Tax Central Alert: Michigan reduces Unemployment Taxable Wage Base after September 30

August 6, 2015|Amy Bradley

Many Michigan employers will soon pay lower unemployment taxes. Starting with the third quarter of 2015, the taxable wage base for unemployment insurance will drop from $9,500 to $9,000.

The new wage base is not intended to be permanent. The Michigan Employment Security Act was amended in 2011 to increase Unemployment Trust Fund reserves that were depleted during the recession. Now if the Trust Fund balance falls or is projected to fall below $2.5 billion dollars, a triggering mechanism will increase the taxable wage base limit back up to $9,500.

The following employers will not be eligible to use the new $9,000 wage base:

  • Reimbursing employers
  • Contributing employers who are delinquent in paying unemployment contributions, penalties or interest if they have an outstanding balance of $25 or more as of August 15.

Delinquent employers can remedy the problem and become eligible to use the new lower wage base if they pay their outstanding balance and the Unemployment Insurance Agency receives it and credits their account on or before August 15.

If your business is delinquent, you may pay the balance due either electronically through the Michigan Web Account Manager (MiWAM), or by check to the Unemployment Insurance Agency. Write your UIA Account Number on your check and mail it to 3024 W. Grand Blvd., Suite 12-600, Detroit, MI 48202.

For more information or for help with other payroll taxes, please contact your Schenck advisor.

Amy Bradley, CPP, is responsible for firm-wide research on payroll-related issues. Amy has 30 years of payroll experience, including work with multi-state and multi-employer payrolls.

Tags: Payroll, Tax