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For State Unemployment Reports, one important section is the unemployment taxable wages. Most employees are subject to State unemployment taxes until they reach the limit on wages that can be taxed via unemployment tax rates.
When eFiling Unemployment Reports, some states now look at individual wages and taxable/excess wages. The State may view the employee data from the report and calculate what taxable wages should be based on employee wages listed on the current report and any prior reports for the year. The filing may be rejected if the total reported taxable wages does not match what the State's system calculates. The State may or may not factor in out of state wages into this calculation as well as other factors.
Aatrix will notify you immediately if an unemployment eFiling is rejected by the State Agency, and will try to provide information on what the State is calculating the total taxable unemployment wages for the filing when that is the reason for the rejection. If the total taxable wages on the report is not matching the State's calculated total taxable wages, please check with the State Agency for information on how to correctly calculate unemployment taxable wages. This may involve looking at previous reports for the year to date as well as the current report and ensuring that each employee has the proper amount of taxable wages reported.
A few of the most common reasons for a difference in taxable wages are:
- A change to an employee's SSN, which if prior reports are not amended, would cause a reset in their taxable wage limit.
- If the upper limit is not setup properly within the accounting software.
- If there are out of state wages, the state may or may not credit out of state wages earned and taxed toward the upper limit. Please check with the State to find out if they take into account out of state wages.