| Q. |
Do I have to pay Missouri unemployment tax? |
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| A. |
An entity (person, partnership, corporation, etc.) that employs a worker may become liable for Missouri state unemployment tax. Liability depends on several factors, including the type of entity and the type of work being performed. A discussion of how an entity becomes liable is in the Liability for Missouri Unemployment Tax section.
The Division uses the form "Report to Determine Liability Status" to gather information about whether an entity is liable for state unemployment tax or not. Even entities which are not liable must complete and return this form. The same information may be provided online at Online Registration for New Business <-- Register for Business Taxes Here.
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| Q. |
How do I get set up to pay state unemployment tax? |
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| A. |
To register with the Division, you should complete a "Report to Determine Liability Status" or the online registration (see above). If you are liable for state unemployment tax, the Division will send you an official written determination to that effect and you will receive "Quarterly Contribution and Wage Reports" on which to report your employees.
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| Q. |
What will my tax rate be? |
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| A. |
A new employer receives an assigned beginning tax rate based on its industrial classification. The current new employer rates are in a table in the Tax Rates section.
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| Q. |
Now that I have employees, what other agencies should I contact? |
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| A. |
The Missouri Business Portal is your single point of entry for business registration, filings, licenses and permits for doing business in the State of Missouri. Information is provided about how to research, start and register your business, ongoing requirements of various agencies and resources available.
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| Q. |
Where do I get a federal identification number? |
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The Internal Revenue Service issues federal employer identification numbers (EIN). Application may be made online at http://www.irs.gov/businesses/small/article/0,,id=102767,00.html OR you can request form SS-4 (EIN application) and instructions by calling the IRS at 1-800-TAX-FORM (1-800-829-3676).
The IRS also provides information on the Internet about who must have an EIN and how to get one. See the IRS website for other helpful employer tax information.
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| Q. |
What are the requirements for Federal unemployment tax? |
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| A. |
The reporting requirements of the Federal Unemployment Tax Act (FUTA) are similar to those of Missouri unemployment tax, but are not identical. Federal unemployment tax is administered by the Internal Revenue Service. Contact them for information on your liabilities for federal unemployment tax.
The IRS provides information on the Internet about federal unemployment tax.
You can contact the IRS by phone for publications and forms at 1-800-TAX-FORM (1-800-829-3676). Some useful publications for business owners are:
- Publication 937 - "Employment Taxes"
- Publication 15 - "Employer's Tax Guide "
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| Q. |
Is Missouri a "credit reduction state"? |
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| A. |
Employers in certain states do not receive the full 5.4 percent credit on their federal unemployment tax for paying state unemployment tax. These are called "credit reduction states." Missouri is not a credit reduction state.
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| Q. |
How can I reduce my tax rate? |
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A beginning rate is fixed for all new employers of the same industrial classification and cannot be affected by an employer. However, after two to three years an employer usually becomes eligible for an experience rate, which is based partly on the claims against the employer's account. An employer may attempt to keep an experience rate lower by maintaining stable employment (few layoffs) and by reviewing unemployment claims against its account to ensure they are not in error.
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