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April 10, 2011

Arkansas Advance Interest Tax Took Effect April 1, 2011

Filed under: News — Tags: , , , — Vision @ 6:00 pm

The Arkansas Advance Interest Tax took effect April 1, 2011. The purpose of the tax is to pay interest on Title XII advances received from the federal government to pay regular unemployment insurance benefits. The amount of the tax is 0.2% and the tax will remain on until the quarter after all Title XII advances and interest is paid and the Advance Interest fund reaches a balance of five million dollars.

No Separate Line on Contribution and Wage Report

There is not a separate line for the 0.2% tax; rather it has been added to each employer’s rate starting on the 2011 second quarter Contribution and Wage Report. (The total tax rate, including the Advance Interest Tax is shown in Part A, on line 6 of the Employer’s Quarterly Contribution and Wage Report.)

Advance Interest Tax Applies To All of 2011 and Perhaps Later

The tax will be due on taxable wages reported for the second, third and fourth quarters of 2011 and more than likely the tax will remain on, at least, through 2012 and 2013. The tax is due on taxable wages reported each quarter and as such, for the quarter ending June 30th (second quarter) would not apply to an employee who reached the taxable wage base ($12,000) in the quarter ended March 31st (first quarter). If an employee reaches the taxable wage base total at some date during the second quarter, only those wages paid in the quarter up to the total would be subject to the tax. The same principle holds true for the third and fourth quarters.

Contact Vision Payroll for Further Information

Contact Vision Payroll for further information on the changes to Arkansas unemployment taxes.

April 9, 2011

Illinois Adds Unemployment Tax Surcharge and Increases Wage Base

Filed under: News — Tags: , , , , , , , — Vision @ 5:59 pm
Illinois Adds Unemployment Tax Surcharge and Increases Wage Base
Illinois Adds Unemployment Tax Surcharge and Increases Wage Base
Illinois Governor Pat Quinn recently signed HB 1030 into law. The new law adds an unemployment tax surcharge, increases the taxable wage base, and reduces maximum benefits, among other provisions.

Surcharge Is for First Quarter of 2011

For the first quarter of 2011, employers are now required to pay a surcharge of 0.50% of taxable wages. Up to $90,000,000 of this surcharge is to be earmarked for interest payments for interest required to be paid under Title XII of the Social Security Act or for transfers to the state’s account in the unemployment trust fund.

Taxable Wage Base Will Increase in 2012

The taxable wage base will increase from $12,960 in 2011 to $13,560 in 2012.

Further Surcharge May Apply in 2012

If necessary to further interest payments, a surcharge will also apply to the first quarter of 2012 and the 2013 wage base will remain at $13,560. Otherwise, the 2013 wage base is scheduled to revert to the 2011 level of $12,960.

Maximum Benefits Reduced Starting in 2012

The new law also reduces the maximum total amount of benefits for an eligible individual, for specified benefit years starting in 2012, to 25 (instead of 26) times his or her weekly benefit amount plus dependents’ allowances, or to the total wages for insured work paid to such individual during the individual’s base period, whichever amount is smaller.

Contact Vision Payroll for Further Information

Contact Vision Payroll for further information on the changes to Illinois unemployment taxes.

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