State Unemployment Tax Act (SUTA)

Overview

Every state requires employers to pay state unemployment taxes. A business must register for unemployment tax identification in any state that they have employees and any state where their employees reside. Don’t waste your company time on state instructions and forms - Let LicenseLogix set up unemployment taxes for your new or growing business.

Background

Businesses must register under each State’s Unemployment Tax Act (SUTA) to obtain an identification number. Unemployment taxes are paid by an employer and are added to a fund that each employee can use in case they are unemployed. This type of fee can be referred to as SUTA, unemployment tax, or unemployment insurance. Every state is different in the way SUTA is applied. Depending on the state, a SUTA registration may be administered by either the state department of labor or state department of taxation.

Businesses must have the proper payroll tax accounts and ID’s established within a state where your business has employees. Locating the proper application to apply for the appropriate taxes can be complicated. The application process for each state’s payroll tax registration varies greatly. Some states, including California and New York, allow businesses to register for both withholding and unemployment tax using one application. The majority of states, however, require two separate applications to be submitted to separate governmental agencies in order to become properly registered as an employer.

Ramifications of Non-Compliance

Failing to register for unemployment insurance can lead to high fines and civil penalties. States are especially concerned about the growing practice of SUTA dumping. This is a form of tax evasion that involves the manipulation of an employer’s unemployment insurance tax rate to achieve a lower rate.

How we help your business:

  1. We streamline the overwhelming task of becoming properly licensed. Our licensing specialists will determine the necessary registrations, compile applications and make sure your business receives the license.
  2. We ensure your business is in full compliance by correctly setting up your payroll tax registration the first time.
  3. We save you money by allowing your employees to focus on your core business purpose. Let LicenseLogix focus on what we do best, getting your business licensed.

More Resources:

United States Department of Labor – State Unemployment Insurance Benefits
United States Department of Labor – Unemployment Insurance Tax


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