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Frequently Asked Questions about 2012 Unemployment Tax
Tax Rates
Why did unemployment tax rates increase in 2012?
Florida law annually adjusts the unemployment tax rates for businesses. The annual rate process calculates the new rates based on a formula provided in Chapter 443 of the Florida Statutes.
Many employers experienced a rate increase for 2012 due to several factors:
- Economic conditions caused by the recession have created high unemployment and an unprecedented number of claims for unemployment compensation.
- Increased claims for unemployment compensation benefits depleted the Florida Unemployment Compensation Trust Fund, which is funded by the unemployment tax paid by Florida employers.
- As a result of high unemployment rates and the large amount of unemployment benefits paid to unemployed citizens, Florida - like many other states - is borrowing from the federal government. Currently Florida has borrowed $1.7 billion.
What is the minimum tax rate for 2012? Has the maximum tax rate changed?
The minimum tax rate for 2012 is .0151. Applied to the first $8,000 of wages, it calculates to $120.80 per employee. The maximum rate remains at 5.4 percent (.0540 X $8,000 = $432 per employee).
What is my tax rate?
The rate is on your Unemployment Tax Rate Notice (Form UCT-20). See the reverse side of your UCT-20 form for an explanation of how your tax rate was determined.
When will the unemployment tax rate increase take effect?
The tax rate increase is effective with wages paid beginning January 1, 2012. Employers should pay their fourth quarter 2011 taxes (due before January 31, 2012) at their current assigned tax rate.
Is every employer's tax rate increasing?
No. The initial tax rate of 2.7% and the maximum tax rate of 5.4% remain the same. However, the taxable payroll increases to $8,000 beginning with wages paid on January 1, 2012, so the tax due per employee for both the initial rate and the maximum rate will actually be greater in 2012.
Has the federally mandated, extended benefits program contributed to the overall tax rate increases?
No. The extended benefits are not being paid through the Florida Unemployment Compensation Trust Fund. Only reimbursable employers are held liable to pay back the extended benefits provided to unemployed citizens. Contributory accounts are not affected. Contact the Department of Economic Opportunity for more information about extended benefits.
Didn't legislation prevent higher unemployment tax rates in recent years?
Yes, a law passed in 2010 disregarded the trust fund factor for 2010 and 2011, thereby keeping the rate lower than what it otherwise would have been. The minimum tax rate increases for both 2011 and 2012 are a result of higher benefits paid and an increase in the number of employers at the maximum rate.
The 2012 Legislature reduced the increase in tax rates by extending the recoupment period for the trust fund from three years to five years. This change provided relief by reducing the multiplier and minimum tax rate for many employers.
Federal Interest Assessment
Will employers have to pay the assessment to cover federal interest in 2012?
All contributing employers owe a proportionate share of the federal interest payment on the funds borrowed to maintain benefit payments through a special annual assessment. For 2012, the payment is due on June 30, 2012. The Department sent notices for this assessment to employers in February 2012.
Installment Payment Option
How does the installment payment option work?
Employers can choose to pay by installments for the first three quarters in 2012 if they submit the Employer's Quarterly Report, Form UCT-6 (either paper or electronic), and payments on time and pay a $5 annual installment fee. Divide first quarter tax due into 4 equal payments, second quarter into 3 equal payments, and third quarter into 2 equal payments. There is no installment option for the fourth quarter.
You can choose the installment option for any or all of the first 3 quarters. You do not have to fill out any extra paperwork to pay by installments.
A law change in 2011 extended the installment payment option through the year 2014.
How can I participate in the installment option?
For the quarter in which you are first seeking to pay by installments, you must file your Employer's Quarterly Report, pay at least the minimum installment payment, and pay the $5 installment fee. You must submit all three items on time.
You are required to pay the installment fee only one time per calendar year. In each of the following quarters, you must timely file your Employer's Quarterly Report and pay at least the minimum installment payment. The Department will provide paper filers with coupons to use for installment payments.
Is the $5 installment fee due only when the first installment payment is paid for the year, even though it might be for the second quarter report?
Yes. The $5 is due in the quarter when the employer first participates in the installment plan for the year. The $5 is due only one time per calendar year.
How will the amount due for installment payments be determined?
Quarter ending March 31: Four equal payments. Tax Due on Line 5 (Employer's Quarterly Report) divided by 4 will give you the installment payment amounts. For the first quarter you are electing to pay installments, you must include the $5 fee on line 8.
Quarter ending June 30: Three equal payments. Tax Due on Line 5 (Employer's Quarterly Report) divided by 3 will give you the installment payment amounts.
Quarter ending September 30: Two equal payments. Tax Due on Line 5 (Employer's Quarterly Report) divided by 2 will give you the installment payment amounts.
You can use our online calculator to compute your installment payments.
Will I be notified if I am approved to pay by installments?
No. There is no formal notice of acceptance. If you file paper reports and you timely submit your unemployment tax report with the correct installment amount of tax and the $5 installment fee, the Department will send installment coupons before the due date of the next quarter’s report.
Electronic filers will not receive installment coupons. We offer an electronic due date reminder service to help you file on time. Paper filers can subscribe to this service, too.
Is there an approval process for the installment option?
There is no formal approval process. For the first quarter you want to pay in installments, you must file your unemployment tax report on time along with the minimum installment payment and the $5 installment fee.
Once installment payments have been set up for my account, do I have to pay by installments for the rest of the calendar year?
No. Each return and payment for a quarter stands on its own. Employers may pay the remaining installment payments earlier than the actual due dates. Employers may participate in the installment plan for one quarter, but pay the tax in full for other quarters.
When the installments overlap (for example: on December 31, payments are due for the first, second and third quarters), can I send a lump sum for the total amount due?
Yes. Paper filers should submit one payment for the final installments for all quarters, using the coupon that will be provided by the Department. E-filers should follow the instructions on the website.
Can I participate in the installment plan if I submit my UCT-6 late?
No. You must file the Employer's Quarterly Report (Form UCT-6) and pay the first installment and the $5 fee on time. If you file the first quarter report late, you will not be eligible for the installment plan for that quarter. However, you may choose the installment payment plan for later quarters if the reports are filed on time.
Will I be charged interest for paying by installments?
No, as long as you pay the annual $5 fee and submit your Employer's Quarterly Report and the minimum installment amount on time each quarter.