money-on-the-tableEmployers leave millions every year on the table with overstated FICA, FUTA, and SUTA taxes.    When a merger, reorganization, spin-off or any transaction moving individuals from one FEIN to another FEIN, the number one goal is to get them on the payroll so they can be paid.  This can be tedious as each person’s information must be manually entered the first time.   Then the benefits the employees will receive are the next point of concern.

Eventually, the taxes are calculated, filed, and paid.    This is where huge overpayments in this area of FICA, FUTA, and SUTA occur.  In almost all instances, the FICA and FUTA taxable wage base can be continued by the successor employer reducing the taxable payroll reported.    The dollars represented by FICA only apply to the high wage earners but can lead to substantial overstatements of taxable income for the employer and employee.  The FUTA, although the base is $7000 across the board, can also lead to substantial overstated taxable wages and overpaid contributions.  Before the FUTA can be amended, the state agencies must have their records in order.

With the SUTA Dumping Legislation of 2004, all transactions or movement of employees need to be reported.   In many instances, the transfers of experience are mandatory if the predecessor (or prior) employer no longer has employees.   If the predecessor continues employment, the rules change a bit, and the transfer of experience is either optional, mandatory, or not permitted.  Once the transaction is determined either a partial or total, a review of the taxable wage base becomes important.

Over half the state unemployment agencies will allow the continuation of the taxable wage base for employees who were moved to another entity during the year if the transaction is deemed a partial but with total acquisitions, the wage base can transfer in almost all fifty states with the exception of only a few states.  The deadline to file amended quarterly contributions is three years from the effective date.    Corporate Cost Control can recover overpayments in the area of FICA, FUTA, and SUTA.


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