Agency
P.O. Box 8068, Royal Oak, MI, 48068-8068
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Filing the missing reports has a bigger impact on your tax rate than paying the unemployment taxes that are due. It is more advantageous for you to file the report even if you cannot pay taxes to avoid the non-reporting penalty.
UIA offers payment plans to employers that have difficulty paying taxes. However, you can’t enter into a payment plan if:
- There are any missing Quarterly Wage/Tax Reports or errors on previously filed reports.
- You are currently in a payment plan or have defaulted on two prior payment plans.
- If you are in bankruptcy.
Review your entire account to make sure none of those conditions exist.
If you have questions or require additional information, contact Tax Collections through the UIA's Office of Employer Ombudsman at (855) 484-2636, option #6 then option #1.
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You should have your own MiWAM account even if you have a third party processing your payroll. The account allows you to monitor activity, review correspondence, communicate with the UIA, and process requests online.
It is ultimately the employer’s responsibility to file and pay the Quarterly Wage/Tax Report. To avoid being assessed the non-reporting penalty, submit the reports through your MiWAM account. We do not accept paper forms.
If you don’t have an account, you can create one through the MiWAM For Employers link on the Employer Homepage at Michigan.gov/UIA. You will need your Employer Account Number (EAN), Federal Employer Identification Number (FEIN), and ZIP Code for the business' location.
Once your account is set up, review to determine if all reports have been filed. If reports are missing, contact your payroll service. Ask them for the confirmation number for the report that was submitted.
If you have a confirmation number, let us know so we can investigate. Send an e-mail to TaxSupport@Michigan.gov or contact the Tax Maintenance unit through the Office of Employer Ombudsman at (855) 484-2636, option #5.
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In addition to state unemployment taxes, contributing employers also pay a federal unemployment insurance tax known as FUTA (Federal Unemployment Tax Act).
The tax rate is a maximum of 6 percent on the first $7,000 of taxable wages for each employee each year. However, there is an allowable maximum credit of 5.4 percent.
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The FUTA Certification Program is the method the federal Internal Revenue Service (IRS) uses to verify with Michigan and other states that the credit employers claim on the Form 940 or Schedule H was paid into the states’ unemployment funds.
If there is a discrepancy, the IRS will notify the employer. If the employer disagrees with the IRS, they can request a recertification (940-c) from their MiWAM account.
A Professional Employer Organization (PEO) can request a 940 certification for their clients but must provide Form UIA 6324 to establish the PEO relationship before the certification can be issued.
The UIA will certify the wages and taxes paid for the requested year.
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Some of the most common discrepancies are:
- The employer has missing reports or unpaid taxes.
- The employer reports the payments of the obligation assessment portion of the tax rate. The obligation is an assessment and is excluded from the taxes paid on the 940.
- The employer includes wages paid when buying a business in the middle of the tax rate year. The taxable wage base is adjusted to reflect wages from the previous employer.
- The employer changes their Federal Tax ID Number (FEIN) in the middle of the tax year.
The UIA reports wages based on the FEIN. To minimize reporting errors, employers should verify the FEIN listed on their UIA account. To verify wages, view the Yearly Wage Evaluation in your MiWAM account.
For questions about the 940 Certification, contact Tax Maintenance through the Office of Employer Ombudsman at 1-855-484-2636, option #5.
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The Unemployment Insurance Agency provides resources to support employers who may experience an interruption to their business as a result of the UAW strike against Detroit’s automakers. These include:
Work Share: Provides an option to reduce employee hours while still keeping your skilled workforce intact. Employees can collect partial unemployment benefits to make up for some of the pay they would lose if their hours were reduced.
Registration and Seeking Work Waiver: During a brief unemployment period, this program waives the requirement that workers must register and search for work while receiving unemployment benefits. This assures employers that their trained and skilled workforce is available to return to work when the temporary layoff ends.
Employer Filed Claims: Employers can submit to the UIA unemployment claims information on behalf of briefly unemployed full-time workers. This fast and secure method assures the accuracy of information provided to the UIA and reduces the potential for fraud.
Businesses with questions about these and other programs can call the Office of Employer Ombudsman at 855-484-2636 or go to the Employer Homepage at Michigan.gov/UIA for more information and resources.
UIA is part of the Michigan Department of Labor and Economic Opportunity (LEO), which also provides resources for workers and employers, such as submitting a Worker Adjustment and Retraining Notification (WARN), LEO Rapid Response, and Michigan Economic Development Corporation (MEDC) guidance.
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