Texas Unemployment Obligation Assessment Tax

[FirstMOBC]

The Texas Workforc Commission reinstated the Unemployment Obligation Assessment Tax effective January 1st, 2011. This tax is paid quarterly along with your Sate Unemplohment Insurance tax and the rate varies by employer. How do we handle the SUI for TX in Power Church?

[Jeff]

You will need to create an employer liability item. These items are calculated with each check but do not add or take money away from the check amount. You will also need a tax table to calculate the amount of the tax.

The employer liability item is then added to each employee's paycheck. While adding the item you specify the tax table to use to calculate the tax.

To create the tax table in PowerChurch use the generic flat percentage tax table, put in the percentage assigned by state, check the option for a cap and specify what the cap is.

I took this information from: http://www.twc.state.tx.us/ui/tax/uitaxrates.html

[FirstMOBC]

Thank you for your help. The percentage of 2.7% is base on what? Is it just for you organization or general.

[FirstMOBC]

What Locality name should I use?

[FirstMOBC]

This is our 1st year of payroll so we do not calculate for prior years.

[NeilZ]

This is our 1st year of payroll so we do not calculate for prior years.

Thank you for your help. The percentage of 2.7% is base on what? Is it just for you organization or general.

What Locality name should I use?

A: this won't do that
B: I would think since this is an Employer's Liability (much like paying part of Social Security) and is added to an employee's payroll items, its based on the gross pay.
C: I'm assuming you need this when you're creating the Tax Type?? I suggest Texas SUI.

[Jeff]

I did leave out a step. The first step you need to go to payroll -> setup -> maintain tax types and add a new tax type. Select State Tax for the type and complete the other information.

You will need to talk to your local unemployment office for the rate. From what I found on the website, for your first year the rate is going to be the greater of the average unemployment for employers in your industry or 2.7% whichever is greater. Your local office should be able to help you determine the correct rate.

The 2.7% I used was just illustrative, I choose it because it was a percentage that was mentioned. I cannot stress enough getting local help from an accountant or your local employment office. The rules here can get complex. For example, it looks like a non-profit is subject to this tax if it has more than 4 employees. Because of the dual employment status of clergy, you would then need to determine if clergy should be counted in this number or not.