for Employers

If you’ve discovered an error on a previously submitted quarterly Combined Tax Report or Wage Report you can download a correction form and submit the correction by mail.  Click here* to download the U.I. 11A Adjustment form now.

If you need to change your mailing address or report some change in the ownership or status of your business you can do that as well by downloading a form.  Click here* to download a Notice of Change Form now.

If you need to talk to someone, click here to get the name and phone number of your closest unemployment insurance tax representative.

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1. Make sure you submit all UI Combined Tax Quarterly Reports (UI Form 11) timely.  A late report will result in a penalty between $25 and $200.  Even if you are unable to pay the tax due, submit the reports timely and avoid the penalty.  Be sure all combined tax reports have been filed by October 31 each year.  If you have not filed all combined tax reports by October 31 you will be assigned to the highest combined tax category for the following year.
2. Pay your tax liability as promptly as possible.  Interest is charged on delinquent tax at 1.5% per month (18% per year).
3. Each January employers complete an IRS Form 940 for Federal Unemployment Tax (FUTA).  Be sure you are current with your annual state liability by January 31, each year.  Contributions paid to the state by January 31, each year qualifies for a credit towards FUTA.  If you are delinquent paying your state taxes (contributions) you will lose FUTA credit costing you money.
4. Be sure you are correctly calculating the employee's taxable wages.  You pay tax only on the gross wages paid up to taxable wage base for the year.  The taxable wage base in 2005 is $7,000.  In 2006 it is $8,000 and in 2007 and thereafter it is $9,000.  Taxable wage are calculated on a yearly basis.  Some employers mistakenly believe they must begin recalculating taxable wages each quarter rather than each year.
5. Complete fully any Request to Employer for Separation Information (UI Form 350) which you receive.  Provide full and accurate information regarding the separation.  In some instances claimants can be declared ineligible for benefits.  In other instances benefits paid will not be charged against your account if timely information is received.  Be sure to mail the form to the address specified on the form so it is received by the due date, or FAX the form to the number shown so it is received by close of business on the due date.

Most employers pay federal unemployment tax to the IRS. The federal unemployment tax is in addition to state unemployment tax. The tax is reported to the IRS by January 31, each year on IRS Form 940 or 940EZ. Employers who have a liability of $500 or more at the end of any calendar quarter are to make a quarterly deposit of FUTA along with their federal withholding payment.

The state and federal unemployment insurance tax systems are interrelated. All employers have a basic FUTA tax rate of 6.2% on the first $7,000.00 paid to each employee each year. However, if the employer is current with state unemployment insurance contributions, the employer gets a 5.4% FUTA credit so the effective FUTA rate becomes .8% on the first $7,000.00.

Click here to view the Federal Unemployment Tax Act webpage.

It is common to encounter misconceptions about who is and who is not an independent contractor. For Nebraska state unemployment insurance purposes, services provided by an Independent contractor are exempt from employment. This means no tax is owed and no benefits can be paid based on services provided as an independent contractor. However, Nebraska revised statutes (§48-604(5)) include a definition or test to define an independent contractor relationship and it is this statute that controls who is or is not an independent contractor. The requirements extend far beyond simply calling an individual an independent contractor or having a worker sign an independent contractor agreement.

The statute creates a three-part conjunctive test which is not the same as the common law or 20 point test used by the Internal Revenue Service. All three parts of the test must be met for an individual to be exempt from employment as an independent contractor. The test is sometimes referred to as the A-B-C test. Payment for services will be considered employment unless and until it can be shown to the satisfaction of the commissioner that:

1. such individual has been and will continue to be free from control or direction over the performance of such services, both under his or her contract of service and in fact,
2. such service is either outside the usual course of the business for which such service is performed or such service is performed outside of all the places of business of the enterprise for which such service is performed, and
3. such individual is customarily engaged in an independently established trade, occupation, profession, or business. The provisions of this subdivision are not intended to be a codification of the common law and shall be considered complete as written;

If you need more information concerning independent contractors, please contact your field representative.

Instances of abusing state unemployment insurance tax rate systems across the country have been brought to light in the recent past. The term “SUTA dumping” refers to attempts to “dump” a high experience tax rate in order to obtain an artificially low tax rate. SUTA stands for “State Unemployment Insurance Tax Act” - a generic term for a state’s unemployment insurance program. SUTA dumping unfairly allows one employer to escape the true cost of unemployment insurance and shift that cost to other employers.

SUTA dumping as well as advising others to participate in SUTA dumping is a felony under state statute and carries civil penalties as well. In addition to judicial remedies, SUTA dumpers will be assigned penalty tax rates for future years. Nebraska Workforce Development advises employers to be wary of schemes being promoted to reduce unemployment insurance costs by manipulating accounts, transferring employees or creating artificial structures for reporting payroll.

New employers need to be aware of the following responsibilities concerning employment taxes.

• Federal Witholdings - These are handled through the I.R.S. which assigns a federal employer's identification number and collects the employee and employer share of medicare and social security taxes.
• State Withholdings - The Nebraska Department of Revenue collects from employers the withholdings for state income tax.
• Workers Compensation - The Nebraska Workers Compensation Court administers this program. Employers generally buy workers compensation coverage from a private insurance agent.
  
• FUTA - Federal Unemployment Tax Act - FUTA is reported to the IRS on a 940 or 940EZ form in January for the year previous. If accumulated FUTA tax exceeds $500 at the end of any quarter a deposit must be made.
  

Click here to find links to these and other resources.