Tax Department Tips

The following important "Tax Tip" is for your information.

Benefit payments charged, and taxable wages on which taxes have been paid for the twelve calendar quarters prior to October 1, 2022, will be used in the computation of your 2023 unemployment insurance tax rate. The Labor Code under the Texas Unemployment Compensation Act provides that taxable wages on which taxes have not been paid by October 31, 2022, may not be used in the tax rate computation. For this reason, any nonpayment of unemployment insurance taxes may increase your tax rate for

If you have unreported wages or unpaid taxes that are due from the twelve-calendar quarters preceding October 1, 2022, you are encouraged to submit your report(s) and payment by October 31, 2022. Without your reports and payment, the computed tax rate for 2023 can be expected to increase making your tax liability higher, if the past-due taxes remain unpaid.

To access your tax account information, report quarterly wages, and pay your taxes, please visit UTS, Unemployment Tax Services online at: http://twc.texas.gov/businesses/unemployment-tax-services.

Note: If the due date for a report or tax payment falls on Saturday, Sunday, or a legal holiday on which Texas Workforce Commission offices are closed, reports and payments are considered timely if they are received on or before the following business day.

2022 Tax Rate Notices Contained the Wrong Insert Information  

Important! The 2022 Tax Rate Notices are Correct. Only the wrong insert was included.

The Texas Workforce Commission’s (TWC) contractor inadvertently sent out the incorrect insert with the 2022 Tax Rate notices.

Employers can confirm their 2022 Tax Rate notice information, view Chargeback information and view Voluntary Contribution information online via the Unemployment Tax Services (UTS) System by going to: https://apps.twc.texas.gov/UITAXSERV/security/logon.do

1. Log in to your account in the UTS system
2. Select the Account Info tab at the top of the page
3. Select the Tax Rate Summary link in the Quick Links box on the left
   Note: 2022 minimum tax rate = 0.31%; 2022 maximum tax rate = 6.31%

Tax Rate Notice Insert Information: Below is the information that should have gone out with the 2022 Tax Rate Notices:

On November 23, 2021, TWC set unemployment insurance (UI) tax rates for 2022 at a stable level to avoid burdening Texas businesses with a significant increase of taxes resulting from pandemic-related closures outside of their control. This action is a result of the statutory authority of the Commission and was supported by funding from Senate Bill 8 (SB 8), passed during the 3rd Special Session of the 87th Texas Legislature and signed into law by Governor Abbott.

Employer-paid UI taxes replenish the Texas Unemployment Compensation Trust Fund, which provides temporary income for workers who lose their jobs through no fault of their own. Each employer’s UI tax rate is unique, tied to unemployment benefits paid to former employees. Absent SB 8 and the Commission’s action, most Texas employers would have seen significant increases in their tax obligation for 2022.

The Commission set the state’s UI replenishment tax rate to 0.20 percent, and the deficit tax rate to 0.0 percent. The Obligation Assessment was set to 0.01 percent to ensure that any federal interest due on Title XII loans were covered.

The components of your 2022 tax rate are:

• The general tax – based on claims against your account. If TWC has paid benefits to former employees who were laid off or separated through no fault of their own in the past three years, you will pay the general tax.
• The replenishment tax – charged to all experience rated employers to cover unemployment claims not charged to a specific employer. This tax tends to rise following economic downturns when claims increase and businesses close. This tax is set to 0.20%.
• The obligation assessment – to collect the amount needed to repay interest due from Title XII loans. This tax is set to 0.01 percent.
• The employment and training investment assessment – a flat tax of 0.1 percent, paid by all employers. By law, the Replenishment Tax Rate is reduced by the same amount so there is no increase in your tax rate due to this assessment.

At TWC, we work hard to minimize your unemployment insurance costs. In addition to lowering the tax burden, TWC is taking an aggressive approach to eliminate fraud, waste, and abuse of all kinds in the programs the agency administers. By reporting new hires immediately to the state Attorney General’s office, responding promptly to notices when a former employee applies for unemployment benefits and responding to earnings information requests on claimants, you can help us avoid overpayments and fraud which costs all employers.

TWC works closely with local workforce development boards across Texas to fill job openings with qualified unemployed workers, and we fund training to upgrade the skills of workers to better match area employers’ needs. TWC also works closely with economic development organizations to support existing Texas companies and to bring new business to the state. We pledge our continued efforts in helping to keep taxes as low as possible in order to promote a thriving Texas economy.

2021 Tax Payment Due Dates

The Texas Workforce Commission delayed issuing 2021 tax rates in order to avoid tax increases resulting from pandemic related charges. Our Commissioners took action earlier this year to adjust the due date for tax payments. Tax payments for 2021 are due as follows:

• The 1st quarter 2021 tax payment is due by August 02, 2021

• The 2nd quarter 2021 tax payment is due by September 30, 2021

• The 3rd quarter 2021 tax payment is due by November 01, 2021

• The 4th quarter 2021 tax payment is due by January 31, 2022

As a reminder, employers can review the 2021 tax rate online using Unemployment Tax Services (UTS) application https://apps.twc.texas.gov/UITAXSERV/security/logon.do. Once you have logged into your account on the UTS system, please click on the “Account Info” tab at the top of the page and then select the “Tax Rate Summary” link in the Quick Links box on the left to view your tax rate information. 

Updated 2021 Tax Rates Message

The Texas Workforce Commission (TWC) delayed issuing 2021 tax rates in order to keep them as low as possible for Texas employers. Click here to see TWC’s news release about the tax rates. 2021 tax rates are being issued, and the mailing will be completed by the 1st week of July. 

View Tax Rates Online

Employers can review the 2021 tax rate online using the Unemployment Tax Services (UTS). Once you have logged in to your account on the UTS system (see link below), please click on the “Account Info” tab at the top of the page, and then select the “Tax Rate Summary” link in the Quick Links box on the left to view your tax rate information for the last several years. 

Chargebacks

Chargebacks, if any, that have impacted your tax rate can be viewed by going to the Report Filing tab at the top, and then selecting Chargeback History from the Quick Links box on the left. 

If you believe that any of the Chargebacks are incorrectly charged to your account, you have three of the following options on how to file a protest:

Option 1

The Texas Workforce Commission (TWC) encourages employers to respond to Employer Unemployment Notices using the Employer Benefits Services (EBS) portal. Access to a Notice of Application or Notice of Maximum Potential Chargeback through the EBS portal allows employers to view, respond to, and submit the notices electronically. If you determine you have been charged for a claim you were not aware of, access electronic correspondence history in EBS. User guide links are below:  

This online feature provides 24/7 access to the online Other Services site, security, immediate updates and changes, and checks and balances validation so errors are caught and corrected immediately.

To respond a Notice of Maximum potential Chargeback electronically:

• Log on to Employer Benefit Services
• Select the Other Services tab 
• Select Maximum Potential Chargeback Notice from the Quick Links menu
• Enter the Social Security number (SSN) from the Chargeback Response: Getting Started page
• Select Next

For more information, see:

• Employer Benefits Services
• See a user guide on how to use EBS Administrator Duties
• See a user guide on how to use Electronic Correspondence
• Employer Unemployment Benefits Chargebacks
• Our user guide on Employer Benefits Services: Other Services

You can also respond to a chargeback notice by completing the back of the form and faxing or mailing it to TWC. The back of the notice allows you to provide the reason the claimant is no longer working for you.

Fax: 512-305-9687

Mail:
Texas Workforce Commission
Chargeback Determination Unit
P.O. Box 149137
Austin, TX  78714-9137

Option 2

Send an email to Chargeback Report protesting the claim. The email MUST include: The account number, claimant’s name, claimant’s SSN, claim date, reason for job separation as of the claim date, and proof of timely response. Missing information will delay UI response.

Option 3

If you have received an appeal or chargeback decision in your favor regarding a claim and the charge is still on your account, please allow 120 days from the decision for the Tax Department to update the account and issue a new 2021 tax rate for your organization.

View Rate Notices Online

Copies of your rate notices can be viewed through UTS eCorres after July 2, 2021. Until then, the document may not be viewable. Log on to your account, go to eCorres tab at the top, and then select the rate notice for viewing. 

Voluntary Contributions

Voluntary contributions are not in effect for 2021. Read Governor Abbott’s message regarding the suspension declaration.

Tax reports for 2021 must be filed by following due dates:

The 1st quarter 2021 tax report must be filed by 05-07-2021.

The 2nd quarter 2021 tax report must be filed by 08-02-2021. 

The 3rd quarter 2021 tax report must be filed by 11-01-2021. 

The 4th quarter 2021 tax report must be filed by 01-31-2022

Tax Payments for the 1st and 2nd quarters are extended as follows:

The 1st quarter 2021 tax payment is due by 08-02-2021. 

The 2nd quarter 2021 tax payment is due by 09-30-2021.  

Administrator Self Removal

Unemployment Tax Service Account Administrators can remove themselves from association with an account using the following process:

• At the My Home tab, select My Employers in the Quick Links box
• From the list of employers, find the account number that needs to be removed
• Under Action, the choices are Select or Remove
• Click Remove and follow instructions on the pop-up window

For assistance with other Unemployment Tax Services issues, please contact your nearest Texas Workforce Commission Tax office: http://www.texasworkforce.org/taxcontacts

2021 Tax Rates Update 

The Texas Workforce Commission (TWC) continues to explore options to keep the 2021 tax as low as possible for Texas employers.

2021 tax rates will be issued late in June 2021:

This will allow Texas time to consider legislation assisting Texas employers and for the Governor to sign that legislation.

Voluntary contributions are not in effect for 2021:

In order to assist Texas employers, Governor Abbott has suspended Section 204.048 of the Texas Labor Code, which set deadlines for a small subset of employers who make voluntary contributions into the UI tax system. The Commissioners in turn aligned TWC Policy with that decision.

Governor Abbott’s Suspension Declaration

Tax reports for 2021 must be filed by their original due date:

• The 1^st quarter 2021 tax report must be filed by 04-30-2021.
• The 2^nd quarter 2021 tax report must be filed by 08-02-2021.
• The 3^rd quarter 2021 tax report must be filed by 11-01-2021.
• The 4^th quarter 2021 tax report must be filed by 01-31-2022

Tax Payments for the 1^st and 2^nd quarters are extended as follows:

• The 1^st quarter 2021 tax payment is due by August 2, 2021.
• The 2^nd quarter 2021 tax payment is due by September 30, 2021. 
• The 3^rd quarter 2021 tax payment is due by November 01, 2021.
• The 4^th quarter 2021 tax payment is due January 31, 2022.

If your payroll system requires a tax rate, please see options below:

• New employers (operating less than 18 months) may use 2.7% as their tax rate.
• Experience rated employers (operating more than 18 months) may consider using their 2020 actual tax rate as an option or one of the following published 2020 rates:
  • 2020 minimum tax rate = 0.31%
  • 2020 average tax rate = 1.14%
  • 2020 maximum tax rate = 6.31%

IMPORTANT: If you use an optional tax rate for your payroll system, please adjust once the actual 2021 rates are published.

Employers can review the tax rate online using the Unemployment Tax Services (UTS) as rates become available. Once you have logged in to your account on the UTS system, please click on the “Account Info” tab at the top of the page, and then select the “Tax Rate Summary” link in the Quick Links box on the left to view your tax rate information for the last several years.