Report Name: Report to Determine Liability for Unemployment Insurance Tax (Form number 60-0126)
Who Are Liable Employers?
A liable employer is an employing unit that is required to report wages and pay unemployment insurance taxes to the Unemployment Insurance Division. All such employers fall into at least one of the following classifications:
1. Number of Workers or Amount of Wages
An employing unit becomes a liable employer retroactively to January 1 of any year in which it meets the following conditions:
a. One or More Employees
An employing unit becomes a liable employer retroactively to January 1 of any year in which it has one or more employees performing covered services for any portion of a day in at least 20 different calendar weeks. The 20 calendar weeks in which workers are employed need not be consecutive and the same individuals need not be employed in each such week. Workers in all establishments operated by the same employing unit must be included in the count. Part-time workers are counted the same as full-time workers.
b. Payroll of $1,500
An employing unit becomes a liable employer retroactively to January 1 of any year in which it has a total payroll of $1,500 or more in any calendar quarter for covered services.
c. Agricultural Laborers
An employing unit that paid cash wages of $20,000 or more to agricultural laborers in any quarter of the current or previous calendar year, or employed 10 or more workers in some portion of a day in 20 separate weeks in the current calendar year or the preceding calendar year is a liable employer.
d. Domestic Workers
An employing unit paying cash wages of $1,000 or more to domestic workers during any calendar quarter in the current calendar year or the preceding calendar year is a liable employer.
e. Nonprofit Organizations
Nonprofit religious, charitable, scientific, literary, or educational organizations, or organizations working for the prevention of cruelty to children or animals are liable employers if they have one or more employees performing covered services in some portion of a day in at least 20 different calendar weeks or have a total payroll of $1,500 or more in any calendar quarter for covered services. They may, however, elect to reimburse the Iowa Unemployment Insurance Trust Fund for any unemployment insurance benefits paid that are attributable to services in their employment, instead of paying a tax into the fund. Any of these organizations requesting consideration for reimbursable status must possess a 501(c)(3) Internal Revenue Service (IRS) tax exempt letter. Refer to Section 96.7(8,10) of the Iowa Code for additional information regarding requests for reimbursable status.
f. Governmental Entities
Governmental entities are required to reimburse Iowa Workforce Development for any unemployment insurance benefits paid that are attributable to services in their employment. However, they may elect to pay contributions if the election is made within the time specified by law. Cities, counties, school districts, townships and community college districts are governmental entities.
An employing unit becomes a liable employer by acquiring either the organization, the trade or business; or part of the organization, trade or business; or substantially all the assets of another liable employer. The acquisition need not be by purchase but can be rental, lease, inheritance, merger or mortgage foreclosure. The predecessor’s Iowa unemployment insurance account or part of the account including tax rate, indebtedness, and future claims may be transferred to the acquiring employer if the conditions in Section 96.7-2b of the Iowa Code are met. Liability starts with the date of acquisition. An employer planning to sell or otherwise transfer all or part of the employer’s business is liable to the acquiring employer for actual damages and attorney fees if the transferring employer fails to disclose or willfully discloses incorrect information to the employer regarding the unemployment insurance benefits charged against the transferring employer’s account. Upon any business acquisition, the new owner who wishes to retain any employees of the former owner should make a formal specific offer of work to each employee it wishes to retain. The offer should outline the duties, rate of pay, days of work and shift for that employee. Refusals should be reported to the nearest Workforce Development Center.
3. Federal Liability
Any employing unit that is liable for taxes under the Federal Unemployment Tax Act is also a liable employer under the Iowa law if it has one or more workers performing services in Iowa and such services are subject to the federal tax.
4. Elective Coverage
An employing unit that is not a liable employer may elect to become liable, thereby covering its workers under the Iowa Employment Security Law so that they may receive unemployment insurance benefits, if otherwise qualified and eligible. Employers liable through elective coverage become liable for taxes as of the effective date stated in the application. If an employing unit wishes to elect coverage under the Iowa Employment Security Law, the necessary forms may be obtained upon request from IWD's Tax Bureau by calling (515) 281-5339 or toll free (800) 972-2024. Election for coverage under the law is subject to approval by Iowa Workforce Development.
Where to Send Report: Submit online at www.myiowaui.org. Mail paper form to Iowa Workforce Development, Tax Bureau, 1000 E. Grand Ave., Des Moines, IA 50319-0209
Comments: First time employers file no later than one month after workers were first hired. If you purchase a business, you must file upon acquisition.
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