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Michigan Department of Labor and Economic Opportunity sent this bulletin at 02/26/2025 03:20 PM EST
A Newsletter for Employers February 2025
Unresolved Account Issues Negate an Employer's Reduction in Taxable Wage Base for 2025
Most Michigan businesses will pay less in unemployment insurance taxes in 2025. To qualify for the reduction, a business cannot have missing or late reports or outstanding payments to the Michigan Unemployment Insurance Agency (UIA).
On Feb. 3, 2025, UIA mailed a Notice of $9500 Taxable Wage letter to 40,586 delinquent employers. It explained how to bring accounts up to date and qualify for the reduction. Employers who did not resolve account issues and return the form in time will not qualify for the reduced taxable wage base this year. The deadline to bring accounts up to date has passed.
An employer is considered delinquent if:
They are missing any quarterly tax report, or a quarterly tax report is estimated.
There is an unpaid balance of $25 or more in tax, interest or penalty.
Those who brought their accounts up to date should have received a Notification of Reduced Taxable Wage Base for Qualified Employers letter.
Under the reduction that went into effect Jan. 1, 2025, qualified employers will be taxed on the first $9,000 in wages per employee. That is a $500 reduction in the previous taxable wage base of $9,500 per employee, which was in place since 2021.
How UIA Uses U.S. Treasury's Offset Program to Collect Employer Debt
Businesses pay taxes to support the unemployment insurance program in Michigan. Each has its own tax rate that is assessed on a portion of their employees’ wages.
But what happens if an employer does not pay into the program that is a lifeline for their employees should they lose their job through no fault of their own?
If an employer has a delinquent unemployment insurance debt, they will be subject to automatic collection of any federal money paid to the employer through the federal Treasury Offset Program (TOP). For example, a federal tax refund could be withheld to cover the debt.
Here’s what you need to know about TOP:
How it works: TOP uses a centralized database to match debt against payments that will be made by the federal government. The delinquency remains active until the balance of the debt is zero or the debt is closed.
The program is administered by the U.S. Department of Treasury’s Bureau of Fiscal Services (BFS).
Not just employers: Sole proprietors and business partners can also be sent to TOP as a business responsible party (BRP) using the BRP’s Social Security number and business federal employer identification number (FEIN).
TOP also pursues debt payments owed by claimants.
These are the rules: Debt is only collectible under TOP if it is:
Delinquent and all efforts for collection have been exhausted.
Legally enforceable (not in bankruptcy, forbearance or under a timely protest/appeal).
$50 or more.
Owed by an entity other than another federal agency.
Michigan is not alone: All states are required to use TOP to recover unpaid UI debt that is determined to be due and collectible.
How employers are notified: UIA mails a Notice of Intent to Withhold Federal Income Tax Refund form. If there is a BRP, a form will also be sent to the BRP’s address. The employer has 60 days from the mail date of the form to submit a written request disputing the debt.
If the employer requests a review, enclose a copy of the TOP form. UIA’s Tax Enforcement Unit (TEU) will examine the account and issue a Treasury Offset Program Review Response with its findings and whether the debt will be sent to TOP.
Mail requests to Unemployment Insurance Agency, P.O. Box 8068, Royal Oak MI 48068-8068
If the employer does not request a review, the debt is submitted to TOP 60 days after the date on the letter.
It’s not free: An administrative fee is charged for TOP, which is deducted from the recovered amount sent to UIA.
If an employer is no longer in business: Submit a Notice of Change - Discontinuance of Business form through the Michigan Web Account Manager (MiWAM) or mail a Request to Change/Terminate Coverage (aka Notice of Change) and Form UIA 6385. When both are received, UIA staff will review the account.
The Michigan Unemployment Insurance Agency (UIA) has scheduled five virtual Employer Seminars in 2025. The seminars are sponsored by the Office of Employer Ombudsman, which is committed to making employers’ interactions with UIA positive while answering your questions about unemployment and tax issues.
Seminars will provide information about an employer’s unemployment insurance program obligations and explain how to use the Michigan Web Account Manager (MiWAM) for filing reports, paying taxes, participating in programs, and more. Attendees will also hear more about UIA’s planned new computer system, MiUI.
New Webpage Explains Step-by-Step Process of Employer Audits
Businesses chosen by the Michigan Unemployment Insurance Agency (UIA) for an employer field audit can learn more about the cooperative process at a new webpage that explains how to partner with UIA for a successful outcome.
Using plain language and clean design, the page on Michigan.gov/UIA walks users through the audit’s five-step process from notification of the audit to the post-audit letter with UIA’s findings.
Audits of Michigan employers help support the unemployment insurance (UI) tax program by verifying an employer is following the Michigan Employment Security Act (MES Act) and Administrative Rules.
There are three main purposes of an audit, which follow strict U.S. Department of Labor (USDOL) effective audit measures:
To ensure wages are properly reported by the employer to the UIA.
To determine whether workers are misclassified as employees or independent contractors and look for hidden or unreported wages.
To educate the employer community about how to comply with state and federal laws.
In 2024, UIA auditors conducted 2,927 employer audits, discovered 12,243 misclassified workers, and audited over $3 billion in wages.
UIA’s New Computer System Will Have Benefits for Employers
MiUI will replace the aging Michigan Web Account Manager (MiWAM) computer system employers and third-party administrators (TPAs) have been using for more than a decade.
The Michigan Unemployment Insurance Agency (UIA) has developed a comprehensive plan to communicate regularly with employers through various outreach methods, including the Michigan Employer Advisor newsletter, around the coming changes.
There are several benefits of the new system that you can look forward to with MiUI:
Replaces decade-old computer system.
Mobile-friendly.
Robust anti-fraud efforts.
New, plain-language forms.
Streamlines manual processes.
Offers updated filing capabilities for employer quarterly wage reporting.
Increases data accuracy.
Provides programming flexibility.
User-friendly design.
Automated reports and dashboards.
We Want to Hear from You
If you want to suggest an article or topic for a future edition of 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 find past issues of the newsletter on the Employer Homepage at Michigan.gov/UIA.
