Michigan Employer Advisor: November 2023

Greetings, Employers!

November is the month when we recognize the bravery and sacrifice of those who have served in the military to protect our freedoms.

When veterans enter the workforce, though, they often run into barriers. Did you know there is a federal tax credit of up to $9,600 for employers who hire a veteran?

The Work Opportunity Tax Credit (WOTC) is available to private, for-profit employers who hire workers from targeted groups, such as veterans, who experience difficulty finding work. 

The Michigan Unemployment Insurance Agency (UIA) has a WOTC webpage with more details about the credit and a helpful video.

Speaking of WOTC, see the article below about the U.S. Department of Labor’s updated WOTC application form.

Also in this month’s issue, we have a reminder about filing missing Quarterly Wage/Tax reports, and important information for non-profits designated as reimbursing employers.

A reminder, too, to join the UIA’s monthly Employer Seminar webinar. We have one more scheduled this year on December 13 from 10 a.m. to noon. When you attend the seminar you’ll learn about the many aspects of unemployment insurance, MiWAM, filing reports, and more. Follow this link to sign up.

If you want to suggest an article or topic for a future edition of the Employer Advisor newsletter, or just want to tell us how much you enjoy reading it, please send a message to UIA-EmployerAdvisor@Michigan.gov. You can find past newsletters on the Employer Homepage at Michigan.gov/UIA.

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Now is the Time to File Any Missing Quarterly Reports Due to UIA

The Michigan Unemployment Insurance Agency (UIA) mailed in September a reminder to employers to file Quarterly Wage/Tax reports.

The Potential Tax Rate Increase Due to Missing Report(s) form was sent to employers missing a report from Sept. 30, 2022, through June 30, 2023. Failure to file these reports before the first week of December will result in an additional 3 percent increase to your 2024 tax rate.

To avoid the increase and additional late filing penalties, make sure you are up to date with your reports. Please note the UIA does not accept quarterly reports in paper form. File through your Michigan Web Account Manager (MiWAM) account; it’s fast, easy, and secure.

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Are You a Non-Profit Organization?

Generally, a non-profit organization is one whose purpose is either educational, religious, cultural, or scientific and is exempt from federal income taxes.

A church is the only religious organization that is truly exempt from unemployment taxes. All other non-profit organizations must register with the UIA. See the Internal Revenue Code Section 501(c)(3) for a definition of a non-profit and an explanation of the tax exemption.

There are two methods for reporting a business to the Michigan Unemployment Insurance Agency (UIA).

The first method is called contributing. A contributing employer files a Quarterly Wage/Tax Report, which is used to compute and pay unemployment insurance taxes based on an assigned tax rate. The tax rate is based on a formula that uses past unemployment of workers and the size of payroll as a measure of potential risk of unemployment. 

The second method is called reimbursing. A reimbursing employer files a Quarterly Wage Report but does not pay quarterly taxes to the UIA. If unemployment benefits are paid to former employees, the reimbursing employer must repay UIA, dollar-for-dollar, for unemployment benefits that have been paid out.

If you elect to be a reimbursing employer, you must submit the following documentation:

• A copy of your 501(c)(3) Determination issued from the IRS verifying your federal income tax exemption status.
• A security bond or irrevocable letter of credit equal to 4 percent of your annual gross payroll, if it is equal to or more than $100,000.

The documents can be attached at the time of registration or submitted within 30 days to:

Unemployment Insurance Agency
Tax Office – Reimbursing Unit
PO Box 8068
Royal Oak, MI 48068-8068

A non-profit organization can switch from being a contributing employer to being designated a reimbursing employer. It must notify UIA within 30 days of being found to be a liable employer, or not less than 30 days before the beginning of the calendar year in which the change will be effective.                        

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Countdown to the Launch of the UIA’s New Computer System

The Unemployment Insurance Agency has scheduled a Fall 2024 launch of the first phase of our new computer system that will serve employers and claimants.

The new system puts a high priority on ease of use and efficient design with the user in mind.

Employers will be the first group with live access to the system. Watch for updates as we develop the system.

Click on the video below for information.

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New WOTC Application, Bulk Upload Formats Now Available in MiWAM

Employers can once again submit Work Opportunity Tax Credit (WOTC) applications through their Michigan Web Account Manager (MiWAM) accounts.

The ETA Form 9061, available on the UIA’s website, was updated by the U.S. Department of Labor, requiring a temporary interruption in MiWAM for submitting applications.

The new form is shorter and is valid through May 31, 2026.

With the system changes completed, employers can once again submit one-off or bulk WOTC applications. File specifications for bulk uploading can be found in MiWAM.

If you have any questions, please contact the WOTC Unit at 313-456-2105 or WOTCUnit@Michigan.Gov.

Not familiar with WOTC? Go to Michigan.gov/WOTC for videos, infographics, brochure, links to forms, and more.