Background:

Missouri General Assembly House Bill 2041 allows for the establishment of an “unemployment automation fund.” The sole purpose of this fund is to create an automated system to improve the administration of the state’s unemployment insurance program.  Information pertaining to the Automation Surcharge can be found on the Agency’s website.  Here are some highlights of the tax:

• Tax Name: Automation Surcharge
• Effective: August 28, 2008 for tax years 2009, 2010, and 2011
• Employer Paid Tax
• Assessed Rate: 0.05% of employer's total taxable wages for the twelve-month period ending the preceding June 30th
• Employers unemployment insurance rate will be reduced by 0.05% for the whole tax year
• Employers will be assessed on their first quarter 2009 Form MODES-4-7, Quarterly Contribution and Wage Report
• Contributions to the Automation Surcharge will not be used for future rate calculations.

• NOT reportable to IRS Form 940 as contributions paid

As a result of these changes, the state has revised the Form MODES-4-7, Quarterly Contribution and Wage Report.  The 2009 Form MODES-4-7 will include a new line (Line 12) to report the Automation Surcharge tax amount due.

Frequently Asked Questions

How do I know if I'm affected?
You may be affected if you currently make unemployment insurance contributions in Missouri or currently have a valid Missouri Employer Account No.

When is the new Automation Surcharge tax effective?

The Missouri Automation Surcharge is effective August 28, 2008 for tax years 2009, 2010, and 2011.

When will I be informed that I will be subject to the Automation Surcharge?

The Missouri Department of Labor and Industrial Relations, Division of Employment Security began notifying employers on their unemployment insurance tax rate statements that were mailed to each employer in November 2008.

When will I be notified of the tax amount due for the Automation Surcharge?

You will be notified of the tax amount due for the Automation Surcharge on your 2009 pre-printed first quarter report, Form MODES-4-7, Quarterly Contribution and Wage Report, provided by the Department of Employment Security. 

Note: The Automation Surcharge will be assessed and due on your first quarter reports only.

When is Form MODES-4-7 and payment due?

Form MODES-4-7 along with your payment is due on or before the last day of the month following each calendar quarter - in this case April 30, 2009.

Will QuickPayroll support the new Automation Surcharge tax?

No. QuickPayroll will NOT be supporting this new tax. 

Since QuickPayroll is not supporting this new tax, what do I need to do to insure that my first quarter report is filed correctly?

The steps provided below will enable you to file and pay your Missouri quarterly taxes correctly.

Step 1: Set up a new payroll item.

1. From the List menu bar, select Payroll Items; click on the Payroll Item tab, click New.
2. On the Payroll item type slide, select the Other Tax radio button; then click Next.
3. On the Other tax slide, click on the drop-down list and choose User-Defined Tax; select the Tax is paid by the company radio button; then click Next.
4. On the Name used in paychecks and payroll reports slide, enter MO – Automation Surcharge; then click Next.
5. On the Agency for company-paid liability slide, enter Missouri Division of Employment Security in the Enter name of agency to which liability is paid field. If prompted with Liability Agency Not Found slide, click Quick Add.  Enter your Missouri Employer Account No. (Format: 999999-9-999-9999) in the Enter the number that identifies you to agency field; then click Next.
6. On the Tax tracking type slide, click on the drop-down list and choose None; then click Next.
7. Skip the Based on Quantity slide – do not select; then click Next. 
8. Skip the Default rate and limit slide – leave blank; then click Next.
9. Click Next and Finish.
10. Verify on the MO – Unemployment Company payroll item that Missouri Division of Employment Security has been entered on the Enter name of agency to which liability is paid field and your Missouri Employer Account No. (Format: 999999-9-999-9999) has been entered on the Enter the number that identifies you to agency field. 

Once you are ready to file and pay your 2009 first quarter reports, continue with Steps 2, 3, and 4.

Step 2: Prepare your Form MODES-4-7.  Your 2009 pre-printed first quarter Quarterly Contribution and Wage Report will provide the tax amount due for the Automation Surcharge on Line 12.   

Step 3: Create a payroll liability adjustment for the Automation Surcharge tax due amount.

• 1)    From the Activities menu bar, select Adjust Liabilities.
• 2)    In the Date field, enter today’s date.
• 3)    In the Effective Date field, enter today’s date.
• 4)    In the Adjustment is for field, click on the Company radio button.
• 5)    In the Taxes and Liabilities section, click on the Item Name field, click on the drop-down and select MO – Automation Surcharge.
• 6)    In the Amount field, enter the Automation Surcharge tax amount provided on your 2009 pre-printed first quarter report.
• 7)    In the Memo field, enter a memo reflecting the Automation Surcharge adjustment.
• 8)    Click OK.

Step 4: Create a liability check.

1. From the Activities menu bar, select Pay Liabilities/Taxes.
2. In the Payment Date field, enter the date to appear on your liability payment check.  
3. For the To be printed checkbox, indicate whether you plan to print your check (by checking the check box) or write it by hand (un-check the check box). 
4. In the Show liabilities as of window, choose the end date for which you want to pay payroll liabilities – in this case, 3/31/2009.
5. In the Sort By window, click on the drop-down and choose Payroll Item.
6. Select the liabilities you want to pay - in this case, select MO – Automation Surcharge and MO – Unemployment Company.
7. Choose whether to Create liability check without reviewing or to Review liability check to enter expenses/penalties.
8. Click Create.
9. If you selected Review liability check to enter expenses/penalties, review your checks and enter expenses/penalties; then click OK.
10. Print your payroll liability check (if you checked the check box as provided in Step 4 #3).  From the File menu, select Print Forms, select Print Liability Checks, select Missouri Division of Employment Security; click OK; then click Print.