On 4/15/14, Governor Deval Patrick signed an Unemployment Insurance rate freeze for 2014, eliminating a $500 million increase on employers that took effect January 1. This bill is a stand-alone measure that does not take up any system reforms but addresses the more immediate need to secure UI payments for Q1/2014, while our legislators consider reform action. As passed, this law freezes UI contributions at the current Schedule E and keeps the Trust Fund at a healthy $800M and represents the sixth consecutive year the state has prevented an automatic increase in employer UI taxes. With the rate issue now resolved, Massachusetts employers must square up with the UI system for the first quarter of 2014, which has an extended deadline for filing first quarter taxes of May 30, 2014.
According to the Massachusetts Division of Unemployment Assistance (DUA):
- All employers must submit employment and wage detail no later than April 30.
- The rates will be loaded the first two weeks in May.
- During the week of May 19, the system will open back up for employers to make their quarterly contributions.
- Contributions are due by May 30.
The DUA has also indicated it will work with individual employers seeking deferrals. For the first and second quarters, an employer may check off the deferral option and defer up to one third of the contributions due to the following second and third quarters respectively. You may file and pay online by logging into your account at www.mass.gov/dua. It is each employer’s responsibility to file the report before the due date. Employers failing to file on the due date may be assessed a penalty. By law, you will be charged interest on all contributions paid after the due date. The interest is 12 percent per year. DUA charges interest on the contributions due starting from the due date until the payment date.
Conversely, the Voluntary Contribution option allows experience-rated employers to make additional UI contributions to reduce their UI contribution rate for the forthcoming calendar year. The Voluntary Contribution process for this year will continue to be a manual process. Our Tax Department will notify computer VC analysis and provide a written recommendation, including specific payment guidelines and the submission deadline date associated with VC rate buy-downs.
To qualify for the Voluntary Contribution program, an employer:
- Must be eligible for experience rating;
- Must have submitted all Employment and Wage Detail Reports; and
- Must have paid all Unemployment Insurance contributions, interest, and penalties to date.
If you have any questions about this update, please contact Christine Smyth, Finance & Tax Manager at csmyth@utcainc.com or by telephone: 800.480.7725