Michigan
Announces Implementation
of the Unemployment Insurance Solvency Tax
Michigan Unemployment Insurance Agency has
announced that beginning January 1, 2009 the Unemployment Insurance Solvency Tax will be implemented.
Background
The Michigan Employment Security Act requires that a solvency tax be
imposed if the balance in the Trust Fund is less than the total amount of
un-repaid federal loans. The Solvency
Tax is applied to negative balance employers only. Negative balance employers are employers who
have paid less in state unemployment taxes than the amount of benefits paid to
their former employees. The negative
balance employer must also have had to pay unemployment taxes
for five consecutive years.
Frequently asked questions
Who is affected?
You may be affected if you currently make UI
contributions in the State of Michigan or if you currently have a valid
Michigan - UIA Employer Number; and had
a negative balance in your experience account as of June 30 of the preceding
calendar year and have had to pay
unemployment taxes for five consecutive years.
When is the Solvency Tax effective?
The Solvency Tax will be effective January 1, 2009.
When should I set up the Solvency Tax in QuickPayroll?
You should set up your tax rates in QuickPayroll on
or after January 1, 2009.
How do I setup the Solvency Tax in QuickPayroll?
The Solvency Tax is in addition to the assigned
experience rate and shown as a separate line item on Form UIA 1771, Tax Rate
Determination for Calendar Year 2009, if applicable. The Solvency Tax rate will need to be included
in the total UI tax rate for 2009 when entered in QuickPayroll. Once you are ready to enter your UI tax rate
for 2009, take the following steps:
o
From
the Payroll Item List, select MI - Unemployment Company
o
Click Next to get to the Company tax rate screen
o
Enter the total Company rate, which includes
the Solvency Tax rate, in the Company
rate box
o
Continue
to click Next, and then click Finish
Who do I contact for more information on the Solvency Tax?
Employers may contact the Michigan UIA Employer
Customer Relations Hotline at (800) 638-3994 or send an email to TaxSupport@Michigan.gov.
