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2016 Iowa Withholding Annual VSP Report - Iowa Department Of ... Form

all right well let's get started first of all I want to welcome everyone to today's webinar on Iowa withholding and unemployment basics for employers my name is Rob Williams I'll be serving as today's webinar moderator I'm with ia source link in the University of Northern Iowa's my entremet program I have this a few items to cover before we kick off today's presentation first of all we do record all of our webinars and make them available on the ia sourcing website and I know the Iowa Department of Revenue also places them on their website that usually happens within a week and I know we've also fielded some questions about the PowerPoint you can also currently find the PowerPoint on aia source like if you need to download that as many of you have discovered there is a public comment box in the lower center part of your screen please keep this area clear during the presentation but alert us to any technical difficulties that you may be having Patrick linchpin is our technical support lead and he can help you with any problems that may come up please Patrick if you could have put in your email address and phone number and contact him if you have any questions in regards to the technology as many of you have also noticed in the lower right-hand part of the screen we have a questions and answer box we may not get to all of your questions today but please do submit those questions and we'll we'll try to answer as many as we can in the time time allowed the guys that are willing to stick around a little bit longer to answer those and all the questions we will get answered in a PDF document which will also be uploaded on the site usually within a week or two following the end of the today's presentation there will be a feedback survey so if you if you would please complete that feedback survey let us know how you thought today's webinar went and if you have other topics that you'd like to see us cover please let us know that too all right so let's cover today's webinar we're going to be providing an overview of Iowa income tax withholding and I will unemployment insurance tax Terry O'Neill with the Iowa Department of Revenue and Michael Wilkinson from the Iowa Workforce Development will be both our guest presenters today Terry started with Iowa of Revenue in 1987 as a summer intern working to find non registered businesses in the fall of 1987 he became a revenue agent collecting past due taxes in the Davenport area in 1999 he became a taxpayer service specialist and as a TSS he helps taxpayers through email phone on a wide variety of tax related issues in addition Terry is also the lead presenter for presentations for us here at the lead presenter for the Iowa Department of Revenue we do have one quick technical issue here so this hold tight and we'll get this resolved Terry if you want to give me just one second folks hang in there there we go sorry about that live we'll have an artist II just never know so as I was saying Terry with the hire Department of Revenue he is a primary presenter for a lot of the educational outreach efforts of the department like our partnership webinars that we do Michael Wilkinson our second presenter is a division administrator for unemployment insurance services with Iowa Workforce Development he's promoted promoted to his current role in July of 2010 his 32 years of experience incorporates leadership in a variety of programs from disciplines of Workforce Services in unemployment insurance to large-scale system and cultural change in addition to creating new relationships with businesses and promoting greater accountability for the claimant to his mission is to lead the redesign of the unemployment insurance benefits and tax systems thank you both for joining us for today's presentation I mean for being willing to share your time and expertise with this Terry go ahead and get it started okay thanks a lot Rob yeah I just want to do a shout out to to Alan Morrison is back again from Davenport sure appreciate you attending once again Alan all righty the first thing we're going to talk about today is Iowa withholding tax and we are going to discuss Scituate we're Iowa withholding may be required this would include things such as wages paid to employees pension or annuity payments and other non wage income gambling winnings and also the Iowa income of non-residents one thing I do want to make clear is that as far as we are concerned here at the Department of Revenue withholding taxes withholding okay it doesn't matter what it's coming from where it's being withheld from it all goes into the same pot so to speak so you do not have to account for where that withholding is coming from when you do your reports with us again if it's wages if it's gambling winnings if it's non-resident income it's all Iowa income all Iowa withholding as far as we're concerned so anybody that has that is required to withhold federal income tax on compensation or wages paid to an employee for work performed in Iowa and if you've got an office in Iowa or you do business in Iowa it also can be for any non making payments to individuals with you're subject to Iowa withholding so examples of Iowa of employee compensation subject to Iowa withholding this is going to include wages other compensation that's subject to federal withholding tax supplemental wages which includes things such as bonus pay overtime pay commissions other special payments that are made if it's anything for him to interrupt you I'm sorry go ahead I think secretly power settings and we're meticulously set okay let's get this big stop here you okay this is going to be quite a bit louder so you might want to turn down your speaker's a little bit okay perfect okay that's what we want I want perfect we don't want anything less than that we're also gonna reset the webcam here well I don't know that we're gonna get the video to work so we're just gonna press on as long as the audio is great we will continue on okay what's uh let's go ahead and and move on some examples of non wage income that are subject to Iowa withholding would include things such as pensions annuities supplemental unemployment benefits sick pay benefits and other non wage income payments again these are just some examples of non wage income that are subject to Iowa withholding gambling winnings gambling winnings are subject to Iowa withholding this would include lottery winnings winnings from games of skill games of chance winnings from raffles winnings from slot machines paramutual winnings as well we'll get into the the different thresholds for withholding to apply to these different gambling activities here in just a little while Iowa income of non-residents that are subject to Iowa withholding would include employee compensation this is a question we get quite frequently people from out of state will ask us if they have to withhold Iowa tax and their employees when they're working in Iowa the answer is yes you do we've got an exception for Illinois residents which we'll get to here in just a few minutes also subject to Iowa withholding would be compensation paid to entertainers performing in Iowa we do have an exception for non-residents engaged in film production or television production they've got some information if they provide to the department that income will not be subject to Iowa withholding rental payments received from Iowa property are going to be subject to Iowa withholding taxable Iowa source income paid to a beneficiary of an estate or a trust distributions of Iowa source income received by a non-resident partner or shareholder of a partnership or S corporation doing business in Iowa these things are again just some examples of some non-resident income that are subject to Iowa withholding also income derived from any business of a temporary nature such as contracts for destruction or fees paid for services in Iowa so something to keep in mind if you're coming to work here to do some business in Iowa chances are there is likely going to be Iowa withholding required employee compensation of non-residents our subject I was holding again employers doing business in Iowa are required to withhold Iowa individual income tax from wages and salaries of non-resident please we do not have separate rates for this it's withheld at the same rate as for Iowa residents I did mention that we do have some exceptions including the Iowa Illinois reciprocal agreement and for non-residents working in interstate commerce such as employees of railroads airlines or trucking companies these are some exceptions I mentioned this Iowa Illinois reciprocal agreement here a couple of times already what is the Iowa Illinois reciprocal agreement well only Iowa and Illinois have this agreement and basically the agreement says that employees pay wages to the state they are a resident of four Iowa residents this is going to mean that the individual income tax provides that any wages or salaries that are made by an Iowa resident working in Illinois are taxable only to Iowa and not to Illinois this agreement has been in effect since the early 1970s and there have been no changes in this since that time what should an Iowa resident do if they're working in Illinois they should complete the Illinois form I lw5 and our this is the employee statement of non-residents in Illinois give that to the employer and it lets the employer know that it is appropriate to withhold Iowa income tax they're also going to need to complete an Iowa w-4 form which can be found on our website one thing to keep in mind is the reciprocal agreement only covers wages or employee compensation it does not include it does not include some other types of income Illinois will tax Illinois source income from things such as gambling winnings or unemployment compensation for uh for employment in Illinois we get quite a few questions on this usually around tax time again the reciprocal agreement is only going to cover wages or employee compensation such as wages does not apply to other types of Illinois source income the Iowa Illinois reciprocal agreement what does this mean for Illinois residents it basically means that any wages or salaries made by an Illinois resident working in Iowa is taxable only to Illinois and not to Iowa we have a form as well that should be completed by the Illinois resident they should complete the ia forty-four - zero one six employees statement of non-residents in Iowa you provide that form to the employer so the employer will know that it is appropriate to withhold Illinois tax and not withhold Iowa tax on this income as with Illinois for income that is not wages or salaries that is still going to be subject to Iowa tax if it is Iowa source income again using the same examples of gambling winnings in unemployment compensation for employment in Iowa those items of income those examples of income are not covered under the Iowa Illinois reciprocal agreement and therefore those will be subject to Iowa income tax Iowa withholding as well I also mentioned another exception just a little bit ago for non-residents working in interstate commerce such as employees of railroads Airlines or trucking companies under provisions of federal law Iowa tech should not be withheld from non-residents working in Iowa as employees of railroads airlines and trucking firms in interstate commerce if they're working in at least one other state withholding may be required for the employees state of residence or the non-resident employee may be required to make estimated payments to their state of residence again it's not going to be subject to Iowa withholding how do we determine how much to withhold on wages and salaries well you can use either the Iowa withholding tax tables formulas or percentages you can look at our Iowa withholding tax guide which is available on our website and yes the 2006 version is the current version that you can use so there has been no change in that since again April of 2006 so you can use the current guide that you have been using here's just a quick example of the Iowa withholding tax tax guide this is the tables and basically it's pretty straightforward you figure out what the wages are and then you run across to the left the columns to see how much withholding is required it's based on the number of exemptions that the person is claiming on their w-4 form the iowa withholding formulas are again in the booklet that i referenced just a couple slides ago and you can get that information from our website as i mentioned previously to determine how much to withhold each employee should complete a federal w-4 form in an iowa w-4 form these are going to help the employer determine how much to withhold from the employees paychecks again the 2014 Iowa w-4 is available on our website the 2015 will be coming out here before too long because we're almost to 2015 for the iowa w-4 within 15 days of employment each employee must sign and complete an iowa w-4 it must show the number of allowances the employee is claiming if an iowa w-4 is not signed the employer must withhold using 0 allowances the employer should keep the iowa w-4 for at least four years this is not something that is set to the department unless we request it for some reason or there's another reason that we would request it we'll get too into that here in just a minute here's a picture of the 2014 w-4 the actual form itself does have instructions on the back to help a person when completing that we also have a short informational video basically or information on our website that helps a person fill one of these out so that's a good place to go if you've got an employee that's not sure exactly how to complete this they can find that information on our website who qualifies for exemption this is going to depend we've got a lot of different folks that may qualify for exemption some examples would be a married couple or head of household with total income of thirteen thousand five hundred or less they can qualify for exemption a single person with income of nine thousand dollars or less who is not claimed as a dependent by someone else or also a single person with an income of less than five thousand dollars who is claimed as a dependent on someone else's Iowa return these folks can file and claim exemption from Iowa withholding some other folks that are would be eligible for this as well if the person is age 65 or older a married couple or a head of household with a total income of the year for the year excuse me of $32,000 or less if at least one spouse or the head of household is 65 years of age or older as of December 31st of the tax year if you are a single person who is 65 years of age or older as of December 31st of the tax year 24,000 is the is the threshold for exemption one that we've been getting questions on here frequently just lately we've gotten a lot of questions on this area any members of the Armed Forces Armed Forces military Reserve or National Guard that are in active duty status and this is as defined in title 10 of the US Code they can exclude from Iowa tax pay received from the federal government they can exclude their income from tax they can exclude it from Iowa withholding as well they can claim exemption when they can their w-4 form again this has been in effect since since 2011 but we have had a lot of people have been questioning it recently there is information on our website as well for military personnel that's another source to get some information military spouses may be exempt from Iowa income tax on wages if their spouse is a member of the Armed Forces present in the state other than their home state in compliance with military orders they can also claim exemption if they are present in a state other than their home state solely to be with their spouse and also if they maintain their domicile in their home state military orders must station the member of the Armed Forces in the state of Iowa in order to claim this exemption again as I mentioned our our website does have information for military personnel it's a good source to find out the various things that are going on with the military when it comes to claiming allowances on the Iowa w-4 I mentioned this just a little bit earlier we do have instructions on the Iowa W Force it helps determine how many personal allowances you may claim how many allowance for dependents allowances for itemized deductions allowances for adjustments to income allowances for child and dependent Care Credit all of these things can affect the amount of withholding that comes out of your out of your pay again you should follow the instructions follow the information on our website in order to complete the w-4 correctly again instructions are pretty fine print on this slide but that shows what we do have available on the actual w-4 form itself a lot of times sometimes folks want to have additional amounts withheld you can do that as well a lot of times married couples both of whom are working and persons who have two or more jobs need to have additional tax withheld you so you can pick out a specific dollar amount that you want to have hell each paint period this will help you so you are not underpaid when it comes to your end if you're making any changes to the Iowa W for a new W for may be filed at any time if the number of allowance increases a new W form must be filed within ten days if the number of allowances previously claimed decreases so the bottom line if you have any changes at all to your tax situation please be sure and let your employer know and how do you do that you feel out a new Iowa w-4 form that way they will withhold the proper amount of tax for your situation so that you are not underpaid when it comes tax time I mentioned this a little bit earlier as well while employers are required to keep w-4 is on file you do have to send them to the department on occasion number one if the department ever requests them you must send them to the to the department the other reason would be if an employee is claiming more than twenty two withholding allowances or claiming exemption from withholding when wages are expected to exceed $200 per week the employer must send a copy of the Iowa w-4 within 90 days to the Department of Revenue I'm not really sure I haven't had a lot of questions I guess on this recently I don't know if this is a frequent occurrence with with employers running into this situation or not I know this has been a requirement with the department for quite some time I just personally haven't had any questions on it for quite some time one thing that's on the top of our Iowa w-4 form the top portion of it has a centralized employee registry this is something that's required to be completed by the employer within 15 days of hiring someone a lot of this information goes for Iowa child support recovery and so the information if you hire a new employee must be completed as I understand it you can fax this in you can mail it in you can complete it online as well but the information does need to get reported or for child support recovery perfect purposes any employer that's doing business in Iowa who hires or rehires an employee must submit this centralized employee registry reporting form again it is just a top portion of the Iowa W for the actual Iowa w-4 is on the bottom of the form this goes to the Department of Human Services within 15 days of the date of hire or rehire if you have questions about that contact our contact the employers partnering and Child Support Unit at one eight seven seven two seven four two five eight oh and that phone number is on the top of the Iowa w-4 it's actually in a centralized employee portion of the form so you can call it there are any questions how much tax do we withhold on Supplemental rate wages and I mentioned supplemental wages a little earlier but just to refresh your memory supplemental wages is going to include bonus overtime pay commissions other special payments that are made in addition to regular wage payments this is what's known as supplemental wages if federal taxes withheld on a flat rate basis Iowa tax must be withheld as well at a rate of 6% however if the supplemental wage payment is included with regular wage payments the two are combined and the withholding tables or formulas are going to be used so if federal taxes are required to be withheld at a flat rate on this type of income Iowa is as well and the rate is 6% for Iowa purposes when it comes to non wage payments again just a reminder for you on on wage payments include pensions annuities supplemental unemployment benefits sick pay benefits other non wage income payments the rates for this is going to be 5% in situations where no federal income taxes withheld the receiver of the payment may choose to have Iowa withholding taken out otherwise the the Iowa withholding is going to be at a rate of 5% Iowa with is not required when payment amounts or taxable amounts of non wage incomes fall below certain levels when the payments are not subject to Iowa income tax or when no federal income tax withholding is required on those amounts when it comes to pensions and annuities how much is going to be withheld a reminder for many of you Iowa does have a partial exemption from Iowa income tax for pensions annuities self-employed retirement plans deferred compensation IRA distributions and other retirement benefits to qualified individuals who's a qualified individual while you must be 55 years of age or older or disabled or a surviving spouse of an individual who would have qualified the exemption is up to $12,000 for joint filing status and up to $6,000 for all other filing statuses eligible recipients should complete the Iowa w4p form again available on our website for tax years beginning January 1st of 2014 military retirement benefits can be excluded from Iowa individual income tax and withholding this is something that is new this year the exclusion also applies to military survivor benefits received under title 10 USC 14:47 the exemption is in addition to the general 6,000 or $12,000 partial pension exclusion that's available to Iowa individual income taxes for taxpayers 55 years of age or older again you would complete the IAW for p in this situation that will help to make sure that you have the proper amount of withholding or in this case for exemption you would not have any withholding this is a picture of the Iowa w4p again available on our website you can pull that form up gambling winnings I mentioned before the various gambling winnings that we have here in Iowa this would include things such as lottery winnings of games of skill winnings from games of chance winnings from raffles slot machines paramutual winnings and it's gonna depend on the amount that is won before the Iowa withholding and a rate of 5% will apply if it is from Iowa lottery winnings in it the threshold is going to be $600 if it is from winnings of games of skill games of chance or raffles again $600 is going to be the threshold if it is for paramutual winnings threshold is $1,000 and if it is from winnings from slot machines on riverboats or at racetracks that threshold is going to be $1,200 again the rate is the same but depending on the type of gambling that it is there are different thresholds before the Iowa withholding a 5% applies okay I've kind of rattled off a lot of things here at you as far as what is subject to Iowa withholding how do you register to be an Iowa withholding agent well you'll have to contact the Internal Revenue Service and apply for a federal employer identification number you can get on the i/o the IRS website we have listed on the slide there and so is their contact number to register for Iowa withholding you're going to need to complete the Iowa business tax registration and that's available on our website I'll kind of show you that when I give the website information here in just a little bit but this is something it does not cost anything however it does take about 4 to 6 weeks for the application to be processed so if you need to register right away please note that it is going to take a little bit of time to process your application any issue the iowa withholding number to you couple of things to keep in mind the iowa withholding agent is the person who has the authority to make wage payments or delegate that authority this is not necessarily the person that does the actual bookkeeping that completes the returns or writes the checks withholding agents are personally individually and corporately liable to the state of iowa for withholding and paying the taxes that were withheld please keep in mind that a payroll service is not the withholding agent and again it is not the person who is completing the form or setting up the payment this is something that's going to be legally individually corporately liable for the taxes that were withheld how often is I will withholding remitted to the department well it's gonna depend on the amount of tax that you are withholding when you complete the business tax registration with the Department and you register with us you're gonna have to pick out a filing status the filing frequencies again depend on how much money we're talking about we have quarterly status which means you are going to be remitting less than $500 per month in Iowa withholding we have monthly status which means you're going to be remitting between $500 a month and $10,000 per month we also have semi-monthly filing as well if you remit more than $10,000 per month or more than $5,000 on a semi monthly basis if your status needs to change you can complete our form for change cancellation or correction which is found on our website please note that the only time we make a change in filing frequency is the start of a quarter so if you're a remitting tax to us on a quarterly basis but you've got more employees you're withholding more and more tax and you should be doing that monthly fill out our change form submit that to us and we will get you set up to file more frequently if needed when it comes to filing returns and for those of you to them that have been to our webinars before when we talked about filing for sales taxes or use taxes the Iowa withholding is also filed electronically through our efile and paste system in order to do the filing you're going to need your ven your business 'if aisle number this is something that we will issue to you when you register for iowa with in tax if you're already registered for Iowa sales tax or use tax you have a B en when you complete your business tax registration for Iowa withholding we will add withholding to that existing ven you're also going to get your user ID in the default one that we assigned to everybody is zero zero zero one and then the password that's something that you're going to set up you're going to need those three things in order to access the e-file and Pay system every time you want to file this is just what the entry screen looks like if you were to get into our system you would enter your B en in the section in the top portion for business taxes this is how you would file your withholding tax against sales and use taxes as well when it comes time to filing the return and making the payments all withholding payments to the department must be the actual amount withheld we don't want people making estimates or approximations we want the actual amount of tax that was withheld that's what has to be filed and remitted to the department when it comes to the end of the year what is required is what is called the VSP the verified summary of payments this is always due by the end of February each year and basically what this is is a reconciliation of all of the Iowa withholding that you had for the year you do not remit any tax when you're complete this VSP this is just something that allows you to kind of take a deep breath and look back at what did you do during the year make sure everything reconciles again this is done through the e-file and Pay system as well so get in there with your be en your user ID and your password and you can complete the VSP through our a file and paste system this is another thing that we frequently get questions on as well employers are not required to send copies of w-2s or tending 1099s to the department with the VSP okay this is something that you the one that issues the w-2 or the 1099 has to keep on file for at least four years from the end of the year for which the form applies to so hold on to those do not send us copies of them we've been getting quite a few emails lately of people wondering if the state requires us to to send these things in and the answer is no that requirement has not been around for quite a number of years you hold on to them just do your filing electronically and like we'll be good you won't have to worry about it when it comes to end-of-the-year reporting the w-2s or 1099s depending on circumstances must be given to employees on or before the last day of January following the tax year or within 30 days at the time the last wage payment is received if requested by an employee so again just like with the IRS we follow along with federal guidelines get those out by January 30th of each year and you will not have any problems as promised here's our website this is something that's been redesigned here within the last few months it's really pretty neat it looks looks nice this is where you will go to get information from the department again including applying for withholding tax registration you can do that on our on our website one of the features we have on our website includes the iowa tax research library this is a place you can go to obtain information if you have a question as always for breaking news you can subscribe to one of our list newsletters we've got a list available on a variety of topics including Iowa withholding you can pick and choose these things they do not they do not cost anything we will just email you automatically when we when we send these things out you do not have to do anything more than subscribe to it the Department of Revenue is also on Twitter you can follow us on Twitter we've got three different accounts we try to get out a tweet every day every working day of the month this is something that we try to get a little more information it's another way to stay in touch stay informed with the depart revenue so follow us on Twitter you can also like us on Facebook as well again like the Twitter accounts we try to put some information out on Facebook every working day of the month so that's a good way to stay informed if you still have questions or you need information be sure and check out our Iowa withholding tax information booklet I reference this a little bit earlier today you can also give us a call between 8 and 4:15 if that doesn't work for you send us an email we'll respond to you as soon as we can as always protect yourself from identity theft the department will always identify itself when we're in contact with you we will never ask you to provide a full social security number by email or regular mail we do not send emails asking for personal information or financial information so again this is just part of the world we live in today be careful a lot of people are trying to get your identity get your information if you're not sure if you've got a communication from the Department of Revenue or not you can verify it don't provide any personal or confidential information contact us I'll gladly tell you if someone is actually an employee of the department if it's a legitimate communication that you're receiving so I try to be cautious caution is is the best is the best way to go as always the purpose of this webinar is to provide some general education information anyone involved in an audit or protest must contact the department representative they're working with on that issue we cannot get involved in the middle of a protest or an audit so with that being said I'm gonna turn it over here to Michael and he will give you information on from Iowa workforce development point of view well thank you very much for including me in this presentation today I want to emphasize a couple of points that Terry made here iwd shares shares the same perspective on the identity theft and we too will not be asking we do not ask for those kinds of Social Security numbers and don't ask for those kinds of things emails we do want to make sure that that is protected for yourself and your employees also one other point that Terry made in his presentation is about the centralized employee registry that's a tool that iwd takes advantage of as well as a fraud prevention tool when you report those individuals to the centralized employee registry your new hires and your recalls we run a cross-check against that to ensure that individuals claiming unemployment insurance benefits are not also working so that's a valuable tool for you to help us in preventing fraud for unemployment insurance or purposes I will be talking most of the time about unemployment insurance tax and I want to let you know that we also provide identity also provides presentations on benefits unemployment insurance claims appeals and so forth and to schedule something like that for yourself before a group please contact me and my contact information will be in these slides what is unemployment insurance it is a tax paid by the employers and in Iowa there's paid exclusively by employers it's not welfare welfare it's based on need it provides temporary benefits for people who are unemployed through no fault of their own they're able to work in actively looking for work the tax that is paid for an employment insurance goes into a special fund called the trust fund that trust fund is used only for the payment of unemployment insurance benefits as administered by iwd and is maintained by the state treasurer's office there's an additional tax that you pay for unemployment insurance and as to the federal government is called the federal unemployment tax act and that's paid exclusively by the employer the tax rate is set at six percent however because of the health of the Iowa trust fund we have a credit of five point four percent and we pay consequently you only pay six tenths of one percent on the first seven thousand dollars wages for example if you have a work base or employee base of say five employees and they all over at least at $7,000 your tax would be approximately 210 dollars a year when do you become liable as an Iowa employer for new construction and non-construction employers and we do fit differentiate between the two of them I'll explain that here in a little bit if you have a payroll of $1,500 or more in any calendar quarter or you have one or more employees for 20 weeks or you become federally liable agricultural employers are a little bit different they have a payroll of $20,000 or more in a calendar quarter and you have 10 or more employees for 20 weeks domestic employers in other words an individual comes to your home it's a a roll of $1,000 or more in the calendar quarter Indian tribes and political units are automatically liable and nonprofits are the same as a new construction or non construction employer however they can elect a reimbursable status which simply means the taxes paid exclusively on any unemployment insurance benefits charged there are some exemptions for eligibility for sole proprietors primarily it's a familial relationships and for partnerships it's the same thing however it's the say the the partnership is the spouse and a child and so forth limited liability companies membership members that are proportionate to their ownership they are not they're not liable and they are exempt and corporations there are no exemptions to register as an employer with unemployment insurance we register online at WWE UI org or you can go to I will workforce org and get to the same location there will you'll be asked for some specific information on your company and to get started you'll be creating your ID and you'll need an email address to ever into the system to begin with this slide here shows the information that you will need at the very least to get started including the FIM that Terry mentioned Social Security numbers and information about the owners partners and so forth dates of employment when you first started the business wages paid and so forth once the account is set up coordinate reports are required even though you may not pay any wages for that quarter for example if you might be a seasonal employer and shutting down for the winter and there are no wages paid still need to file that quarterly report it's filed online exclusive explicitly filed online in Iowa and it's a very simple process and there's one of three ways it can be done for large employers say a thousand employees or more we use a secure file transfer there's also CSV which is a download of sorts and also we recommend if you have 50 employees or less go ahead and enter the the wages in each quarter it's very easy to do actually we retain the names Social Security numbers from the prior quarter so it's just simply a matter of updating the wages or removing an individual or adding an individual it really doesn't take very long to get that completed now those quarterly reports are filed within one month at the end of each calendar quarter for example we have the filing quarter for the fourth quarter of 2014 coming up starting in January and that will complete January 13th and contributions are due at the end of that filing month as well how's the tax calculated there's two things that affect unemployment insurance tax it's what we refer to as charges or experience and the annual taxable wage base the ratio the rate is calculated in a three step process and I'll go through that fairly quickly but it's a ratio of the taxable wages in the charges to the account so essentially if there are no charges your tax rate will be zero we actually have roughly 45% of employers in Iowa that have no tax rate there is there a zero rate employer this is the benefit ratio table it's from 2013 there's various ranks in here and we rank them by that experience ratio for example to charge the average charges for the last five years divided by the taxable wages for the past five years and that establishes a ratio and places you on a particular rank for the table this slide here shows the contribution rate table this rate table is in law it's published in Iowa code 96.7 I've highlighted a few of those tax rate tables I believe in 2011 we were at tax rate table 3 which I don't think we've seen that lower rate in quite some time table 4 we went to in 2012 5 and 13 and we're currently in table 6 and recently we've announced that in 2015 we will go to tax rate table 7 which is one of the best rates here you'll notice in the rankings here on this table if you're within the top three ranks you have no charges or no tax on that and the actual amount of tax increases vary slightly until you get further down in the table tax rate notices they go out once a year normally in November we will start mailing those out on November 24th if you have logged into my Iowa UI our tax system you'll be able to see your tax rate on November 24th before you actually received a notice those tax rates again like I said they come out once a year and if you disagree with the rate that has been calculated you have 30 days to appeal that that calculation for new employers non-construction employers they're ranked 12 establishes the rate however if you notice from the prior table rank 12 actually is less than 1% for the coming year so it would be established at 1% for construction the rank is 21 or the highest and I believe that will be at 7 percent in 2015 this slide here simply shows some of the history I'm very proud of the recovery that Iowa has made in direct correlation with US business folks and your hiring and the aggressive nature you've had taken in recovery you'll notice that tax table 6 we were at that in 2009 and tax table 7 we haven't been at since 2002 this tax rate table it's reflection of the economy and some of you may recall the agricultural recession that we experienced back in the 80s and then obviously the recovery and the slight recession that we experienced in 2000 ok rates are also affected by changes in ownership purchasing of businesses etc they're essentially as two different scenarios one is successor a full successor or a partial successor and a merger in the interest of time I'm not going to go into them into huge detail but suffice to say that mergers are essentially two existing Iowa active accounts that are merging full successor a partial successor are someone that's maybe purchasing the business from out of state and it's starting up business in Iowa or is just going into business in Iowa and it's purchased a part or all of the company there are some unique variations with successors versus mergers and it provided some of the information here for you on the prior slide I provided the name and contact information for our tax bureau chief Kerry O'Brien it should be more than happy to go into any of the details and discuss the pros and cons of how we would apply a full successor or a partial successor or a merger here we have a partial successor partial successor excuse me they have mandatory and non-mandatory situations mandatory situation being such that an existing company may be breaking off part of the line and to the employees of the company are breaking off and starting separate companies merger here you have a slight distinction between the successor ships and the merger and again if there are specific questions that we can handle those here and they in the Q&A portion or by contacting Kerry O'Brien our tax chief inactivating account is a very simple process you should inactivate it anytime that you no longer are in business in Iowa or you have a sole proprietor that you no longer have employees that the employer is no longer in business at all in the state of Iowa in activating account is very simple there is a form that you can complete from online or you can simply call our toll-free number there and speak with one of our field lawyers and they will take the information to get the account in activate it reactivating it is just as easy we normally will connect you with a field order to determine if the account should be reactivated or if it's been too long or if there were some other unique circumstances when the account was inactivated I'd like to talk briefly about distinctions between independent contractors or employees that has been a subject of interest to our Iowa legislature an independent contractor or employee the distinction has to do with direction and control that the employer may have what we find is that historically or accidentally an employer may choose to define somebody as an independent contractor however if they are providing the direction the control setting the hours methods for performing the work and so forth it's likely an individual is an employee and should be covered by unemployment insurance benefits and insurance tax what we have found is that some employers have misclassified these individuals by accident or historically they have classified individuals as an independent contractor and we want to be able to provide education we want to get that cleared up for them we're not interested in creating a serious penalties or interests or so forth when those kind of circumstances come up we would why we prefer to do that through an education process however there are some businesses who have deliberately used this method and unfortunately there are some penalties associated with with that Act briefly I want to talk a little bit about the the unemployment insurance claim process in Iowa if a claim is determined eligible individual has enough wages we notified the employer plus all of the employers in what we referred to as the base period or approximately the last 18 months from the time that the person became unemployed all of those employers could be charged which means that if you have an employee who may be left to go to work somewhere else say six months ago you will be notified of that unemployment insurance claim and be given the opportunity to protest and you should protest if they've left to take another job or they were terminated for cause you should protest those we we don't want to charge claims incorrectly you'll also be asked if there's any vacation or severance separation pay in that notice we ask the to respond to that within ten days but notice was mailed and right that you do if there is a potentially disqualifying issue in there we will schedule an a fact-finding interview or an initial interview with you and the you former employee here what you have are some potential issues that could disqualify an individual from unemployment insurance voluntarily quitting a job without cause attributable to the employer refusing suitable employment discharge for misconduct and connection with the work a discharge for gross misconduct or an indictable offense but you to adequately search for a job or they're physically unable to work these topics we go into much greater detail in other presentations we'll be more than happy to discuss these with you at another time the adjudication process is that we will hold that fact-finding interview and that's a informal fact-finding investigation following that 10 day notice we'll have a conversation with you and the employee normally at the same time we issue an indetermination you have 10 days to appeal that you can't appeal it to an administrative law judge that is considered sworn testimony and that interview is recorded and that's normally the last opportunity to present evidence or statements and as well something you should keep in mind is that the second level or that appeal is public records so once that determination is issued the decision becomes public I give that warning only because there are some circumstances or some information that an employer does not want public and I just want to make sure you understand that that is the third level is the employment of peel board they will review what the administrative law judge has decided review the record and they'll either agree disagree reverse or they may remand that back to the law judge here are some contact information my information my personal desk line my email address Kerry O'Brien I mentioned is the tax chief for unemployment insurance and Ryan West he's our bureau's chief for unemployment insurance benefits all those lines correct go directly to their desks and I would - use those if you have any questions any concerns or anything doesn't seem quite right in your in your text or unemployment insurance benefits thank you very much for the opportunity and I think we're open for some Q&A yep well thank you Michael and Terry really appreciate your time today we do have some questions they're not showing up there but I'll just cover a mess they're here the first question that we had is probably Prince Harry and actually you - Michael it's from Wanda and she asked what can an employee do if the employer refuses to withhold Iowa tax if the employer refuses to withhold Iowa tax in their and they're required to if they have a compensation that is subject to Iowa withholding we would be interested in that information they can contact the department either through our our 800 number or they can email us the information as well but that's something that we would need to get involved in to make sure that they are following their requirements for Iowa withholding IWD would also like to know about that because more than likely they're misclassifying you as an independent contractor and we would reach out to that employer and let them know what their responsibilities are and actually the Aaron had also asked what happens if employers don't report new hires that's similar if they don't report new hires will do we don't the Department of Revenue does not have a reporting requirement sure I believe that's the maybe that centralized employee registry and that's not something that that revenue that we that we enforce that would be the folks with with the child support recovery unit that would be that would enforce that type of activity okay I do know this I don't believe that sometimes employed registry has any penalty for not reporting however I do know that in some states and Iowa is looking at it failure to report that could be considered an error in the tax rate notices or in plain for you to complete the the quarterly reports correctly so Iowa has not adopted that but some states have and they do charge a fine if they if there's not a match between the centralized employee registry in their quarterly taxes and there's a question here about how often is a typical Iowa holding tax table change well it's been at least since 2006 yeah there's there's not a cept time that we do change those the one that we have had again since April of 2006 so and that's that's the current one and can a person claim exemption hardship once a year does that process not sure sue which what you're referring to that I I'm not sure what what exactly you're referring to in that regard either so you go ahead and I've got some feedback there in the public comments and we can better answer that one you can also send us an email on that one as well you haven't asked do you have to have a signed paper copy of an Iowa w-4 on file if the employee elects to change they're withholding amount through a company's CSS database there is going to have to be a w-4 on file I believe are you asking can they do an electronic signature or something along that line that that would be acceptable as well they do have to have a w-4 on file and I think the acronym e SS might have come up does that mean employees self-service I don't understand here I with that limitation I'm not familiar with that I did see a question that came up does the resignation qualify as voluntarily quitting a job and what does cause attributed to the employer yes resident resigning is a voluntary quit however we'll look into the circumstances of the resignation there are circumstances for a person to to resign and still be eligible for insurance and we go into that other presentations but briefly for example if there was a change in the contract of hire for example you can move them from a salary position to a commission or maybe you've changed their shift from a first shift to a third shift and they're unable to do that there's other reasons but I can certainly go into that if there is a specific circumstance please use my email on my phone number how many more than happy to address any specific instances okay well I have one o'clock right at so I want to make sure that we get a very big thank you to both of our speakers today Michael and Terry thank you guys for sharing your time and expertise but that's we very very much appreciate it they have also generously offered to stay around and answer additional questions so we'll get through I think some of the other questions that we we have posted here today for those of you who have to leave please be sure to take our feedback survey I put a link in the comments box there we also want to thank all of you for attending today's webinar it was great to see such a great turnout as a reminder we will get this up on the website here within a week or two and also a reminder that next Thursday will be our next webinar we will be covering the topic will be small business big profits advanced Google Analytics tactics we're going to be inviting Megan horn from far reach technologies to do that presentation it's going to be a very very good webinar hold tight just one moment and I will put a link in there so that you can save your spot for that again we want to thank everybody and we will get back here to some more questions okay so sue had asked an employee and asked her to give him an exception because he was in partnership losing a parent and had asked that she was with whole Iowa taxes for the one paycheck okay get out you better send that one to us in an email yeah I'm not all right and we covered Sonia's question Carlin had asked as I what first of all and have a webinar on workers compensation insurance requirements I do not know that's an excellent question if you email me directly I can get you in touch with the acting commissioner for workers comp I do know they're into education as well so I'm sure that that's something they'd be interested in talking with you about just looking through here covered a lot of these I think there weren't too many questions there were several out of state questions folks if you want to send these questions directly to Terry and Michael that might be the best way but we will also take all of these collections we will also collect all of these questions and make them available and get you answers in a PDF document as well so even if we don't get yours specifically we'll be sure to answer that Terry your contact info my contact information my email address is Terry dot O'Neil that's o-n-e I ll at Iowa gov there you go and I also put the the other one yep yeah you are IDR