Although the Department hasn't extended the first quarter 2020 state unemployment insurance (SUI) tax reporting and payment deadline, employers with a first quarter SUI tax liability of $1,000 or more may elect to defer paying up to 60% of their total SUI tax liability to future quarters.

According to the Department's online Employer Handbook, to avoid assessment of interest on the deferred amount, employers must comply with the following requirements:

• The employer must not have any outstanding amounts for a prior quarter due on April 30. This includes interest, penalties, or other fees.
• The first quarter contribution and wage report and at least 40% of the first quarter tax liability must be received by April 30.
• The next 30% of the first quarter and all second quarter tax liability must be paid by July 31.
• The next 20% of the first quarter and all third quarter tax liability must be paid by October 31.
• The remaining 10% of the first quarter and all fourth quarter tax liability must be paid by January 31 of the next year.

Interest will not be assessed on the deferred amounts, provided the installment payments and subsequent quarter tax payments are made by the specified due dates. If there are any other amounts due on each of the specified due dates including interest and/or penalties, interest on the deferral amount will be assessed retroactive to April 30. All quarterly contribution and wage reports for quarters subsequent to the first quarter must be filed by the appropriate due dates.

Any deferral amounts not paid prior to July 31 will not be included in the employer's account balance for purposes of computing the SUI tax rate for the next calendar year. This could result in a higher employer SUI contribution rate.

To take advantage of the deferral option, employers must file the election electronically between February 15 and April 30 of the year they want to take the deferral. A new election must be filed each year the employer wishes to defer first quarter tax liability. Tax and wage reports must be filed electronically for all calendar quarters of the year elected for deferral.

For more information on Wisconsin SUI tax rates, see the Department's website.

Legislation seeks federal advance to keep SUI rates low in 2021

On April 15, 2020, Wisconsin Governor Evers signed into law AB 1038, instructing the Department of Workforce Development to seek advances from the US Department of Labor (DOL) to boost the SUI trust fund balance to a level that allows the lowest state UI experience rate schedule (Schedule D) to continue to be used for 2021.

Rate Schedule D has been in effect for calendar years 2018–2020

As we reported, Rate Schedule D, the lowest possible under Wisconsin UI law, has been in effect since 2018, with SUI tax rates ranging from 0.0% to 12.0% for small employers with less than $500,000 in taxable payroll annually, and 0.05% to 12.0% for larger employers. (EY Payroll Newsflash Vol. 20, #176, 10-31-2019.)

Rate Schedule D is in effect for any calendar year when, as of the preceding June 30, the state's UI trust fund has a balance of at least $1.2 billion.

See the state's COVID-19 website for more information.

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