Because this amount is a maximum, it’s also referred to as a wage limit. Unlike the SUTA tax rate, the same wage base applies to all employees in the state. Your state’s SUTA wage base is the amount of employee earnings that’s subject to SUTA tax. Instead, state unemployment offices or agencies assign employers a specific tax rate, and this rate can change based on annual evaluations. However, unlike FUTA tax, states do not apply the same SUTA tax rate across the board to all nonexempt employers. Similar to the Federal Unemployment Tax Act (FUTA) tax, the basic formula for calculating your SUTA tax looks like this: Texas, for example, uses a location of services checklist to determine which state a multi-state employer should report an employee’s wages. If you’re uncertain which state you should be paying SUTA tax to, check with the relevant state authorities. And the recent popularity of remote work can add to the complexity: For example, what if you have an employee who’s doing work for you in more than one state? But if you employ workers in more than one state-that is, if you’re a multi-state employer-you’ll need to submit SUTA taxes to each state in which your employees are located. If you have employees in only one state, you’ll only need to comply with that state’s SUTA tax regulations. What if You Have Employees in Multiple States? The state also exempts certain occupations or services.Įach state has its own SUTA exemption regulations, so you should check with your state’s labor or unemployment department or agency to learn more about any SUTA exemptions that might be relevant to your business. In some states, certain organizations (such as religious or charitable organizations) or certain types of employment or services (often referred to as exempt employment) may be exempt from SUTA tax.įor example, Washington state exempts nonprofit organizations, provided they meet specific legislative criteria, and are also tax-exempt 501(c)(3) organizations. ![]() ![]() However, employees in Alaska, New Jersey and Pennsylvania are also required to make SUTA contributions. In most states, employers are the only ones responsible for paying SUTA tax.
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