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Fact Sheet 159 - Notice of Error in Reported Wages/Taxes
The Michigan Employment Security (MES) Act requires that employers file quarterly reports that include each employee’s name, social security number, and gross wages paid during the quarter. If a report is incomplete or contains errors, the Unemployment Insurance Agency (UIA) will notify the employer using Form UIA 1107, Notice of Error in Reported Wages/Taxes.
The Notice is not a determination and may not be protested, however, the employer will have 14 days from the mail date of the Notice to amend the report by supplying the missing information or correcting the error(s). In the case of an erroneous or incomplete report, it is recommended that the employer completes the needed corrections online through their MiWAM account. When using the file submission method to file an amended report, the employer must submit a completely new report that includes information that was correct on the original filing, plus the corrected information.
If the corrected report is not submitted to the Agency within 14 days of the mail date, the employer is subject to a $50 penalty. If the report is still not corrected or the report is submitted with errors, the following interest and penalties may apply:
- Interest will accrue on unpaid tax principal at the rate of 1% per month, computed daily.
- A Late Tax Report penalty of 10% of the tax due (minimum of $5.00 and a maximum of $25.00) will be charged when the Quarterly Wage/Tax Report(s) are filed after the due date.
- $50 wage penalty will be charged to an employer's account if any of the following occurs:
- If a Quarterly Wage/Tax Report is untimely filed after its due date.
- If UIA must estimate a missing past due report.
- If a report is timely filed but contains errors that remain uncorrected 14 days after notice of the error(s) has been provided by UIA.
- An additional $250 wage penalty is charged for each subsequent quarter that the Quarterly Wage/Tax Report is not filed.
Most Common Reasons That an Error Notice Is Generated
Typically, an error notice is generated as a result of a mathematical error, a misspelled name, or an incorrect or missing social security number or individual taxpayer identification number (ITIN). In case of mathematical errors, misspelled names, or erroneous social security numbers or ITINs, the employer can check their MiWAM account to determine where the error occurred. Access the error-locating tool, Yearly Wage Evaluation, (located under ACCOUNT SERVICES/Report and Payments).
If an employer receives an error notice for an invalid/incorrect social security number or ITIN and takes no action to correct the error, fines and penalties will continue to accrue until the employer provides the corrected information. It is the employer’s responsibility to ensure that all its employees have valid social security numbers or ITINs.
If an employer is unable to obtain missing or incomplete social security numbers or ITINs despite their best efforts, the following identifies ways that an employer may stop the accrual of additional penalties.
How to Stop Additional Penalties
If, after 14 days, an employer provides a Form I-9, Employment Eligibility Verification, or Form W-4, Employee’s Withholding Allowance Certificate, matching the number it provided to the Agency, that information can be used to stop additional penalties from accruing.
If the employer cannot provide a Form I-9 or W-4, the employer must contact the employee, or in the case of a former employee, attempt to contact the individual to obtain the information. If such efforts are unsuccessful, then the employer must submit a notarized affidavit attesting to the efforts made to obtain the information or provide a notarized affidavit from the former employee. The Notarized Affidavit can be used to establish reasonable cause for failure to provide the corrected information and can stop additional fines from accruing. However, penalties already imposed will not be waived.
What a Notarized Affidavit Must Contain
The employer or employee can provide an affidavit at any time. The timing of the submission, however, will determine when the penalties will stop accruing. The affidavit does not have to be submitted in a specific format but must be notarized and contain the following information:
For an employee’s affidavit:
• The person’s legal name, and whether the employee has a SSN
• Whether the person has applied for an Individual Taxpayer Identification Number (ITIN)
• Name of the employer
• Dates worked for the employer
• Statement as to whether the worker completed a state and federal W-4 with the employer
For an employer’s affidavit:
• Name of the employer
• Name and title of the person completing the affidavit
• UIA account number
• Dates individual worked for the employer
• Name(s) of the affected employee(s) listed on the Form UIA 1107
• A statement that the employer has reviewed the W-4s for each employee identified and is unable to locate a SSN or ITIN and has exhausted good faith efforts to identify the SSN or ITIN for each worker.
Affidavits should be mailed to:
Unemployment Insurance Agency
Tax Office Administration
3024 W Grand Boulevard, Suite 12-550
Detroit, MI 48202
For more information see Fact Sheet # 171, Frequently Asked Questions about Form 1107 - Notice of Error in Reported Wages/Taxes or contact UIA Employer Customer Service at 1-855-484-2636.