APA's Top Payroll Questions & Answers for 2020 - 57

If states have outstanding loans on January 1 of two consecutive
years and have not paid off the balance by November 10, they are
subject to a credit reduction on their Federal Unemployment Tax rate
until the balance has been paid off. Each year a loan continues to be
unpaid, the credit reduction increases by 0.3%, though states and
territories that have made an effort to keep their balances in check
have some opportunities to avoid the reduction (see The Payroll
Source®, §7.1-6).
Once a state has had outstanding FUA loans for several years,
additional types of credit reduction might also be added, including a
2.7% add-on and/or a Benefit Cost Rate (BCR) add-on. States and
territories may apply to the DOL for a waiver of the BCR add-on by July
1 of a tax year. For 2020, the total credit reduction for the Virgin Islands
would be 3.7%, unless the 0.7% BCR add-on is waived, in which case
it would be 3%.

Unemployment insurance for employees working in
two states

Q.

Our corporation is located in Kansas and some of our employees have
started working remotely from their resident state of Missouri doing
work for our company. I realize that unemployment is based on where
the employee works, but what are the guidelines pertaining working in
two states? Do unemployment insurance contributions and reporting
have to be provided to both states?

A.

State unemployment insurance tax is paid and reported to one state.
An employer that incorrectly determines the state having jurisdiction
for unemployment insurance purposes can mean the employer pays
double taxes in some states while paying penalties and interest for
failing to pay taxes in other states. Where employees perform services
all in one state, the employer pays unemployment taxes to that state;
you would therefore report and pay unemployment taxes for your

57

Unemployment Insurance

7

APA's Top Payroll Questions & Answers for 2020


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APA's Top Payroll Questions & Answers for 2020

Table of Contents for the Digital Edition of APA's Top Payroll Questions & Answers for 2020

Table of Contents
APA's Top Payroll Questions & Answers for 2020 - Intro
APA's Top Payroll Questions & Answers for 2020 - Cover1
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APA's Top Payroll Questions & Answers for 2020 - Table of Contents
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