Federal Law closes SUTA Dumping Loopholes
A new federal law requires states to enact laws that would close loopholes that now allow devious employers to dodge some of their unemployment insurance taxes. The federal legislation is intended to make the unemployment insurance (UI) tax system fair for all employers nationwide.
Michigan's Legislature will consider changes to the state's UI law this fall. While many forms of SUTA dumping are already illegal under Michigan law, the changes will close any existing loopholes and allow the Unemployment Insurance Agency (UIA) to equally enforce laws to prevent SUTA dumping.
What UIA is Doing About SUTA Dumping
UIA is establishing a SUTA dumping team in its Tax Office. The team is already identifying employers who are engaging in the practice and is trying to determine its impact and how to approach the problem.
If not addressed soon, SUTA dumping could become more commonplace. Every employer should have a level playing field, where all are paying their fair share of unemployment taxes and are replenishing the trust fund to ensure that money is there to pay unemployment benefits to qualified and eligible unemployed workers.
For those who suspect SUTA Dumping
Employers, who have or think they have been taken in by someone's tax advice, should consider calling the UIA's Employer Customer Relations Hotline at 1-800-638-3994. Those who voluntarily request an audit determination will receive a substantial reduction in any penalties that may be assessed for SUTA dumping.
Reduce your possible penalty
If you suspect that you may have been involved in a SUTA dumping plan, you may avoid or reduce potential penalty and/or interest charges by voluntarily coming forward and contacting UIA. If you do not voluntarily step forward and UIA discovers you have been engaged in SUTA dumping, you risk paying a penalty equal to four times the amount of taxes you "saved" plus interest charges.
To voluntarily take part in a SUTA review, complete and send in the Application for SUTA Dumping Program (form UIA 1945), which is listed below.
Our Employer Customer Relations staff is also available to answer your questions about SUTA dumping and to provide you with more information. The hotline staff is available to answer your questions weekdays from 8:00 a.m. to 5:00 p.m. by dialing toll-free 1-800-638-3994.
Learn More About SUTA Dumping:
SUTA Dumping News Releases:
SUTA Dumping Legislation: