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Colorado Department of Labor and
Employment UNEMPLOYMENT INSURANCE HANDBOOK FOR EMPLOYERS (Revised 09/2007)
Bill Ritter, Jr., Governor
Donald J. Mares, Executive Director TABLE OF CONTENTS Unemployment Insurance Integrity, Tax Audits Office Locations and Contact Information Unemployment Insurance Program Contact Information Do Employees Pay Into The Unemployment Insurance Program? Who Must Pay Unemployment Insurance Taxes? Which Workers Are Covered For Unemployment Insurance Purposes? Which Workers Are Not Covered For Unemployment Insurance Purposes? Which Employees Are Legally Authorized To Work? Partial Listing Of Payments That Are Considered Wages For Unemployment Insurance Tax Purposes Partial Listing Of Payments That Are Not Considered Wages For Unemployment Insurance Tax Purposes To Which State Must A Multistate Worker Be Reported? Who Is An Employee And Not An Independent Contractor? What Is The Registration Process For An Unemployment Insurance Tax Account? What Happens When You Acquire Another Employer's Business? How Are The Quarterly Tax-And-Wage Reports Completed? How Are The Quarterly Tax-And-Wage Reports Filed? How Are Tax Payments Submitted? How Can More Employee Wage Information Than The Paper Wage Report Accommodates Be Reported? When Are Quarterly Tax-And-Wage Reports Filed? When Must A Final Report Be Filed? Can Previously Reported Quarterly Tax-And-Wage Reports Be Corrected? What Are The Important Dates To Remember? What Are The Penalty And Interest Assessments For Late Reports And Delinquent Taxes? How Are Payments Applied To Penalties, Interest, And Delinquent Taxes? How Can Costs Be Reduced Or Avoided? What Records Must Be Maintained? What Is A Tax Rate, And How Is It Determined? When Is A Solvency Tax Surcharge Assessed? Calculating Your Solvency Tax Surcharge Rate Solvency Tax Surcharge Tax-Rate Schedule Tax Rate Schedule--Positive Excess Employers Tax Rate Schedule--Negative Excess Employers Why Should A Voluntary Tax Payment Be Made? Can The Payment Of Unemployment Insurance Benefits Impact Your Tax Rate? When Will You Receive Your Tax Rate? Will A Tax-Rate Notice Be Sent If You Have Been Designated As A Reimbursable Employer? Qualifying For Seasonal Status Unemployment Insurance Tax Forms State Unemployment Tax Act Dumping What Are The Obligations For Federal Unemployment Tax? What Is Your Role In The Payment Of Unemployment Insurance Benefits? How Is A Decision Made On Whether To Pay Unemployment Insurance Benefits? How Are Unemployment Insurance Benefits Calculated? What Is A Combined-Wage Claim? How Does Other Remuneration Affect Unemployment Insurance Benefits? What Are The Decisions That A Claimant May Receive? Seasonal Employment's Affect On Unemployment Insurance Benefits What If You Have A Job For The Claimant? What If A Claimant Refuses Work? What Are The Requirements For A Claimant To Receive Unemployment Insurance Benefits? How Does Regular Part-Time Employment Affect Unemployment Insurance Benefits? Can A Worker Receive Unemployment Insurance Benefits And Work Part-Time? Notifying Workers About Unemployment Insurance Benefits When Processing An Unemployment Insurance Claim, How Is The Information You Provide Used? What If You Provide False Information Or Do Not Provide Requested Information? What If You Disagree With A Decision? What Happens If You Disagree With The Hearing-Officer's Decision? Appealing The Industrial Claim Appeals Office's Decision What Is Benefit Payment Control's Function? What Is Your Role In Overpayment Matters? What Is The Benefit Accuracy Measurement Program? What Does A Benefit Accuracy Measurement Review Include? How Are Cases Selected For Review? How Can You Contact The Benefit Accuracy Measurement Program? What Is The Workforce Development Program? What Is Labor Market Information? How Does Colorado Use Data From Labor Market Information? Do You Need To Complete The BLS-3020 Report? Must You Provide Workers' Compensation For Your Employees? This handbook provides information about your rights and responsibilities as a Colorado employer in regard to the Unemployment Insurance (UI) Program. The information contained in this handbook is intended to help you understand the requirements of the Colorado Employment Security Act (CESA) and how the UI Program functions to ensure CESA requirements are met. Reading this handbook may save you time, effort, and money. For example, if you:
UI is not a welfare program. It is temporary income to help workers who are unemployed through no fault of their own. When a UI claim is filed, the claimant’s social security number (SSN) and alien permit number, if applicable, are verified. Only U.S. citizens and certain aliens are eligible to receive UI benefits. UI benefits are paid only to unemployed workers who meet the entitlement and eligibility requirements defined in CESA. The following are a few important facts about the value of the UI Program to our economy.
UNEMPLOYMENT INSURANCE INTEGRITY, TAX AUDITS OFFICE LOCATIONS AND CONTACT INFORMATION Offices of the UI Integrity, Tax Audits branch are located throughout the state. UI tax auditors are assigned to each office to inform you about UI tax reporting requirements and processes for Colorado employers. Before visiting a Tax Audits office in your area, call to verify the location has not changed.
UNEMPLOYMENT INSURANCE PROGRAM CONTACT INFORMATION
This Web site provides information about the UI Program. This Web site provides information about One-Stop Career Centers, child-care providers, and transportation services.DO EMPLOYEES PAY INTO THE UNEMPLOYMENT INSURANCE PROGRAM? It is unlawful for any employer to require an employee to release or waive any rights to UI benefits or to require payment or repayment into a UI benefits fund. You can be prosecuted for pursuing such activities. WHO MUST PAY UNEMPLOYMENT INSURANCE TAXES? You are liable to pay UI taxes starting with the first payroll issued during the calendar year. This liability requirement also applies if your account is reinstated. According to CESA, you may be required to pay UI taxes if, as of January 1, 1999, you meet one or more of the following requirements:
WHICH WORKERS ARE COVERED FOR UNEMPLOYMENT INSURANCE PURPOSES? Generally, an individual who is paid wages and performs a service for you is considered to be in covered employment, and you are required to pay UI taxes. However, there are specific exemptions under CESA. (For more information, please refer to "Partial Listing of Payments That Are Considered Wages for Unemployment Insurance Tax Purposes.") In addition, FUTA 3306 (I) requires the following workers to be in covered employment:
WHICH WORKERS ARE NOT COVERED FOR UNEMPLOYMENT INSURANCE PURPOSES? Workers are not employees covered for UI tax purposes if they are:
WHICH EMPLOYEES ARE LEGALLY AUTHORIZED TO WORK? The Bureau of Citizenship and Naturalization Service authorizes alien registration cards in various types and formats. To verify the validity of alien documentation provided to you prior to hiring a perspective employee, contact the UI Operations alien desk at 303-318-9060. A legal alien, who becomes separated from a job through no fault of his or her own, has the right to file for and collect UI benefits as long as all eligibility requirements are met. The Systematic Alien Verification for Entitlements (SAVE) Program is a service for verifying an employee’s immigration status that is available through the Department of Homeland Security Immigration and Customs Enforcement. To register with the SAVE Program, go to https://www.vis-dhs.com/EmployerRegistration.PARTIAL LISTING OF PAYMENTS THAT ARE CONSIDERED WAGES FOR UNEMPLOYMENT INSURANCE TAX PURPOSES Following is a partial listing of payments included in the definition of wages for UI tax purposes. For a complete listing please refer to CESA online at www.coworkforce.com/UIT.
PARTIAL LISTING OF PAYMENTS THAT ARE NOT CONSIDERED WAGES FOR UNEMPLOYMENT INSURANCE TAX PURPOSES Following is a partial listing of payments that are not included in the definition of wages for UI tax purposes. For a complete listing, please refer to CESA online at www.coworkforce.com/UIT.
TO WHICH STATE MUST A MULTISTATE WORKER BE REPORTED? When an employee works in Colorado and in another state or states, the following criteria, in priority sequence, are used to determine whether his or her services are Colorado employment. Location An employee’s services are considered Colorado employment if all or most of the work is in Colorado, with incidental services performed out-of-state. Service is considered incidental if it is temporary, transitory, or consists of isolated transactions. Base of Operations A base of operations is the place from which the employee starts work and to which he or she usually returns to perform the terms of the contract with you. An individual is considered a Colorado employee if some of an employee’s services are performed in Colorado and the base of operations is in Colorado. Place of Direction and Control When part of an employee’s services are performed in Colorado and the place from which you exercise general direction and control over the employee is Colorado, he or she is considered a Colorado employee. Primary Residency If an employee performs some services in Colorado and resides in Colorado, he or she is considered a Colorado employee. Reciprocal Agreement If, after applying all of the above criteria, the employee’s service is found not to be subject to any one state law, you may elect to cover all of the employee’s service in one state, under a reciprocal agreement.Ordinarily, as the employer of a worker, you represent the organization for which the employee performs services. However, there are situations where you, as the recipient of the benefit of the worker’s services, are not considered to be the employer for Colorado UI tax purposes. Such situations include when an employee performs services through a temporary-help contracting firm or an employee-leasing company or provides services for an agricultural crew leader. There could also be situations where it is unclear who is employing a worker. WHAT IS AN EMPLOYEE-LEASING COMPANY, A TEMPORARY-HELP CONTRACTING FIRM, A WORK-SITE EMPLOYER, AND AN AGRICULTURAL CREW LEADER? A worker can have two employers for the same services when the worker is paid by a temporary-help contracting firm or an employee-leasing company but performs services for a work-site employer. The temporary-help contracting firm or employee-leasing company and the work-site employer are called coemployers. Employee-Leasing Company If your business or a portion of your business meets the following two conditions, you are considered to be an employee-leasing company.
The responsibilities of an employee-leasing company include:
Employees of your employee-leasing company must know of and consent to the staffing contract. UI Operations is authorized to require certification and documentation from an employee-leasing company and to conduct any necessary reviews to verify compliance. Temporary-Help Contracting Firm Short-term assignments, like those given to employees of temporary-help contracting firms, do not meet the definition of employee leasing. A portion of your temporary-help contracting firm’s business can be considered an employee-leasing activity if that portion of your business meets the two conditions under “Employee-Leasing Company” on page 9. Work-Site Employer If you are a work-site employer who contracts with a business that engages in employee-leasing activity without filing the reports or paying the taxes required by UI Operations, you become liable for the reports and taxes due for the employees who perform services for you. As a work-site employer, you are not liable when contracting for temporary help. Therefore, it is important for you to be aware of your potential liability for UI taxes when contracting for leased employees. Agricultural Crew Leader If a crew leader furnishes and pays workers to perform agricultural labor and if no one has been designated in writing as the employer, these workers are considered employees of the crew leader. WHO IS AN EMPLOYEE AND NOT AN INDEPENDENT CONTRACTOR? In an employer-employee relationship, how you refer to your employee does not matter. You may refer to the employee as a partner, coadventurer, subcontractor, agent, contract laborer, or independent contractor. How you measure payments to the employee, what you call the payments, or whether the individual is a full-time, part-time, or a temporary employee also make no difference in determining an employer-employee relationship and whether wages are being paid. Employers are sometimes confused about whether an individual is an employee or an independent contractor. Two major concepts used to determine who is an independent contractor are:
Factors That May Determine if You Have an Employer-Employee Relationship Several factors may be considered in determining the employer-employee relationship. The weight given to the factors is not always constant. The degree of importance may vary depending on the occupation being considered. All factors do not apply to every situation and the order in which the factors appear is not significant. A complete list of determining factors is impossible. The facts in each case determine who are employees and who are independent contractors. In order to make an accurate determination, Form UITA-9, Worker/Contractor Status Questionnaire (Firm), and Form UITA-9a, Worker/Contractor Status Questionnaire (Worker), must be submitted to UI Operations. Based on these forms and information obtained from the workers and the business, an official ruling is made as to whether an individual is an employee or an independent contractor. Following are some of the factors that are considered in determining an employer-employee relationship: Instructions A person who is required to comply with instructions about when, where, and how to work is ordinarily an employee. Some employees may work without receiving instructions because they are highly proficient in their line of work and can be trusted to work to the best of their abilities. However, the control factor is present if you have the right to instruct. The instructions may be verbal or written procedures that show how the desired result is to be accomplished. Training A person who is trained by an experienced employee, by correspondence, by required attendance at meetings, or other methods is not free from control because the training is an indication that you want the services performed in a particular method or manner. This is especially true if the training is given periodically or at frequent intervals. An independent contractor ordinarily uses his or her own methods and receives no training from the purchaser of services. Integration of Services Integration of another person’s services into the business operations generally shows that the person is subject to direction and control. In determining whether integration exists, the scope and function of the business are identified and then a determination is made as to whether the services of the individual are merged into the business operations. When the success or continuation of a business depends upon the performance of certain kinds of services, the workers who perform those services may be subject to a certain amount of control by the owner of the business. Personal Services If you require that a worker personally render a service, you are interested in the methods and the results. You are interested not only in getting a desired result but also in who does the job. Lack of control may be indicated when an individual has the right to hire a substitute without your knowledge or permission. Assistants If you hire, supervise, and pay assistants, you generally have control over all persons on the job. Sometimes one worker may hire, supervise, and pay other individuals. This worker may hire others as the result of a contract in which the worker agrees to provide materials and labor and accepts the responsibility only for the attainment of a result. In this case, the hiring worker may be an independent contractor. On the other hand, if that person hires, supervises, and pays assistants at your direction, the hiring worker may be acting as your employee in the capacity of a supervisor or representative. Continuing Services The existence of a continuing relationship between an individual and the person for whom the services are performed is a factor indicating the existence of an employer-employee relationship. Continuing services may include work performed at frequent, recurring intervals, either on call or whenever the work is available. If the arrangement requires continuing or recurring work, the relationship is considered permanent. It makes no difference if the services are rendered on a part-time basis, are seasonal in nature, or are only for a short period of time. Set Hours The establishment of set hours of work by you is a factor indicative of control. When you set the hours of work, you prevent the worker from controlling his or her own time, which is a right of an independent contractor. Even when fixed hours are not practical because of the nature of the occupation, a requirement that the individual work at certain times is an indication of control. Full-Time Services If a worker must devote full-time services to your business, you have control over how much time is spent working. An independent contractor, on the other hand, is free to work when and for whom he or she chooses. Full-time employment does not necessarily mean an 8-hour day or a 5-day week. The meaning may vary with the intent of the parties or the nature of the occupation. These conditions should be considered in defining “full time." Full-time services may be required even if a full-time schedule is not specified verbally or in writing. For example, workers may be required to produce a minimum volume of business, which compels them to devote all of their working time to that business. Location of Services Work that is completed on your premises does not, by itself, demonstrate control. However, it does imply that you have control, especially if the work could be done elsewhere. A person working in your place of business is physically within your direction and supervision. The use of desk space, a telephone, and clerical services provided by you places the worker within your direction and supervision. The fact that work is done off the premises does indicate some freedom from control. However, it does not, by itself, mean that the worker is not an employee. In some occupations, it is necessary for services to be away from your premises. This is true for employees of construction contractors. Set Order of Services If a worker must perform services in an order or sequence set by you, it shows that the worker may be subject to your control. This person is not free to follow his or her own patterns of work but must follow your established routines and schedules. Often, because of the nature of an occupation, you may not set the order of the services. However, if you retain the right to do so, control is demonstrated. Reports Control is demonstrated if the worker is compelled to account for his or her actions by verbal or written reports submitted to you. Payment for Services An employee is usually paid by the hour, week, or month. Independent contractors are paid a lump sum agreed upon for the total job. The guarantee of a minimum salary or the granting of a drawing account at stated intervals with no requirement for repayment of the excess over earnings tends to indicate the existence of an employer-employee relationship. Expenses Your payments for the worker’s business or traveling expense are a factor indicating control over the worker. Conversely, a lack of control is demonstrated when the worker is paid for an entire job and must take care of all incidental expenses. Tools and Materials If you furnish tools and materials, this is indicative of control over the worker. If the worker furnishes the tools and materials, it indicates a lack of control. However, consideration must be given to the fact that in some occupational fields it is customary for employees to use their own hand tools. Investment A person who invests a significant amount of money into the facilities used to perform services for another tends to show an independent status. On the other hand, if you furnish all of the necessary facilities, this indicates the absence of a worker’s independent status. Facilities include equipment necessary for the work, but not the tools, instruments, clothing, etc., that are provided by employees as a common practice in their particular trade. Profit or Loss A person who can realize a profit or suffer a loss because of his or her services is generally an independent contractor; one who cannot realize a profit or suffer a loss is, in general, an employee. One or more of a variety of circumstances may establish opportunity for profit or loss. For example, the individual is subject to profit and loss if he or she:
Multiple Independent Services A person who works for a number of persons or firms at the same time can have an independent status if the worker is free from control by any of the firms. However, it is possible that a person may work for a number of people or firms and still be an employee of one or more of them. Offer of Services to General Public The fact that a person makes services available to the general public is usually an indication that he or she is an independent contractor. An individual may offer services to the public in a number of ways. The individual may have his or her own office and assistant; hang out a shingle in front of the home or office; hold business licenses; be listed in business directories or maintain business listings in telephone directories; or advertise in newspapers, trade journals, or magazines. Discharge Without Liability The right to discharge is an important factor in indicating that you are a worker’s employer. An independent contractor cannot be fired as long as he or she produces a result that measures up to the contract specifications. On the other hand, your right to discharge can be restricted because of a contract with a labor union. Such a restriction does not detract from the existence of an employer-employee relationship. Quit Without Liability An employee has the right to end the relationship with you at any time without incurring liability for breach of contract. An independent contractor usually agrees to complete a specific job, is responsible for its satisfactory completion, or is legally obligated to make good for failure to complete the job.
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WHAT IS THE REGISTRATION PROCESS FOR AN UNEMPLOYMENT INSURANCE
TAX ACCOUNT?
Whether you use the online-registration process or the
paper-registration process (completing and submitting Form CR
0100, Colorado Business Registration) to register your business
for a UI tax account, please provide your federal employer
identification number (FEIN) in the appropriate space. UI
Operations uses your FEIN to provide UI tax information to the
Internal Revenue Service, which in turn will facilitate your
filing of Form 940, Employer’s Annual Federal Unemployment Tax
Return, each year. (For more information, please refer to “What
Are The Obligations For Federal Unemployment Tax?” .)
Online Registration
At the Colorado Department of Labor and Employment (CDLE) Web
site, www.coloradoworkforce.com, click on the E-Services link.
Then select New Business Registration. You may then complete the
Colorado Business Registration online if: Paper Registration If you are not eligible for online registration, you can access
the Colorado Business Registration by visiting the CDLE Web
site, www.coloradoworkforce.com, and clicking on UI Business
Forms listed under “Unemployment Insurance Tax.” Here you may
download and print the form. Once you have completed the
Colorado Business Registration, mail it to UI Operations at P.O.
Box 8789, Denver, CO 80201-8789. You may also request that the Colorado Business Registration be
mailed to you by calling or e-mailing the Customer Contact
Center. WHAT HAPPENS WHEN YOU ACQUIRE ANOTHER EMPLOYER’S BUSINESS? Under most circumstances, you (the successor) become liable for
the previous employer’s (the predecessor’s) UI tax debt. In
addition, you receive the benefit claim forms for services
performed for the predecessor. You must complete Form UITL-67, Business-Acquisition
Questionnaire, and the Colorado Business Registration, to
register your business. The following information describes the various types of
acquisitions and their impacts to you as the successor. Total Acquisition When you acquire 100 percent (1.00) of an existing business, the
experience-rating record of the predecessor, including the
actual taxes, benefits, and payroll experience, passes to you.
You, as the successor, must complete and submit the
Business-Acquisition Questionnaire. The predecessor is
responsible for notifying UI Operations of your acquisition of
the business by completing Form UITL-2, Employer Change Request. Partial Acquisition When you acquire a portion of an existing business or a
segregable unit (90 percent [0.90] or more of the total number
of employees in covered employment for each of the four pay
periods immediately preceding the transfer to you), the
experience rating record of the predecessor, including the
actual taxes, experience, and payroll experience passes to you.
A segregable unit is “a unit of a business which has operated as
a separate entity for 12 calendar quarters immediately preceding
the computation date (June 30) and has kept continuous, separate
records of workers’ wages, taxes paid, and benefits charged.” When you acquire a clearly segregated unit, you and the previous
owner of the segregated unit may jointly request a transfer of
experience by filing Form UITR-14, Application for Partial
Transfer of Experience, within 60 days of the mailing date on
the notice of employer liability that is mailed to you. A
transfer of experience is “the proportional share of the
experience-rating record of the predecessor, including the
actual taxes, benefits, and payroll experience that is
transferred to you as the successor.” HOW ARE THE QUARTERLY TAX-AND-WAGE REPORTS COMPLETED? You must complete all items on Form UITR-1, Unemployment
Insurance Tax Report (UI Tax Report), and Form UITR-1a,
Unemployment Insurance Report of Workers Wages (UI Report of
Workers Wages). The UI Tax Report and the UI Report of Workers
Wages must include: The original tax-and-wage reports sent to you by UI Operations
must be returned to ensure that reports are processed timely and
accurately. Do not return photocopies or unauthorized
replications of the tax-and-wage reports to UI Operations for
processing. The data on the documents are scanned by an optical
character reader; photocopies or unauthorized, replicated forms
may not scan accurately. An incomplete or incorrect report may be considered a delinquent
report and subject to the same penalties that are incurred if
you fail to submit a report. When reporting monetary amounts, enter cents (including zeros)
in the appropriate columns. Do not use punctuation, including
dollar signs, periods, or commas. Other account numbers, such as the Department of Revenue number,
are not used for UI reporting purposes. When a credit or debit amount exists on your account, the credit
or debit amount is printed on the UI Tax Report. A credit
showing on your UI Tax Report must be subtracted from your
current balance; a debit must be added to your balance. You pay
the new amount due. NOTE: Refunds are issued to inactive employers. Inactive
employers are provided with refund information via Form UITR-66,
Request for Refund of Credit Balance. Unemployment Insurance Tax Report The monthly employment data reported is a count of all full-time
and part-time workers in covered employment (as defined in CESA)
who worked during the payroll period that includes the 12th of
the month. If there is no employment in the payroll period,
enter “0” (zero) into the boxes that designate the number of
employees for each month in the payroll period. Also enter zeros
into the dollars and cents fields that designate wage
information for the payroll period. The following are explanations of items you must understand to
correctly compute your taxes on the UI Tax Report: Computing Excess Wages UI taxes must be paid on the first $10,000 in total Colorado
gross taxable wages paid to each employee during each calendar
year. Wages that an employee earns in a calendar year beyond the
first $10,000 are excess wages and are not taxed. The following example shows how to compute wages in excess of
$10,000. The computation of excess wages is for an individual
earning $7,500 per quarter for the calendar year. Unemployment Insurance Wage Report In addition to providing your business name, unemployment
identification number, and the quarter and year being reported,
the UI Report of Workers Wages must contain the following
information for each employee you are reporting: The last line item on the UI Report of Workers Wages requires
the sum of all the total Colorado gross taxable wages paid this
quarter. The total of all employees’ wages must match the total
amount entered in Item 9 on the UI Tax Report. List total gross
taxable wages (not total taxable wages). NOTE: If you are submitting more than one page of the UI Report
of Workers Wages, enter the total of all pages in Item 9 of the
UI Tax Report. (For more information, please refer to “How Can
More Employee Wage Information Than the Paper Wage Report
Accommodates Be Reported?” .) HOW ARE THE QUARTERLY TAX-AND-WAGE REPORTS FILED? Online Filing CDLE’s Web site at www.coworkforce.com offers an alternative to
paper filing; click on File Your UI Tax/Wage Report in the left
column. The Web site provides detailed instructions for filing
tax-and-wage reports online. The online application offers the
following advantages to filing by paper: File Transfer Protocol File transfer protocol (FTP) is another convenient method for
the electronic transfer of UI wage information. FTP allows the
electronic transmission of wage information via a secured link
between your computer and the UI computer system. For more
information and assistance with filing wage reports via FTP,
call or e-mail the Customer Contact Center. Paper Filing Use the Tax-and-Wage Reports Mailed to You You receive the UI Tax Report and the UI Report of Workers Wages
during the third month of each quarter. The tax-and-wage reports generated for you by UI Operations
contain accounting information associated with your specific
account for the quarter and year for which it is generated. Your
tax-and-wage reports also contain data that is scanned and is
unique to that document. The scanning process relies on this
data being maintained with consistency and integrity. Do Not Replicate Tax and/or Wage Reports You may not duplicate or recreate the tax and/or wage reports in
any manner without obtaining approval from UI Operations. The
approval process involves extensive testing of your replicated
forms to ensure that they can be scanned and processed by the UI
Operations’ computer system. To get more information about
replication of tax and/or wage reports, visit the CDLE Web site
at www.coworkforce.com and click on File Your UI Tax/Wage
Report. HOW ARE TAX PAYMENTS SUBMITTED? Online Filing When you submit your tax report online, a printable payment form
is generated. Mail your payment with the payment form. Paper Filing A return envelope is provided with the UI tax-and-wage reports
that are mailed to you. Mail your payment with your tax-and-wage
reports. HOW CAN MORE EMPLOYEE WAGE INFORMATION THAN THE PAPER WAGE
REPORT ACCOMMODATES BE REPORTED? The UI Report of Workers Wages allows you to list up to 14
employees. If you need to report more employees than the form
accommodates, you have three options: WHEN ARE QUARTERLY TAX-AND-WAGE REPORTS AND TAXES DUE? Each quarter you are required to file the UI Tax Report and the
UI Report of Workers Wages. UI Operations mails these forms
during the third month of each quarter to all active employers. Reports are to be filed and payments are to be made according to
the following schedule. If the due date falls on a Saturday, Sunday, or legal holiday,
the report and its payment must be postmarked on or by the next
working day to be considered on time. You must file the UI Tax Report and the UI Report of Workers
Wages on time each quarter even if taxes are not owed, wages
have not been paid during the quarter (no UI Report of Workers
Wages is required), or you are a reimbursable employer. WHEN MUST A FINAL REPORT BE FILED? If you no longer employ covered workers, are no longer in
business, or have sold your business, you are required to file
final reports and make final payments by the end of the
reporting quarter during in which the change occurred. You must
also complete and submit the Employer Change Request. CAN PREVIOUSLY REPORTED QUARTERLY TAX-AND-WAGE REPORTS BE
CORRECTED? Form UITR-3, Unemployment Insurance Tax Report Adjustment (UI
Tax Report Adjustment), Form UITR-6a, Adjustment of Workers
Wages for Multiple Quarters (Multiple Quarter Adjustment), and
Form UITR-6c, Social Security Number (SSN) Corrections, are used
to adjust information that was previously submitted on the UI
Tax Report and/or the UI Report of Workers Wages. The UI Tax Report Adjustment, Multiple Quarter Adjustment, and
SSN Corrections can be obtained by visiting
www.coworkforce.com
and clicking on UI Business Forms in the left column; by
contacting UI Operations at P.O. Box 8789, Denver, CO
80201-8789; or by calling or e-mailing the Customer Contact
Center. Corrections to wage information submitted via FTP can be made by
resubmitting the information. The newly uploaded file overwrites
the previously uploaded file. WHAT ARE THE IMPORTANT DATES TO REMEMBER? January 31 is the last day you can voluntarily elect to have
your employees covered under CESA for the preceding year. March 14 is the deadline to submit a voluntary-tax payment to
lower the tax rate for that particular year. On June 30 of each year, employers with delinquent taxes have a
penalty computed equal to the taxes due or 1 percent (0.010) of
the taxable wages in the previous calendar year, whichever is
less. In compliance with CESA 8-79-104 (1)(c), this penalty is
payable in four quarterly payments during the current calendar
year. You have 15 calendar days after the mailing date of Form UITR-7,
Notice of Employer’s Tax Rate, to request a redetermination of
the tax rate for the current year. You have 20 calendar days after the mailing date of Form UIB-6,
Notice of Decision, to appeal a determination regarding the
payment of UI benefits. UI Appeals must receive your written
appeal within 20 calendar days after the date the UI Program
mailed the decision. You have 12 calendar days after the mailing date of the Request
for Job-Separation Information to complete and return this form.
The UI Program must receive the completed Request for
Job-Separation Information within 12 calendar days after the
date the UI Program mailed the form to you. (For more
information, please refer to “Timely Return of Form UIB-290,
Request for Job-Separation Information” on page 34 and “UIB-290,
Request for Job-Separation Information” on page 41.) You have 60 calendar days after the mailing date of Form UIA-20,
Statement of Benefit Charges, to submit a protest regarding any
charges/credits issued to your account. Prompt notification of address changes helps to ensure you
receive important forms and information regarding UI taxes and
benefits in a timely manner. Online Address Change Go to www.coloradoworkforce.com, and click on
Employer-Change-of-Business-Address in the left column. The
online address-change application allows you to change one or
more of the addresses you use for UI tax and benefits purposes.
Paper Address Change Paper address changes must be made by completing and submitting
the Employer Change Request. You can download or request a paper
copy of this form at www.coloradoworkforce.com; click on UI
Business Forms in the left column. You can also request a paper copy of this form by calling or
e-mailing the Customer Contact Center. WHAT ARE THE PENALTY AND INTEREST ASSESSMENTS FOR LATE REPORTS
AND DELINQUENT TAXES? To avoid penalty and interest charges, the UI Tax Report, the UI
Report of Workers Wages, and proper payment must be submitted or
postmarked on or before the due date. (For more information on
due dates, please refer to “When Are Quarterly Tax-and-Wage
Reports and Taxes Due?” on page 18.) If the due date falls on a
Saturday, Sunday, or legal holiday, your reports and payment
must be postmarked on or before the next working day. Electronic
filing must be completed on or before the due date; no grace
period is granted for electronic filing. Penalty Assessments Delinquent Reports You are assessed a $50 penalty for each quarter that your UI Tax
Report and UI Report of Workers Wages are delinquent. If you are
a newly subject employer, the penalty is $10 for each occurrence
during the first four quarters of coverage. If you are late in
filing the UI Tax Report and the UI Report of Workers Wages,
enter the appropriate penalty amount, including dollars and
cents, in Item 14 of the UI Tax Report. Use zeros to designate
no dollars and/or no cents. Delinquent Taxes If you owe delinquent taxes as of the computation date (June
30), you are assessed a delinquent-tax penalty equal to the
amount of delinquent taxes or 1 percent (0.01) of the taxable
payroll, whichever is less. This penalty is billed and payable
in four quarterly installments during the following calendar
year. To avoid assessment of the delinquent-tax penalty, you
must pay all delinquent taxes by June 30 each year. Form UITR-2, Unemployment Insurance Tax Statement (Tax
Statement), serves as the only notice and demand for payment
regarding delinquent benefit charges or tax, interest, and/or
penalties. The “Reporting Time Table” on the reverse side of the
Tax Statement provides specific details about paying your taxes
timely. If you are assessed a delinquent-tax penalty, you will receive
Form UITR-37, Unemployment Insurance Delinquent Tax Penalty
Statement, which provides you with the information used to
calculate your delinquent-tax penalty. You must submit the
entire amount due or the first of your four quarterly
installment payments along with a signed copy of the statement.
Interest accrues on this penalty at the rate of 1.5 percent
(0.015) per month. Interest Assessments Interest is charged at a rate of 1.5 percent (0.015) per month
or any portion of a month on delinquent taxes and penalties. To
avoid an interest charge for the next month, full payment must
be received by the 28th day of the current month. If you are
delinquent in the payment of taxes, you must enter the
appropriate interest amount, including dollars and cents, in
Item 13 on the UI Tax Report. Use zeros to designate no dollars
and/or no cents. HOW ARE PAYMENTS APPLIED TO PENALTIES, INTEREST, AND DELINQUENT
TAXES? If payment is received with a tax report, payment is applied to
any penalty, then interest, and then tax due for the
accompanying tax report. Any monies remaining are applied in the
sequence described below. Payments are first applied to the oldest quarter of delinquency
and then to the following quarters until all penalties,
interest, and taxes are paid or the payment is depleted. For
each quarter, payment is applied as follows: HOW CAN COSTS BE REDUCED OR AVOIDED? To reduce or avoid costs: Tax auditors from the UI Program routinely examine employer
books and records pertaining to the business. These audits,
which occur at your work site, entail a detailed examination of
all your records. A complete payroll audit involves an
examination of subsidiary records, including the examination of
cash-disbursement records of money paid to workers for services
performed that you did not classify as employment or wages. CESA
requires that all of your records the UI Program determines to
be necessary in its administration of CESA must be open for
inspection at any reasonable time and as often as necessary. WHAT RECORDS MUST BE MAINTAINED? You are required to keep business records for at least 5 years.
For each payroll period, your records must show: Your records must show the name, state of residence, and SSN for
each worker. You must require all new workers to provide: -or- For each employee, your records must show: If an employee who normally works full-time works less than
full-time hours during any payroll period, your records must
show: • The amount of time lost. • The reason for the time lost, including not being available
for work. If there is more than one reason, the amount of time
lost is recorded for each reason. WHAT IS A TAX RATE, AND HOW IS IT DETERMINED? Each year, UI Operations is required to notify you of your UI
tax rate. Following are the types of rates that may be assigned
to you depending on the status of your business. (For more
information, please refer to the various rate codes in the
“Glossary” .) Standard Rate Effective July 1, 1997, if you are an employer newly subject to
pay UI taxes, you are assigned a standard rate of 1.7 percent
(0.017) or a computed rate, whichever is higher. Standard Industry Rate Effective January 1, 2002, if you are an employer in the
construction industry who is newly subject to UI tax, you are
assigned an industrial tax rate based on the 3-digit industry
code (236, 237, 238) found in the North American Industry
Classification Code manual. Businesses in the construction
industry are subject to a higher initial tax rate because the
industry is subject to more periods of unemployment due to
factors such as inclement weather. Experience Rating When you become an experience-rated employer, your tax rate is
affected by your account history and you are assigned a computed
rate. If you pay more taxes into your account than you have
benefits charged, the result is a low tax rate. However, if you
have more benefits charged to your account than you paid in
taxes, the result is a high tax rate. Computed Rate A computed rate is based on a formula using the activity on the
employer’s account, which includes length of time as a taxable
employer; taxable payroll reported; taxes paid into the UI Trust
Fund; and benefits charged to the employer and paid out of the
UI Trust Fund. An employer does not receive a computed rate
until the employer has been benefit chargeable for four quarters
(the last four of five previously completed quarters) prior to
the June 30 computation date for UI tax rates. Employers in the
construction industry must file tax-and-wage reports for 36
months prior to the July 1 computation date before qualifying
for a computed tax rate. Once an employer meets the requirements
to receive a computed rate, a computed rate is assigned. The
computed rate replaces the previously assigned standard rate as
the employer’s base rate. A percentage of excess is used to determine an employer’s
computed tax rate. Employers who have paid in more UI taxes to
the UI Trust Fund and have paid out less in UI benefits are
assigned a positive percent of excess. Employers who have paid
in fewer taxes to the UI Trust Fund and have paid out more in UI
benefits are assigned a negative percent of excess. Employers
with a positive percent of excess are assigned a lower computed
tax rate, while employers with a negative percent of excess are
assigned a higher computed tax rate. NOTE: The percent of excess is computed by subtracting the
benefits charged to an employer account from the taxes paid to
that account and dividing the result by the average annual
taxable payroll. The percentage is computed to the nearest one
percent. Tax Surcharge A tax surcharge is added to all standard tax rates and some
computed tax rates. The tax surcharge supports administrative
costs. In addition, the tax surcharge supports a general pool
fund used to pay UI benefits not directly charged to an
employer. For example, when a full award is granted to pay UI
benefits on a job separation that meets the criteria under CESA
for domestic abuse, the employer account is not charged for UI
benefits paid on the claim. Instead, paid UI benefits are
charged to the general pool fund. A tax surcharge is not assessed on employers who have had less
than a total of $100 charged to their accounts from UI benefits
paid out in the last three state fiscal years prior to the July
1 tax-rate computation date. Per CESA 8-76-102 (4)(d), the tax surcharge rate is 0.22 percent
(0.0022). WHEN IS A SOLVENCY TAX SURCHARGE ASSESSED? In accordance with the Colorado Employment Security Act 8-76-102
(5)(a), a solvency tax surcharge (STS) is assessed when the UI
Trust Fund balance, as of June 30 of any year, is equal to or
less than nine-tenths of one percent (0.009) of the total wages
reported by ratable employers for the calendar year or the most
recent available four consecutive quarters prior to the last
computation date (June 30). An STS ensures the ability of the UI
Program to pay UI benefits. This STS is added to all ratable
employers’ standard, standard industry, or computed tax rates,
beginning with the next calendar year. This surcharge can never
exceed the limit on solvency tax defined in the “Solvency Tax
Surcharge Tax-Rate Schedule” on page 26. The surcharge is not
assessed if you are a state agency, political subdivision, or
nonprofit organization, as described in IRC 401 (a), 501 (a),
and 501 (c)(3) and you have elected the reimbursement method of
payment. The STS is increased by the established yearly increments shown
in the “Solvency Tax Surcharge Tax-Rate Schedule” on page 26.
The yearly increments continue until the limit on the solvency
tax is reached or until the UI Trust Fund balance is greater
than nine-tenths of one percent (0.009) of the total wages
reported by ratable employers for the calendar year or the most
recent available four consecutive quarters prior to the last
computation date (June 30). When an STS is assessed for the current rate year, information
is available on the UI Tax Web site at
http://www.coworkforce.com/UIT/STS/default.asp.
CALCULATING YOUR SOLVENCY TAX SURCHARGE RATE To calculate your STS rate for a given year, add the STS yearly
increment for that year, which is based on your percent of
excess, to your STS rate for the previous year. NOTE: In accordance with House Bill 05-1208, the STS adjustment
was in effect for calendar year 2006 only. In the example above,
the 2006 yearly increment of .006 was credited back to the
employer. *The maximum STS for percent of excess +1 is .020. In the scenario above, this account’s STS for 2007 of .019 plus
the 2008 STS increment of .004 equals .023. This is in excess of
the maximum limit for the percent of excess +1 (see the Solvency
Tax Surcharge Tax-Rate Schedule on page 26). Therefore, this
employer’s STS for 2008 is the maximum STS limit of .020. Examples of Solvency Tax Surcharge Calculations For a standard new employer with liability date of 02/01/2006: This account requires 12 months of chargeability as of
06/30/2007 for a computed rate in rate year 2008. *Employers whose initial increment is in 2006 are not eligible
for the STS Incremental Adjustment. House Bill 05-1208 specifies
that only those employers who see an incremental increase to the
previous year’s STS rate are eligible. **The maximum STS for percent of excess +3 is .013. For a standard new employer with liability date of 01/01/2007: This account needs 12 months of chargeability to achieve a
computed STS. The account will achieve this requirement as of
the 06/30/2008 computation date for the 2009 rate year. In this
scenario, rate year 2007 and rate year 2008 will receive the
standard STS. For a construction-industry new employer with a liability date
of 03/31/2005: This account requires 36 months of benefit chargeability to
achieve a computed STS. The account will achieve this
requirement as of the 06/30/2008 computation date for the 2009
rate year. For a construction-industry new employer with a liability date
of 01/31/2004: This account requires 36 months of benefit chargeability to
achieve a computed STS. The account will achieve this
requirement as of the 06/30/2007 computation date for the 2008
rate year. SOLVENCY TAX SURCHARGE TAX-RATE
SCHEDULE TAX RATE SCHEDULE−POSITIVE
EXCESS EMPLOYERS TAX RATE SCHEDULE−NEGATIVE
EXCESS EMPLOYERS WHY SHOULD A VOLUNTARY TAX PAYMENT BE MADE? You may lower your base tax rate for a particular calendar year
by making a voluntary tax payment. However, you are eligible to
make a voluntary tax payment only if you have been assigned a
computed rate (rate code 1). This payment must be postmarked on
or before March 14 to qualify for a rate reduction for that
year. Voluntary tax payments are first applied to any penalty,
then to interest, and then to delinquent taxes on your account.
A Notice of Employer’s Tax Rate is mailed to you at the end of
the calendar year. Form UITR-7a, Voluntary-Tax-Payment
Instructions, is enclosed if you have been assigned a computed
rate (rate code 1). For additional information or help in
computing the amount of a voluntary tax payment, call the
Customer Contact Center. CAN THE PAYMENT OF UNEMPLOYMENT INSURANCE BENEFITS IMPACT YOUR
TAX RATE? The payment of UI benefits can impact your tax rate. UI
Operations notifies you of the potential charge to your account
on Form UIF-290, Notice of Unemployment Insurance Claim, Wages
Reported, and Potential Charges. The potential charge is
approximately one-third of the wages the claimant earned during
the base period of the claim. The base period is the first four
of the last five completed calendar quarters preceding the date
the claim is filed. The wages earned by the claimant during the
base period are used to determine the weekly benefit amount
(WBA) and the maximum benefit amount (MBA) payable. You can estimate the potential effect on your tax rate by adding
the potential charge to any benefits previously charged to your
account and then recalculating the rate. However, the fund
balance may change on the next computation date (June 30). The
potential rate computed is based on the last available fund
balance. NOTE: The rate computation formula is: base rate + tax surcharge
(when applicable) + solvency tax surcharge (when applicable) =
combined rate. WHEN WILL YOU RECEIVE YOUR TAX RATE? Active employers are notified annually of their UI tax rate on
the Notice of Employer’s Tax Rate. The Notice of Employer’s Tax
Rate shows your account number, accumulated taxes paid,
accumulated benefits charged, average annual taxable payroll,
percent of excess, and the combined tax rate. If you find errors
on the Notice of Employer’s Tax Rate, you must notify UI
Operations in writing within 15 calendar days of the date on the
notice. WILL A TAX-RATE NOTICE BE SENT IF YOU HAVE BEEN DESIGNATED AS A
REIMBURSABLE EMPLOYER? If you are a nonprofit organization, as described in federal IRC
501 (c)(3), or you are a political subdivision and you are
designated as a reimbursable employer, you will not receive a
Notice of Employer’s Tax Rate. NOTE: If you are not a tax-paying employer, Item 12 of the UI
Tax Report, shows 0.0000 as your tax rate. QUALIFYING FOR SEASONAL STATUS To qualify for seasonal status, your business must operate for
less than 181 days during a calendar year or must have seasonal
occupations for which you employ workers for less than 181 days
during a calendar year. Once UI Operations grants you seasonal status, your employees
cannot draw UI benefits based on wage credits earned during the
determined season unless they are unemployed during the season. To request seasonal status, you must complete and submit Form
UITL-5, Request for Seasonal Determination. You can download
this form at www.coloradoworkforce.com; click on UI Business
Forms in the left column. You can also request a paper copy of
this form by calling or e-mailing the Customer Contact Center. Employers with seasonal status must report wages earned during
the applicable season and pay UI taxes accordingly. UNEMPLOYMENT INSURANCE TAX FORMS You can download or request copies of most of the forms
described below by going to www.coworkforce.com and clicking on
UI Business Forms in the left column. You can request copies of
any of the forms by calling or e-mailing the Customer Contact
Center. Forms All Employers Must Complete and Submit Form CR 0100, Colorado Business Registration You must complete and submit the Colorado Business Registration
or register your business online if you have one or more
employees in Colorado. You are required to register your
business with the Colorado Department of Revenue and CDLE
immediately after starting a business that has employees who
work in Colorado. (For more information, please refer to “What
Is the Registration Process for an Unemployment Insurance Tax
Account?” .) Form UITR-1, Unemployment Insurance Tax Report (UI Tax Report),
and Form UITR-1a, Unemployment Insurance Report of Workers Wages
(UI Report of Workers Wages) The UI Tax Report and the UI Report of Workers Wages are mailed
to you on a quarterly basis if you were an active employer
during the reporting quarter. You must complete and submit these
forms or file your tax-and-wage reports online each quarter.
Filing these reports serves two purposes. On the UI Tax Report,
you provide total Colorado gross taxable wages paid this
quarter, taxable wages, and excess wages used to calculate the
total tax amount due for the quarter. On the UI Report of
Workers Wages, you provide detailed employee information (for
example, SSN, name, and total Colorado gross taxable wages paid
this quarter) that is used in the event a claim for UI benefits
is filed. (For more information, refer to “How Are the Quarterly
Tax-and-Wage Reports Completed?” and “How Are the
Quarterly Tax-and-Wage Reports Filed?” .) Other Forms Form UITR-7, Notice of Employer’s Tax Rate The Notice of Employer’s Tax Rate is mailed annually to all
active, tax-paying employers. It informs you of your tax rate
for the following calendar year. If changes are made to your tax
rate after the annual mailing, a corrected Notice of Employer’s
Tax Rate is generated and mailed to you. Form UITR-3, Unemployment Insurance Tax Report Adjustment, Form
UITR-6a, Adjustment of Workers Wages for Multiple Quarters, and
Form UITR-6c, Social Security Number (SSN) Corrections The Unemployment Insurance Tax Report Adjustment, the Adjustment
of Workers Wages for Multiple Quarters, and the SSN Corrections
are used to correct errors in one or more previously submitted
UI Tax Report, correct errors in one or more previously
submitted UI Report of Workers Wages, and correct a name or SSN
previously reported on one or more UI Tax Report and/or UI
Report of Workers Wages. Form UITA-9, Worker/Contractor Status Questionnaire (Firm), and
Form UITA-9a, Worker/Contractor Status Questionnaire (Worker) The Worker/Contractor Status Questionnaire (Firm) and the
Worker/Contractor Status Questionnaire (Worker) must be
completed and submitted to UI Operations when questions arise as
to whether a worker should be considered an employee or an
independent contractor. The Worker/Contractor Status
Questionnaire (Firm) addresses contract-labor issues from the
perspective of the business, while the Worker/Contractor Status
Questionnaire (Worker) addresses contract-labor issues from the
perspective of the worker. Form UITD-4, Installment Payment Agreement The Installment Payment Agreement is generated and mailed to you
if you request that an installment payment agreement (IPA) be
initiated for the purpose of paying delinquent taxes or
delinquent benefits charges, interest, and penalties owed. The
form informs you of the total amount due by quarter; the
down-payment amount; the monthly, installment-payment amounts;
the respective due dates; and the terms and conditions of the
IPA. Upon receipt of the IPA, sign and return the form with your
down payment. Form UITR-37, Unemployment Insurance Delinquent-Tax Penalty
Statement, and Form UITA-6, Notice of Payment Due The Unemployment Insurance Delinquent-Tax Penalty Statement and
the Notice of Payment Due are used to notify you that a penalty
amount has been imposed on delinquent taxes owed and to provide
an explanation of the charges. According to CESA 8-79-104
(1)(c), if you have delinquent taxes as of the tax-rate
computation date (June 30), an additional penalty amount is
assessed. (For more information, refer to “What are the Penalty
and Interest Assessments for Late Reports and Delinquent Taxes?”
.) Form UITR-14, Application for Partial Transfer of Experience The Application for Partial Transfer of Experience is completed
and submitted to request a proportionate share of the UI taxes
paid, benefits charged, and payroll reported be transferred from
an employer who is already liable to pay UI taxes. The purchased
portion of the business must have maintained separate records of
the taxes paid, benefits charged, and payroll reported in order
to establish a basis for this transfer. This form must be
submitted within 60 days of the mailing date on Form UITL-3,
Notice of Employer Liability and Unemployment Insurance Tax
Account Number. You and the other employer must sign the
Application for Partial Transfer of Experience. Form UITL-59, Approval of Reciprocal Agreement, Form UITL-60,
Partial Approval of Reciprocal Agreement, and Form RC-2, Notice
to Employee for Colorado Unemployment Insurance Coverage The Approval of Reciprocal Agreement, the Partial Approval of
Reciprocal Agreement, and the Notice to Employee for Colorado
Unemployment Insurance Coverage are sent to you and your
employee as notification of the approval or partial approval of
your request that wages earned by an employee who works in more
than one state (including Colorado) be reported to Colorado. You
and the employee are subject to CESA for UI reporting and
coverage purposes. You may be granted full approval from all
states involved, partial approval from some of the states
involved (while denied by others), or a complete denial of the
request for the reciprocal agreement. Form UITL-2, Employer Change Request The Employer Change Request must be completed and submitted to
UI Operations if you cease operation in Colorado or sell your
business. You must submit this form within 10 days of cessation
or sale of the business to inactivate your account. A
partnership that incorporates is classified as a change in
ownership even if the owners are the same. This provision also
applies to a sole proprietorship that becomes a partnership or a
corporation that becomes a sole proprietorship. The Employer
Change Request is also used to submit address-change information
to UI Operations. Form RC-1, Employer’s Election to Cover Multi-State Workers
Under the Colorado Employment Security Act (Employer’s Election
to Cover Multi-State Workers) The Employer’s Election to Cover Multi-State Workers is used to
request that wages earned by employees who work in more than one
state (including Colorado) be reported to Colorado and subject
to CESA for UI reporting and coverage purposes. You must
complete and submit the Employer’s Election to Cover Multi-State
Workers to UI Operations for processing. UI Operations submits
the form to the other involved states for their approval. Form UITL-5, Request for Seasonal Determination The Request for Seasonal Determination is completed and
submitted to request that you be granted seasonal status for
your entire business or for specific occupations within your
business. The Request for Seasonal Determination asks specific
questions to determine if your business meets the
seasonal-status requirements defined in CESA. STATE UNEMPLOYMENT TAX ACT DUMPING Colorado’s UI Program has become increasingly aware of a
tax-avoidance method, known as SUTA dumping, used by some
Colorado employers to reduce their UI tax rate. The UI Program
is also aware that certain tax-advisory companies are promoting
tax-avoidance activities as a way of gaining business by
promising potential clients reduced expenses and increased
profits. The UI Program actively identifies and pursues employers engaged
in tax-avoidance activities and has the authority to subpoena
records and individuals in its investigations. Employers engaged
in tax-avoidance activities may be subject to criminal and/or
civil prosecution. SUTA dumping is a practice of some employers to create new
business entities and transfer employees and, in some cases, a
part of the organization, trade, or business to deliberately
avoid an increase in their UI tax rate caused by UI benefit
payments attributable to an existing company. The practice of
avoiding the proper payment of UI taxes places an undue burden
on those employers who pay UI taxes in a lawful manner. The UI Program has in place a tax-analysis program to detect
signs and patterns of fraud in UI tax-account activity. The UI
Program’s tax-fraud detection efforts target both active and
inactive UI tax accounts. Employers can help protect the integrity of the UI Trust Fund
and minimize the negative impact that SUTA dumping has on UI tax
rates by informing the UI Program of such activity. Information
may be reported to the Director of UI Integrity at 303-318-9036.
The source of the information is kept confidential. Colorado's UI Program participates in a federal data-matching
program whereby information provided by private employers and
government agencies is made available through the National
Directory of New Hires (NDNH). UI programs nationwide have
implemented this data-matching program. The purpose of the NDNH
data-matching program is to stop or limit the overpayment of UI
benefits to claimants who fail to report new employment, to
improve fraud-detection efforts, and ultimately to protect the
UI Trust Fund. The data-matching program is dependent on assistance from you to
verify information. The UI Program is placing emphasis on this
program by requesting that you verify new-hire start dates to
ensure UI benefits are discontinued for claimants who are
employed. Form UIB-144, Request to Employer for Earnings Data,
may be mailed to you for verification of a new-hire date and
earnings. Information on how to report the hiring of a new employee may be
obtained by contacting the Colorado State Directory of New
Hires, Employer Outreach Customer Service Department at 303-297-2849. WHAT ARE THE OBLIGATIONS FOR FEDERAL UNEMPLOYMENT TAX? Under federal law, you are required to file Form 940, Employer’s
Annual Federal Unemployment (FUTA) Tax Return. The form is submitted with the required payment to the District
Director of the United States Internal Revenue Services by
January 31 of each year. |
