Chapter 8 Unemployment Taxes - Essay Example

Fines and interests are common but they can be avoided by depositing the taxes when due, filing the 940 forms accurately and within the stipulated time and finally by ensuring that the checks issued during tax payments are valid. State Unemployment Tax (SUTA) is not deducted from the employee’s wages in most of the states. They are usually paid by the employers. They are paid on top of federal unemployment taxes owed by the employer. Most employers who pay state unemployment tax are required to pay Federal Unemployment tax that is included in Form 940.

It is deemed to be late by the federal government if submitted later than January 31 of the subsequent year. A state is said to be in a state of credit reduction if it has borrowed funds from the US federal government to help run the development activities but able to pay back the loan by the agreed time frame. Some states allow a voluntary contribution to reduce the state unemployment tax rate. Explain how this works and what does it accomplishes for the employer. How many states have this provision?

Is it always a savings? Why or why not? Do Missouri and Illinois allow voluntary contributions? Voluntary contribution is an alternative practiced by employers in an attempt to reduce their tax rate and maintain them low. They opt to voluntarily pay some or all of the benefits paid to former employees instead of paying them through an increased unemployment tax rate. It is practiced in 23 states in the US. Partial benefit payment is a departmental term that is used to describe unemployment composition of less than the weekly amount of benefit that is paid to the claimant.

Its sole purpose is to ensure that former employees still get some pay from their employers even after their employment has been terminated. The payments are made when the individual participates in odd jobs or subsidiary work that is not equal to the usual