Navigating the complexities of the unemployment insurance tax system can be challenging for businesses operating in the state of Delaware. It’s crucial to understand the implications and nuances of the unemployment insurance tax, as it plays a significant role in financial planning and compliance. This comprehensive guide will delve into the details of the unemployment insurance tax in Delaware, providing valuable insights for businesses seeking to mitigate risks and ensure adherence to legal obligations.
The unemployment insurance tax in Delaware, commonly referred to as UI tax, is a state-mandated tax levied on employers. It serves as a financial buffer to support individuals who have lost their jobs through no fault of their own. By contributing to the unemployment insurance trust fund, employers help provide temporary financial assistance to eligible individuals, enabling them to meet basic needs during their job search. The UI tax rate varies depending on the industry and the employer’s experience rating, which is a measure of the employer’s history of unemployment claims. Understanding these factors is essential for businesses to effectively manage their UI tax obligations.
Furthermore, the UI tax in Delaware is subject to regular audits by the state’s Department of Labor. These audits aim to ensure that employers are correctly classifying employees, accurately reporting wages, and timely remitting UI taxes. Failure to comply with UI tax regulations can result in significant penalties and interest charges. Therefore, it is imperative for businesses to establish robust internal controls and maintain accurate records to minimize the risk of non-compliance. By staying informed about the latest UI tax guidelines and seeking professional advice when needed, businesses can navigate the complexities of the system effectively and fulfill their legal responsibilities.
Filing Unemployment Insurance Tax Returns in Delaware
Employers in Delaware are required to file unemployment insurance tax returns on a quarterly basis. The due dates for these returns are as follows:
- First quarter: April 30
- Second quarter: July 31
- Third quarter: October 31
- Fourth quarter: January 31
Returns can be filed online through the Delaware Department of Labor’s website or by mail. If you are filing by mail, you must use the following address:
Delaware Department of Labor
Division of Unemployment Insurance
P.O. Box 1801
Wilmington, DE 19899
Completing the Unemployment Insurance Tax Return
The unemployment insurance tax return is a two-page form. The first page includes information about the employer, including the business name, address, and federal employer identification number. The second page includes information about the wages paid to employees and the amount of unemployment insurance tax owed.
To complete the unemployment insurance tax return, you will need the following information:
- Your federal employer identification number
- The total wages paid to employees during the quarter
- The amount of unemployment insurance tax owed
Calculating the Amount of Unemployment Insurance Tax Owed
The amount of unemployment insurance tax owed is calculated by multiplying the total wages paid to employees by the unemployment insurance tax rate. The unemployment insurance tax rate in Delaware is 2.7%. However, employers can qualify for a reduced rate based on their experience with unemployment claims. The reduced rates are as follows:
| Experience Rating | Rate |
|---|---|
| 0.1% – 0.99% | 0.5% |
| 1.00% – 1.99% | 1.0% |
| 2.00% – 2.99% | 1.5% |
| 3.00% – 3.99% | 2.0% |
| 4.00% – 4.99% | 2.5% |
To calculate your experience rating, you will need to divide the total amount of unemployment benefits paid to your former employees by the total wages paid to employees during the base period. The base period is the first four of the last five completed calendar quarters.
Once you have calculated your experience rating, you can use the table above to determine your unemployment insurance tax rate. The table shows that employers with a good experience rating can qualify for a reduced rate.
Filing the Unemployment Insurance Tax Return
Once you have completed the unemployment insurance tax return, you can file it online or by mail. If you are filing online, you can use the Delaware Department of Labor’s website. If you are filing by mail, you must use the address provided above.
The unemployment insurance tax return must be postmarked by the due date in order to be considered timely filed. If you file your return late, you may be subject to penalties and interest charges.
Understanding the Unemployment Insurance Tax Base
The unemployment insurance (UI) tax base is the amount of wages and salaries subject to UI tax. Employers are required to pay UI taxes on wages paid to employees up to a certain limit. The UI tax base is generally determined by state law and can vary from state to state.
In Delaware, the UI tax base is $18,000 for 2023. This means that employers are required to pay UI taxes on the first $18,000 of wages paid to each employee. The UI tax base is adjusted annually based on the average annual wage in Delaware.
Employees Exempt from UI Tax
Not all employees are subject to UI tax. The following types of employees are exempt from UI tax in Delaware:
- Employees who earn less than $1,500 in a calendar quarter
- Agricultural laborers
- Domestic workers
- Certain students
- Employees of certain non-profit organizations
- Employees of the federal government
- Employees of state and local governments
UI Tax Rates
The UI tax rate in Delaware is 2.5%. This means that employers are required to pay 2.5% of the first $18,000 of wages paid to each employee. The UI tax rate is used to fund the state’s unemployment insurance program, which provides benefits to unemployed workers.
How to Calculate UI Tax
To calculate the amount of UI tax you owe, you need to multiply the UI tax rate by the taxable wages paid to each employee. For example, if you pay an employee $20,000 in wages, you would owe $450 in UI taxes ($20,000 x 2.5%).
When to Pay UI Taxes
UI taxes are due on a quarterly basis. The due dates are April 30, July 31, October 31, and January 31. You can file your UI tax returns online or by mail.
If you fail to pay your UI taxes on time, you may be subject to penalties and interest charges.
Additional Information about UI Taxes in Delaware
For more information about UI taxes in Delaware, you can visit the website of the Delaware Department of Labor.
UI Tax Rates by State
The following table shows the UI tax rates for all 50 states and the District of Columbia:
| State | UI Tax Rate |
|---|---|
| Alabama | 0.5% |
| Alaska | 1.3% |
| Arizona | 2.0% |
| Arkansas | 2.0% |
| California | 3.4% |
| Colorado | 2.2% |
| Connecticut | 2.5% |
| Delaware | 2.5% |
| District of Columbia | 2.9% |
| Florida | 2.7% |
Paying Unemployment Insurance Taxes
Delaware employers must pay unemployment insurance (UI) taxes to the state’s Division of Unemployment Insurance (DUI).
Who Must Pay UI Taxes?
All employers with one or more employees are required to pay UI taxes. This includes:
- For-profit businesses
- Nonprofit organizations
- Government agencies
- Sole proprietorships
- Partnerships
- Limited liability companies (LLCs)
Tax Rate and Wage Base
The UI tax rate for Delaware employers is 2.5%, which is among the lowest in the country. The tax is applied to the first $15,000 of wages paid to each employee during a calendar year.
| Wage Paid | Tax Owed |
|---|---|
| $0 – $15,000 | 2.5% of wages paid |
| Over $15,000 | $375 |
Filing and Payment Deadlines
UI tax returns and payments are due quarterly. The deadlines are as follows:
- January 31 (for the fourth quarter of the previous year)
- April 30 (for the first quarter of the current year)
- July 31 (for the second quarter of the current year)
- October 31 (for the third quarter of the current year)
Filing Online
Employers can file their UI tax returns and make payments online through the DUI’s e-Services portal. To register for e-Services, visit the DUI website at https://ui.delawareworks.com/eservices/.
Other Important Information
Exemptions
Certain employers are exempt from paying UI taxes, including:
- Churches and other religious organizations
- Schools and other educational institutions
- Governments and governmental agencies
Penalties for Late Filing or Payment
Employers who fail to file their UI tax returns or make payments on time may be subject to penalties and interest charges.
Audits
The DUI conducts audits of employer records to ensure compliance with UI laws. Employers should keep accurate records of all wages paid to employees.
Contact Information
For more information about unemployment insurance taxes in Delaware, employers can contact the Division of Unemployment Insurance at:
Division of Unemployment Insurance
P.O. Box 9901
Wilmington, DE 19809
(302) 761-8446
Extensions and Late Payments
Extensions
Employers may request an extension of time to file their unemployment insurance tax return. To request an extension, employers must submit Form UI-100, “Extension of Time to File Unemployment Insurance Tax Return,” to the Division of Unemployment Insurance (DUI) by the original due date of the return. The DUI may grant an extension of up to 60 days. Employers who are granted an extension must still pay their unemployment insurance taxes by the original due date.
Employers who need more than 60 days to file their return may request an additional extension of up to 60 days by submitting Form UI-100S, “Request for Additional Extension of Time to File Unemployment Insurance Tax Return.” The DUI will only grant an additional extension if the employer can show good cause for needing the additional time.
Late Payments
Employers who fail to file their unemployment insurance tax return or pay their taxes by the due date will be subject to late payment penalties. The late payment penalty is 5% of the unpaid taxes for each month or fraction of a month that the return or payment is late, up to a maximum of 25%. In addition, employers may be subject to interest charges on the unpaid taxes.
The DUI may waive the late payment penalty if the employer can show that the late payment was due to reasonable cause. To request a waiver of the late payment penalty, employers must submit Form UI-101, “Request for Waiver of Late Payment Penalty,” to the DUI.
The following are examples of reasonable cause for late payment:
- The employer was unable to file the return or make the payment due to a natural disaster.
- The employer was unable to file the return or make the payment due to a sudden and unexpected illness or disability.
- The employer was unable to file the return or make the payment due to a change in accounting systems.
The DUI will consider all of the facts and circumstances when determining whether to grant a waiver of the late payment penalty.
Interest Charges
Employers who fail to pay their unemployment insurance taxes by the due date will be subject to interest charges on the unpaid taxes. The interest rate is determined by the Delaware State Treasurer and is subject to change. The current interest rate is 1% per month or fraction of a month that the taxes are unpaid.
The DUI will send a notice to employers who are subject to interest charges. The notice will state the amount of interest owed and the due date for the payment. Employers who fail to pay the interest charges by the due date will be subject to additional penalties.
The following table provides a summary of the late payment penalties and interest charges for unemployment insurance taxes in Delaware:
| Late Payment Penalty | Interest Charges |
|---|---|
| 5% of the unpaid taxes for each month or fraction of a month that the return or payment is late, up to a maximum of 25% | 1% per month or fraction of a month that the taxes are unpaid |
Electronic Filing for Unemployment Insurance Taxes
Benefits of Electronic Filing
Filing unemployment insurance (UI) taxes electronically offers several advantages, including:
- Reduced paper usage and mailing costs
- Faster processing and refund times
- Enhanced security and reduced risk of errors
- Convenient and easy to use
Eligibility for Electronic Filing
To file UI taxes electronically, businesses must:
- Have a valid Employer Identification Number (EIN)
- Be registered with the Delaware Division of Unemployment Insurance (DUI)
- Have an internet connection and a compatible browser
Getting Started with Electronic Filing
To get started with electronic filing, businesses should:
- Visit the DUI website at https://ui.delaware.gov/
- Create an online account and register as an electronic filer
- Download and install the required software
Filing UI Taxes Online
Once registered, businesses can file UI taxes online by following these steps:
- Log in to the DUI website
- Select the “File Taxes” option
- Enter the necessary information and upload the required files
- Review and submit the return
Supported File Formats
The DUI accepts the following file formats for electronic filing:
| File Format | Description |
|---|---|
| FUCX | Federal Unemployment Insurance Return |
| UCCX | Combined Federal/State Unemployment Insurance Return |
Filing Deadlines
The deadline for filing UI taxes electronically is the same as the deadline for paper filing. Businesses should consult the DUI website or contact the DUI directly for specific deadlines.
Payment Options
Electronic filers can pay their UI taxes online using the following methods:
- Electronic Funds Transfer (EFT)
- Credit card
Troubleshooting
If businesses encounter any technical difficulties while filing UI taxes electronically, they should contact the DUI at 302-761-8446.
Additional Information
For more information on electronic filing for unemployment insurance taxes in Delaware, businesses can visit the DUI website or contact the DUI directly.
Penalties and Interest on Unpaid Unemployment Taxes
Failing to file and pay unemployment insurance (UI) taxes on time can result in penalties and interest charges. These penalties and interest are imposed by the Delaware Division of Unemployment Insurance (DUI) and can accumulate quickly, adding to your overall tax liability.
Late Filing Penalty
If you fail to file your UI tax return by the due date, you will be subject to a late filing penalty. The penalty is 5% of the unpaid tax for each month, or fraction of a month, that the return is late. The maximum penalty is 25% of the unpaid tax.
Late Payment Penalty
If you fail to pay your UI taxes by the due date, you will be subject to a late payment penalty. The penalty is 1% of the unpaid tax for each month, or fraction of a month, that the tax is late. The maximum penalty is 10% of the unpaid tax.
Interest on Unpaid Taxes
In addition to penalties, you will also be charged interest on any unpaid UI taxes. The interest rate is set by the DUI and is currently 1% per month. Interest accrues from the due date of the tax until it is paid in full.
Penalties for Fraudulent Reporting
If the DUI determines that you have fraudulently reported or underreported your UI tax liability, you may be subject to additional penalties. These penalties can include:
* A civil penalty of up to $1,000 for each fraudulent or underreported return
* Criminal prosecution, which can result in fines and imprisonment
Penalties for Failure to File or Pay
In addition to the penalties and interest described above, the DUI may also take other enforcement actions against you for failure to file or pay your UI taxes. These actions can include:
* Seizing your property
* Suspending your business license
* Issuing a warrant for your arrest
Other Consequences of Unpaid Unemployment Taxes
In addition to the financial penalties and enforcement actions described above, there are other consequences of failing to pay your UI taxes. These consequences can include:
* Damage to your credit rating
* Difficulty obtaining financing
* Loss of your business license
* Reputational damage
Avoiding Penalties and Interest
The best way to avoid penalties and interest on unpaid UI taxes is to file and pay your taxes on time. If you are experiencing financial hardship, you may be able to apply for a hardship waiver from the DUI. However, it is important to note that hardship waivers are granted on a case-by-case basis and are not guaranteed.
Contact the Division of Unemployment Insurance
If you have any questions about unemployment insurance taxes or penalties, you should contact the Delaware Division of Unemployment Insurance. The DUI can provide you with information about your tax liability, help you file your return, and assist you with any other UI-related issues.
| Penalty | Amount |
|---|---|
| Late Filing Penalty | 5% of unpaid tax per month, maximum 25% |
| Late Payment Penalty | 1% of unpaid tax per month, maximum 10% |
| Interest on Unpaid Taxes | 1% per month |
| Civil Penalty for Fraudulent Reporting | Up to $1,000 per fraudulent return |
Unemployment Insurance Tax Exemptions and Exclusions
Covered Employers
Generally, employers who pay wages of $1,500 or more in a calendar quarter are required to pay unemployment insurance tax. This applies to both cash wages and non-cash compensation, such as room and board.
Exempt Employers
The following types of employers are exempt from paying unemployment insurance tax:
* The United States government
* State and local governments
* Nonprofit organizations
* Churches and religious organizations
* Educational institutions
* Hospitals
* Agricultural employers who employ fewer than 10 workers
* Domestic workers who earn less than $1,000 per year
* Certain family members who work for their close relatives
Exempt Wages
The following types of wages are exempt from unemployment insurance tax:
* Wages paid to employees under the age of 18
* Wages paid to employees who are not residents of Delaware
* Wages paid to employees who are enrolled in a full-time educational program
* Wages paid to employees who are receiving unemployment benefits
* Wages paid to employees who are self-employed
12. Exemptions for Certain Nonprofit Organizations
Certain nonprofit organizations are exempt from paying unemployment insurance tax if they meet the following criteria:
* The organization is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code.
* The organization has filed a Form 501(c)(3) with the Internal Revenue Service.
* The organization has fewer than 20 employees who are not exempt from unemployment insurance tax.
* The organization’s primary purpose is not to provide commercial or industrial services.
Types of Nonprofit Organizations That May Qualify
* Charitable organizations
* Religious organizations
* Educational organizations
* Scientific organizations
* Literary organizations
* Artistic organizations
* Historical organizations
* Volunteer fire companies
* Fraternal organizations
Additional Requirements
To maintain their exemption, nonprofit organizations must:
* Submit an annual report to the Delaware Department of Labor
* Report wages paid to employees who are not exempt from unemployment insurance tax
* Keep accurate records of employee wages and hours worked
Table of Exempt Nonprofit Organizations
| Type of Organization | Criteria |
|—|—|
| Charitable | Must be exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code |
| Religious | Must be organized for religious purposes |
| Educational | Must be organized to provide educational services |
| Scientific | Must be organized to conduct scientific research |
| Literary | Must be organized to promote literature |
| Artistic | Must be organized to promote art |
| Historical | Must be organized to preserve historical artifacts |
| Volunteer fire companies | Must be organized to provide fire protection services |
| Fraternal organizations | Must be organized to provide social and fraternal benefits to members |
Unemployment Insurance Tax Rate Schedules
SUTA Tax Rates
The Federal Unemployment Tax Act (FUTA) imposes a 6.0% tax on the first $7,000 of wages paid to each employee. Delaware employers are required to pay a minimum of 5.4% in state unemployment insurance tax (SUTA) on the first $15,000 of wages paid to each employee. The maximum SUTA tax rate is 5.9% The actual SUTA tax rate for each employer is determined by their experience rating.
Experience Rating
Delaware’s SUTA tax system is experience rated, which means that employers with a history of low unemployment claims will pay lower tax rates than employers with a history of high unemployment claims. The experience rating system is designed to encourage employers to stabilize employment and reduce unemployment claims.
How Experience Ratings Are Calculated
Experience ratings are calculated using a formula that takes into account the following factors:
- The employer’s payroll
- The employer’s unemployment claims history
- The state’s average unemployment rate
Employer Accounts
Each employer has an unemployment insurance account with the Delaware Unemployment Insurance Division. The employer’s tax payments are deposited into this account, and the employer’s unemployment claims are paid out of this account.
Tax Rate Schedules
The following table shows the SUTA tax rate schedules for Delaware employers:
| Experience Rating | Tax Rate |
|---|---|
| 0.1% – 1.0% | 5.4% |
| 1.1% – 2.0% | 5.5% |
| 2.1% – 3.0% | 5.6% |
| 3.1% – 4.0% | 5.7% |
| 4.1% – 5.0% | 5.8% |
| 5.1% or higher | 5.9% |
New Employers
New employers are assigned a temporary experience rating of 5.4%. After the employer has been in business for at least one year, the employer’s experience rating will be recalculated based on the employer’s unemployment claims history.
Multi-State Employers
Multi-state employers must file unemployment insurance tax returns in each state in which they have employees. The employer’s experience rating in each state will be determined by the employer’s unemployment claims history in that state.
SUTA Tax Exemptions
The following types of wages are exempt from SUTA tax:
- Wages paid to employees who are under the age of 18
- Wages paid to employees who are over the age of 65
- Wages paid to employees who are disabled
- Wages paid to employees who are unemployed
- Wages paid to employees who are self-employed
SUTA Tax Penalties
Employers who fail to file their SUTA tax returns on time or who fail to pay their SUTA taxes in full may be subject to penalties.
More Information
For more information about unemployment insurance tax in Delaware, please visit the Delaware Unemployment Insurance Division website.
Withholding Unemployment Insurance Taxes
Employers in Delaware are required to withhold unemployment insurance (UI) taxes from their employees’ wages. The amount of UI taxes withheld depends on the employee’s gross wages and the employer’s experience rating.
The following is a guide to withholding UI taxes in Delaware:
1. Determine the employee’s gross wages
The employee’s gross wages include all wages, salaries, tips, bonuses, and commissions. Wages are considered gross wages even if they are not subject to other payroll taxes, such as Social Security or Medicare taxes.
2. Calculate the taxable wage base
The taxable wage base is the maximum amount of wages that are subject to UI taxes. The taxable wage base is set by the state legislature and changes each year.
For 2023, the taxable wage base is $15,000.
3. Calculate the employee’s UI tax rate
The employee’s UI tax rate depends on the employer’s experience rating. The experience rating is a measure of the employer’s history of unemployment claims. Employers with a high experience rating pay a lower UI tax rate than employers with a low experience rating.
The following table shows the UI tax rates for 2023:
| Employer’s experience rating | UI tax rate |
|---|---|
| 0.1% to 2.7% | 0.5% |
| 2.8% to 5.4% | 1.0% |
| 5.5% to 8.1% | 1.5% |
| 8.2% to 10.8% | 2.0% |
| 10.9% to 13.5% | 2.5% |
| 13.6% to 16.2% | 3.0% |
| 16.3% to 18.9% | 3.5% |
| 19.0% to 21.6% | 4.0% |
| 21.7% to 24.3% | 4.5% |
| 24.4% to 27.0% | 5.0% |
4. Calculate the amount of UI taxes withheld
To calculate the amount of UI taxes withheld, multiply the employee’s gross wages by the employee’s UI tax rate.
5. Withhold the UI taxes from the employee’s wages
The amount of UI taxes withheld is deducted from the employee’s wages before the employee is paid.
6. Remit the UI taxes to the state
Employers are required to remit the UI taxes withheld from their employees’ wages to the Delaware Department of Labor. The UI taxes must be remitted on a quarterly basis.
7. Keep records of UI tax withholding
Employers are required to keep records of the UI taxes withheld from their employees’ wages. These records must be kept for at least four years.
8. File an annual unemployment insurance tax return
Employers are required to file an annual unemployment insurance tax return with the Delaware Department of Labor. The return must be filed by January 31st of the following year.
9. Penalties for late UI tax payments
Employers who fail to remit the UI taxes withheld from their employees’ wages on time may be subject to penalties and interest.
10. Additional information
For more information about withholding UI taxes in Delaware, please visit the Delaware Department of Labor’s website.
Calculating Unemployment Insurance Tax Liability Formulations
1. Taxable Wage Base
The taxable wage base is the maximum amount of wages subject to unemployment insurance tax. In Delaware, the taxable wage base is adjusted annually based on state average wages. For 2023, the taxable wage base is $16,000.
2. Tax Rate
The unemployment insurance tax rate is set by the state and is expressed as a percentage of taxable wages. In Delaware, the standard tax rate is 2.5%.
3. Taxable Wages
Taxable wages include all wages paid to employees, including regular wages, overtime pay, bonuses, commissions, and tips. Excluded from taxable wages are:
- Wages paid to employees under the age of 18.
- Wages paid to employees who are not covered by the unemployment insurance law.
- Wages paid to employees who are exempt from unemployment insurance tax.
4. Tax Liability
An employer’s unemployment insurance tax liability is calculated by multiplying the taxable wages by the tax rate. The formula is:
Tax Liability = Taxable Wages * Tax Rate
Example:
An employer pays an employee $10,000 in taxable wages. The employer’s unemployment insurance tax liability is calculated as follows:
Tax Liability = $10,000 * 2.5% = $250
5. Reporting and Payment
Employers are required to file quarterly unemployment insurance tax returns and make payments to the Delaware Department of Labor. The due dates for reporting and payment are:
- First quarter: April 30
- Second quarter: July 31
- Third quarter: October 31
- Fourth quarter: January 31
6. Employer Account Number
Each employer is assigned an employer account number by the Delaware Department of Labor. This number must be included on all unemployment insurance tax returns and payments.
7. Online Services
The Delaware Department of Labor offers a variety of online services to employers, including the ability to:
- File unemployment insurance tax returns
- Make payments
- View account information
- Manage employee records
8. Audits
The Delaware Department of Labor may audit an employer’s unemployment insurance tax records to ensure compliance with the law.
9. Penalties
Employers who fail to file unemployment insurance tax returns or make payments on time may be subject to penalties.
10. Exemptions
Certain employers are exempt from paying unemployment insurance taxes. These include:
- Employers who employ fewer than four employees.
- Employers who are covered by a private unemployment insurance plan that has been approved by the Delaware Department of Labor.
- Employers who are exempt from unemployment insurance under federal law.
11. Voluntary Coverage
Employers who are not required to pay unemployment insurance taxes may voluntarily elect to do so. Voluntary coverage provides unemployment benefits to employees who are laid off or terminated from their jobs.
12. Reimbursable Employers
Reimbursable employers are employers who pay unemployment insurance taxes only on their own wages. Reimbursable employers are not required to pay unemployment insurance taxes on the wages of their employees.
13. Successor Employers
A successor employer is an employer who acquires all or part of the business of another employer. Successor employers are liable for the unemployment insurance tax obligations of the previous employer.
14. Merger or Consolidation
When two or more employers merge or consolidate, the resulting employer is liable for the unemployment insurance tax obligations of all of the merged or consolidated employers.
15. Dissolution or Termination
When an employer dissolves or terminates its business, the employer must file a final unemployment insurance tax return and pay any outstanding taxes.
16. Extended Benefits
Extended benefits are additional unemployment benefits that are available to unemployed workers who have exhausted their regular unemployment benefits. Extended benefits are paid when the state unemployment rate is high.
In Delaware, extended benefits are available for up to 13 weeks. The duration of extended benefits is determined by the state’s unemployment rate. The table below shows the duration of extended benefits for different unemployment rates:
| Unemployment Rate | Duration of Extended Benefits |
|---|---|
| 6.5% or higher | 13 weeks |
| 6.0% – 6.4% | 11 weeks |
| 5.5% – 5.9% | 9 weeks |
| 5.0% – 5.4% | 7 weeks |
| Under 5.0% | No extended benefits |
17. Non-Profit Organizations
Non-profit organizations are required to pay unemployment insurance taxes if they employ four or more employees. The tax rate for non-profit organizations is 0.5%.
18. Governmental Entities
Governmental entities are not required to pay unemployment insurance taxes. However, governmental entities may voluntarily elect to do so.
19. Agricultural Employers
Agricultural employers are required to pay unemployment insurance taxes if they employ 10 or more employees. The tax rate for agricultural employers is 1.0%.
Employer Account Numbers for Unemployment Insurance Taxes
In the state of Delaware, employers are required to register for an unemployment insurance (UI) account number to meet their tax obligations under the Unemployment Insurance Law. This account number serves as a unique identifier for each employer and is essential for the administration and collection of UI taxes.
How to Obtain an Employer Account Number
Employers can obtain an employer account number by registering with the Delaware Department of Labor (DOL), Division of Unemployment Insurance (DUI). The registration process can be completed online, by mail, or by phone.
Required Information for Registration
When registering for an employer account number, employers must provide the following information:
- Business name
- Business address
- Federal Employer Identification Number (FEIN)
- Contact person
- Contact information (phone number and email address)
- Estimated number of employees
- Payroll schedule
Types of Employer Account Numbers
There are two types of employer account numbers in Delaware:
- Standard Employer Account Number: This is the most common type of account number and is assigned to employers who are not subject to experience rating.
- Experience-Rated Employer Account Number: This type of account number is assigned to employers who have been in business for at least two years and meet certain criteria, including maintaining a stable workforce and paying UI taxes on time.
Experience-rated employers may be eligible for reduced UI tax rates based on their claims history.
Employer Responsibilities
Employers with an employer account number are responsible for:
- Filing UI tax returns and paying taxes on a timely basis
- Reporting employee wages and hours worked
- Maintaining payroll records for at least three years
- Responding to requests for information from the DUI
Penalties for Noncompliance
Failure to comply with UI laws and regulations can result in penalties, including fines, interest, and potential disqualification from receiving UI benefits.
Change of Business Information
Employers are required to notify the DUI of any changes in business information, such as name, address, or contact person. This can be done by submitting a Change of Business Information form.
Closure of Business
Employers who are closing their business must notify the DUI and file a final UI tax return. The final return should be filed within 30 days of the business closure date.
Contact Information
For more information on employer account numbers, employers can contact the Delaware Department of Labor, Division of Unemployment Insurance at (302) 761-8446 or visit their website at https://ui.delawareworks.com.
Subsections
17. Employer Experience Rating
In Delaware, employers with an experience-rated employer account number may be eligible for reduced UI tax rates based on their claims history. The DUI uses the following factors to determine an employer’s experience rating:
- Employer’s claims history
- Industry average claims rate
- Employer’s size and payroll
The DUI assigns employers a tax rate code based on their experience rating. The tax rate code determines the percentage of wages on which an employer must pay UI taxes.
Employers with a favorable claims history may be eligible for a lower tax rate code, while employers with a higher claims history may be assigned a higher tax rate code.
The following table provides a summary of the tax rate codes and corresponding tax rates:
| Tax Rate Code | Tax Rate |
|---|---|
| A | 0.1% |
| B | 0.2% |
| C | 0.3% |
| D | 0.4% |
| E | 0.5% |
| F | 0.6% |
| G | 0.7% |
| H | 0.8% |
| I | 0.9% |
| J | 1.0% |
Employers can improve their experience rating by reducing their claims history. This can be done by:
- Implementing policies to prevent layoffs
- Providing employee training and development
- Maintaining a stable workforce
Delaware Unemployment Insurance Tax for Non-Profit Organizations
Non-profit organizations in Delaware are subject to unemployment insurance (UI) tax, but they may be eligible for certain exemptions.
Nonprofit Organization Definition
Under Delaware law, a nonprofit organization is defined as a religious, charitable, educational, or scientific organization that is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. To be eligible for the UI tax exemption, the organization must meet all of the following requirements:
- Be organized and operated exclusively for religious, charitable, educational, or scientific purposes.
- Not engage in any substantial unrelated business activities.
- Have gross income that does not exceed $250,000 in any taxable year.
Registration and Reporting Requirements
Nonprofit organizations that are not exempt from UI tax must register with the Delaware Division of Unemployment Insurance (DUI). The registration process involves filing Form UI-100, Application for Unemployment Insurance Account Number. Once registered, the organization must file quarterly UI tax returns on Form UI-110, Quarterly Return of Unemployment Insurance Contributions.
Tax Rates
The UI tax rate for nonprofit organizations is 2.7%, effective January 1, 2023. The tax is calculated on the first $14,600 of wages paid to each employee in a calendar year.
Exemptions
In addition to the general exemption for organizations with gross income of less than $250,000, the following types of nonprofit organizations are exempt from UI tax:
- Religious organizations
- Educational institutions
- Hospitals
- Public charities
- Volunteer fire companies
Filing Deadlines
Quarterly UI tax returns are due on the following dates:
| Quarter | Due Date |
|---|---|
| First Quarter | April 30 |
| Second Quarter | July 31 |
| Third Quarter | October 31 |
| Fourth Quarter | January 31 |
Penalties for Late Filing or Non-Payment
Late filing of UI tax returns or non-payment of UI tax can result in penalties and interest charges.
Additional Resources
For more information on UI tax for nonprofit organizations in Delaware, refer to the following resources:
- Delaware Division of Unemployment Insurance: Nonprofit Organizations
- Delaware Code Title 19 Chapter 1 Unemployment Compensation
Delaware Unemployment Insurance (UI) Tax
Employers in Delaware are required to pay Unemployment Insurance (UI) taxes to fund benefits for workers who have lost their jobs. The UI tax rate is determined by an employer’s experience rating, which is based on the number of former employees who have claimed UI benefits.
Calculating the UI Tax Rate
The UI tax rate is calculated by dividing the total amount of benefits paid to former employees by the total taxable wages paid by the employer over the past three years. The resulting percentage is the employer’s experience rating.
UI Tax Rates
The UI tax rates for Delaware employers range from 0.1% to 5.4%. Employers with a low experience rating will pay a lower tax rate, while employers with a high experience rating will pay a higher tax rate.
Seasonal Employers
Unemployment Tax for Employers with Seasonal Operations
Employers with seasonal operations may be eligible for a reduced UI tax rate. To qualify, an employer must meet the following criteria:
- The employer’s business is seasonal and employs workers for less than 26 weeks per year.
- The employer pays at least 50% of its wages during the 20 weeks with the highest payrolls.
Seasonal employers who meet these criteria may be eligible for a UI tax rate of 0.1%. To apply for a reduced UI tax rate, employers must file Form UC-1, Application for Seasonal Employer Status, with the Delaware Department of Labor.
UI Tax Due Dates
UI tax returns are due on the following dates:
- January 31st for the fourth quarter of the previous year
- April 30th for the first quarter of the current year
- July 31st for the second quarter of the current year
- October 31st for the third quarter of the current year
Filing UI Tax Returns
UI tax returns can be filed online, by mail, or in person at a Delaware Department of Labor office. Employers who file online will need to create an account with the Delaware Department of Labor’s E-Services Portal.
Penalties for Late Filing
Employers who fail to file their UI tax returns on time may be subject to penalties. The penalty for late filing is 10% of the unpaid tax, plus interest.
Additional Information
For more information about Delaware UI taxes, employers can visit the Delaware Department of Labor’s website or call the UI Tax Division at 302-761-8446.
| Due Date | Tax Period |
|---|---|
| January 31st | 4th quarter of previous year |
| April 30th | 1st quarter of current year |
| July 31st | 2nd quarter of current year |
| October 31st | 3rd quarter of current year |
| Section | Details |
|---|---|
| 1. Understanding Unemployment Insurance Taxes | Learn about the basics of UI taxes, including rates and eligibility. |
| 2. Minimizing Unemployment Insurance Tax Liability | Discover strategies to reduce your UI tax burden. |
| 3. Unemployment Insurance Taxes in Delaware | Explore specific information and resources related to UI taxes in Delaware. |
Minimizing Unemployment Insurance Tax Liability
Proactively managing your unemployment insurance (UI) tax liability can save your business significant funds. Here are 20 proven strategies to optimize your UI tax position:
1.
Stabilize Employment Levels: Maintain a consistent workforce by avoiding unnecessary layoffs or terminations. Hiring freezes or job sharing programs can help.
2.
Reduce Voluntary Turnover: Foster a positive work environment, offer competitive compensation and benefits, and provide professional development opportunities to retain employees.
3.
Minimize Absenteeism: Implement clear attendance policies, offer flexible work arrangements, and provide support for employees with personal or health issues.
4.
Automate Timekeeping: Use electronic systems to accurately track employee hours, reducing errors and potential overpayments of benefits.
5.
Conduct Regular Workforce Audits: Identify and address any discrepancies in employee records or timekeeping practices that could lead to inaccurate UI claims.
6.
Train Employees on UI Eligibility: Educate your workforce about the criteria for UI benefits and encourage them to seek alternate employment or training during periods of unemployment.
7.
Respond to Unemployment Claims Promptly: Timely responses to UI claims demonstrate your organization’s due diligence and can prevent fraudulent or excessive payments.
8.
Appeal Invalid Claims: If you believe an unemployment claim is invalid, promptly file an appeal and provide supporting documentation to refute the employee’s claims.
9.
Negotiate Favorable Settlement Agreements: If an unemployment claim cannot be denied, consider negotiating a settlement agreement that minimizes your liability.
10.
Consider a Voluntary Contribution Program: Making voluntary contributions to your state’s UI fund can lower your overall UI tax rate.
11.
Establish a UI Reimbursement Agreement: Reimbursement agreements with former employees who receive UI benefits can help recover some of your expenses.
12.
Seek Professional Assistance: Consult with an experienced accountant or unemployment tax specialist to optimize your UI tax strategies.
13.
Monitor Legislation and Regulations: Stay informed about changes in UI laws and regulations to adjust your strategies accordingly.
14.
Maintain Open Communication with UI Agencies: Build relationships with state UI agencies to obtain guidance and avoid potential disputes.
15.
Conduct UI Tax Audits: Regularly review your UI tax records to ensure accuracy and identify any potential errors or overpayments.
16.
Utilize Workforce Management Tools: Leverage technology to optimize employee scheduling, reduce absenteeism, and improve overall workforce management practices.
17.
Provide Employee Assistance Programs: Offer support services such as counseling, training, and job placement assistance to help employees transition smoothly during times of unemployment.
18.
Contribute to Training and Educational Programs: Invest in employee training and development to enhance their skills and employability, reducing the likelihood of unemployment.
19.
Network with Local Businesses: Collaborate with other employers in your industry or region to share best practices and support each other in managing UI tax liability.
20.
Stay Informed About UI Tax Incentives and Exemptions: Explore available tax incentives and exemptions that may reduce your UI tax burden, such as tax credits for hiring certain individuals or participating in workforce development programs.
Unemployment Insurance Tax for New Employers
Unemployment insurance tax is a state-mandated tax that employers must pay to support unemployment benefits for workers who lose their jobs. The amount of tax an employer owes is based on the amount of wages paid to employees, and the tax rate varies from state to state.
New Employer Registration
New employers must register with the state unemployment insurance agency within a certain number of days after hiring their first employee. The registration process typically involves submitting a completed registration form and paying an initial deposit of unemployment insurance tax. In Delaware, the registration form can be obtained online at https://ui.delawareworks.com/employer/registration or by calling the Delaware Division of Unemployment Insurance at (302) 761-8446.
Tax Rates
The unemployment insurance tax rate in Delaware is 2.5% on the first $9,000 of wages paid to each employee. The maximum tax liability for any employer is $225 per employee per year.
Filing and Payment
Unemployment insurance tax returns are due on a quarterly basis. The due dates for Delaware unemployment insurance tax returns are:
| Quarter | Due Date |
| First Quarter | April 30 |
| Second Quarter | July 31 |
| Third Quarter | October 31 |
| Fourth Quarter | January 31 |
Returns can be filed online, by mail, or by telephone. The preferred method of filing is online, as it is the most convenient and secure.
Penalties and Interest
Failure to file unemployment insurance tax returns or pay unemployment insurance taxes on time can result in penalties and interest charges. The penalty for late filing is 5% of the unpaid tax, plus 1% interest per month on the unpaid balance. The penalty for late payment is 10% of the unpaid tax, plus 1% interest per month on the unpaid balance.
Additional Resources
For more information on unemployment insurance tax in Delaware, please visit the Delaware Division of Unemployment Insurance website at https://ui.delawareworks.com/ or call (302) 761-8446.
Reporting Wages for Unemployment Insurance Tax Purposes
Filing for unemployment insurance tax is a crucial responsibility for businesses. In Delaware, employers must meticulously report all qualifying wages to the Division of Unemployment Insurance (DUI). The following guidelines ensure accurate reporting and compliance with state regulations.
Employer Identification Number (EIN)
All businesses with employees must possess an Employer Identification Number (EIN) issued by the Internal Revenue Service (IRS). This unique number serves as your business identifier when reporting wages to the DUI.
Covered Services
Qualifying wages include all remuneration employees earn for services performed for your business. This encompasses salaries, wages, commissions, tips, bonuses, and other forms of taxable income.
Reporting Periods
The reporting period for unemployment insurance taxes is on a quarterly basis. You must file your return within 45 days after the end of each quarter, which encompasses the months of January through March, April through June, July through September, and October through December.
Electronic Filing
The DUI highly encourages businesses to file their unemployment insurance tax returns electronically. This method ensures accuracy, efficiency, and timely processing of your submission. The DUI offers an Employer Access portal that enables employers to file returns conveniently and securely.
Form UC-50
For the purpose of reporting wages for unemployment insurance tax purposes, you must utilize Form UC-50, Employer’s Quarterly Wage Report. This form captures the following essential information:
- Employer Identification Number (EIN)
- Employer name and address
- Reporting period
- Total wages paid
- Contributions due
Wage Threshold
In Delaware, the minimum wage threshold for unemployment insurance tax liability is $1,500 per quarter. If your business pays employees less than $1,500 in a quarter, you are not obligated to file a return or contribute to the unemployment insurance fund.
Treatment of Employee Tips
Employers are required to report employee tips as taxable wages for unemployment insurance tax purposes. This includes tips received both directly from customers and through an employer-operated tip pool.
Penalties for Noncompliance
Failure to file unemployment insurance tax returns accurately and timely can result in penalties and late fees. The DUI levies a $50 penalty for each month a return is delinquent and a 15% penalty on unpaid contributions.
Time Limits for Reporting
The statute of limitations for the DUI to assess additional unemployment insurance taxes owed is three years from the due date of the return or the date the return was filed, whichever is later.
Audits and Appeals
The DUI reserves the right to audit employer records to verify the accuracy of reported wages. Employers may dispute audit findings through the DUI’s formal appeal process.
Additional Resources
For further assistance with unemployment insurance tax reporting, businesses may contact the Delaware Division of Unemployment Insurance at:
- Phone: (302) 761-8446
- Email: [email protected]
- Website: https://ui.delawareworks.com
Unemployment Tax Audits and Investigations
The Delaware Department of Labor (DOL) conducts unemployment insurance audits and investigations to ensure that employers are accurately reporting their payroll and paying their unemployment insurance (UI) taxes. These audits are generally conducted on a random basis or as part of a special project.
1. Notice of Audit
The employer will be notified of the audit in advance and will be provided with a list of the records that need to be prepared for the audit. The records must be maintained for at least four years.
2. Audit Process
The auditor will meet with the employer to review the payroll and UI records. The audit is usually conducted on-site at the employer’s business. The auditor will examine the following documents:
- Payroll registers
- Time and attendance records
- Payment records
- Termination records
- UI returns
- Any other records that may be relevant
3. Audit Findings
At the completion of the audit, the auditor will prepare a report of the findings. The report will include any adjustments that are necessary to the employer’s UI tax liability.
4. Appeal Process
The employer has the right to appeal the audit findings. The appeal must be filed within 30 days of the date the audit report is received.
5. Penalties
If the audit finds that the employer has underpaid UI taxes, the employer will be assessed penalties. The penalties are calculated based on the amount of the underpayment and the length of time the underpayment has existed.
23. Other Resources
In addition to the information provided in this section, there are a number of other resources available to employers who have questions about unemployment insurance audits and investigations. These resources include:
| Resource | Contact Information |
|---|---|
| Delaware Department of Labor | (302) 761-8000 |
| Internal Revenue Service | (800) 829-4933 |
| National Employment Law Project | (212) 285-3000 |
Unemployment Insurance Tax
Unemployment insurance tax is a payroll tax that funds unemployment insurance benefits. These benefits provide temporary income to workers who have lost their jobs through no fault of their own. The tax is paid by employers on the wages of their employees. The amount of tax that an employer pays is based on the employer’s experience rating. This rating is determined by the number of former employees who have collected unemployment benefits. Employers with a high experience rating pay a higher tax rate than employers with a low experience rating.
Delaware’s unemployment insurance tax rate is 2.5%. This rate is in the middle of the range of unemployment insurance tax rates in the United States. The lowest rate is 0.5% in Wyoming, and the highest rate is 6.2% in West Virginia.
The CARES Act
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was a federal law that was passed in March 2020 in response to the COVID-19 pandemic. The CARES Act included a number of provisions that were designed to help unemployed workers, including:
- A temporary increase in the maximum amount of unemployment benefits
- An extension of the duration of unemployment benefits
- The creation of a new program called Pandemic Unemployment Assistance (PUA) for workers who are not eligible for traditional unemployment benefits
The CARES Act also included a number of provisions that were designed to help employers, including:
- A tax credit for employers who keep employees on their payroll
- A deferral of payroll taxes for employers
Number 25
The number 25 is significant in the context of unemployment insurance tax in Delaware for two reasons.
First, the maximum taxable wage base for unemployment insurance tax in Delaware is $25,000. This means that employers are only required to pay unemployment insurance tax on the first $25,000 of wages that they pay to each employee.
Second, the minimum weekly benefit amount for unemployment insurance benefits in Delaware is $25. This means that unemployed workers who are eligible for benefits will receive at least $25 per week.
Unemployment Insurance Tax Rates in Delaware
The following table shows the unemployment insurance tax rates in Delaware for different experience ratings:
| Experience Rating | Tax Rate |
|---|---|
| 0.00 – 1.50% | 2.5% |
| 1.51 – 2.50% | 3.0% |
| 2.51 – 3.50% | 3.5% |
| 3.51 – 4.50% | 4.0% |
| 4.51 – 5.50% | 4.5% |
| 5.51 – 6.50% | 5.0% |
| 6.51 – 7.50% | 5.5% |
| 7.51 – 8.50% | 6.0% |
| 8.51 – 9.50% | 6.5% |
| 9.51 – 10.50% | 7.0% |
| 10.51 – 11.50% | 7.5% |
| 11.51 – 12.50% | 8.0% |
| 12.51 – 13.50% | 8.5% |
| 13.51 – 14.50% | 9.0% |
| 14.51 – 15.50% | 9.5% |
| 15.51 – 16.50% | 10.0% |
| 16.51 – 17.50% | 10.5% |
| 17.51 – 18.50% | 11.0% |
| 18.51 – 19.50% | 11.5% |
| 19.51 – 20.50% | 12.0% |
Filing Unemployment Insurance Tax Returns
Employers are required to file unemployment insurance tax returns on a quarterly basis. The due dates for these returns are:
- January 31
- April 30
- July 31
- October 31
Returns can be filed online or by mail. Employers who file online can use the Delaware Unemployment Insurance Division’s e-Services portal. Employers who file by mail can use the forms that are available on the Division’s website.
Paying Unemployment Insurance Taxes
Employers can pay their unemployment insurance taxes online or by mail. To pay online, employers can use the Delaware Unemployment Insurance Division’s e-Services portal. To pay by mail, employers can send a check or money order to the following address:
Delaware Unemployment Insurance Division
P.O. Box 119
Wilmington, DE 19899
Delaware Unemployment Insurance Tax
The Delaware Unemployment Insurance Act imposes a tax on employers to fund unemployment insurance benefits for eligible workers who lose their jobs through no fault of their own. The tax rate is based on the employer’s experience rating, which is determined by the number of claims for unemployment insurance benefits filed by the employer’s former employees. The tax rate can range from 0.1% to 10.5% of the employer’s taxable wages.
Covid-19 and Unemployment Insurance Tax
The COVID-19 pandemic has had a significant impact on the unemployment insurance system in Delaware, as it has in other states. The number of claims for unemployment insurance benefits filed in Delaware skyrocketed in the early months of the pandemic, as businesses were forced to close or lay off workers due to the economic slowdown. In response, the state implemented a number of measures to assist employers and workers, including:
- Waiving the waiting period for unemployment insurance benefits
- Expanding the eligibility criteria for unemployment insurance benefits
- Providing additional funding for unemployment insurance benefits
Federal Unemployment Insurance Tax Act (FUTA)
The FUTA is a federal law that imposes a tax on employers to fund unemployment insurance benefits for eligible workers who lose their jobs through no fault of their own. The FUTA tax rate is 6.0% of the employer’s taxable wages, but employers are allowed a credit for up to 5.4% of the FUTA tax they pay into state unemployment insurance programs.
Employer Responsibilities
Employers are required to register with the Delaware Division of Unemployment Insurance and to file quarterly tax returns. Employers are also required to keep records of their employees’ wages and hours worked.
Employee Rights
Employees who lose their jobs through no fault of their own may be eligible for unemployment insurance benefits. To be eligible, employees must meet certain criteria, such as having earned a minimum amount of wages in the base period and being able and available to work.
Employer Contribution Cap
The employer contribution cap is the maximum amount of FUTA tax that an employer is required to pay in a given year. The employer contribution cap is adjusted annually based on the average wage in the United States. For 2023, the employer contribution cap is $8,500 per employee.
Unemployment Insurance Tax Rates
The unemployment insurance tax rate is determined by the employer’s experience rating. The experience rating is based on the number of claims for unemployment insurance benefits filed by the employer’s former employees. The tax rate can range from 0.1% to 10.5% of the employer’s taxable wages.
Employer Tax Credits
Employers can claim a number of tax credits related to unemployment insurance, including:
- The Work Opportunity Tax Credit (WOTC)
- The Disabled Access Credit
- The Indian Employment Credit
- The Veteran Hiring Credit
| Tax Year | Employer Contribution Cap |
|---|---|
| 2023 | $8,500 |
| 2024 | $8,700 |
| 2025 | $8,900 |
Unemployment Tax Forms for Delaware Online
Delaware employers can file their unemployment tax returns and make payments online through the Delaware Unemployment Insurance Division (DUID) website. The following forms are available for download and submission online:
Form UC-1: Unemployment Insurance Contribution and Wage Report
This form is used to report wages paid to employees and to calculate the amount of unemployment insurance tax due. It must be filed quarterly, by April 30th, July 31st, October 31st, and January 31st.
Form UC-1X: Amended Unemployment Insurance Contribution and Wage Report
This form is used to correct errors on a previously filed Form UC-1. It must be filed within three years of the due date of the original return.
Form UC-3: Notice of Partial or Intermittent Shutdown
This form must be filed by employers who are temporarily closing down their business or reducing their workforce. It provides information about the shutdown, including the date it begins and ends, the number of employees affected, and the reason for the shutdown.
Form UC-4: Quarterly Wage Detail Report
This form provides detailed information about wages paid to employees during the quarter. It is used to verify the wages reported on Form UC-1 and to calculate the amount of unemployment insurance tax due.
Form UC-5: Separation Notice
This form must be filed by employers when an employee is separated from employment, whether voluntarily or involuntarily. It provides information about the employee, the date of separation, and the reason for separation.
Form UC-6: Employer Registration and Return
This form is used to register a new business with the DUID and to file the first quarterly unemployment insurance tax return.
Form UC-7: Voluntary Contribution and Wage Report
This form is used by employers who want to make voluntary contributions to the unemployment insurance trust fund. It must be filed quarterly, by April 30th, July 31st, October 31st, and January 31st.
Form UC-8: Request for Refund or Credit of Overpayment
This form is used to request a refund or credit of an overpayment of unemployment insurance tax. It must be filed within three years of the date the overpayment was made.
Form UC-9: Application for Waiver of Interest and/or Penalty
This form is used to request a waiver of interest and/or penalty for late filing or payment of unemployment insurance tax. It must be filed within 60 days of the due date of the return or payment.
Additional Resources
The DUID website provides a number of additional resources for employers, including:
- Frequently asked questions
- Tutorials on how to file unemployment tax returns online
- Contact information for customer service
The DUID can be reached by phone at (302) 761-8446 or by email at [email protected].
The DUID’s website is located at https://ui.delawareworks.com/.
Employer Responsibilities for Unemployment Taxes
1. Registering for a Delaware Unemployment Insurance Tax Account
Employers must register for an unemployment insurance (UI) tax account with the Delaware Division of Unemployment Insurance (DUI) within 30 days of becoming subject to UI tax. Registration can be done online at https://ui.delawareworks.com/ or by completing and submitting a UI-1 form to DUI.
2. Filing Quarterly Unemployment Insurance Tax Returns
Employers must file quarterly UI tax returns (Form UI-100) on or before the last day of the month following the end of each calendar quarter (April 30, July 31, October 31, and January 31). Returns can be filed online at https://ui.delawareworks.com/ or by mail to:
Delaware Division of Unemployment Insurance
PO Box 1158
Wilmington, DE 19801
3. Paying Unemployment Insurance Taxes
Employers must pay UI taxes with their quarterly returns. Taxes can be paid online at https://ui.delawareworks.com/ or by mail to:
Delaware Division of Unemployment Insurance
PO Box 1158
Wilmington, DE 19801
The UI tax rate for 2023 is 2.35% on the first $21,300 of each employee’s wages. The following table shows the UI tax rates for previous years:
| Year | Rate |
|---|---|
| 2022 | 2.35% |
| 2021 | 2.35% |
| 2020 | 2.35% |
| 2019 | 2.35% |
| 2018 | 2.35% |
4. Reporting New Hires
Employers must report all new hires to DUI within 20 days of the date of hire. This can be done online at https://ui.delawareworks.com/ or by completing and submitting a New Hire Reporting Form (Form UI-15) to DUI.
5. Maintaining Unemployment Insurance Records
Employers must keep records of all wages paid to employees, hours worked, and UI taxes paid for at least three years. These records must be made available to DUI upon request.
6. Responding to Unemployment Insurance Audits
DUI may conduct audits of employer UI tax records to ensure compliance with UI laws. Employers must cooperate with auditors and provide all requested information and documentation.
7. Penalties for Non-Compliance
Employers who fail to comply with UI laws may be subject to penalties, including fines, interest, and disqualification from the UI system.
8. Getting Help
Employers with questions about UI taxes or other UI matters can contact DUI by phone at (302) 761-8446 or by email at [email protected].
Delaware Unemployment Insurance Tax Resources
Who Is Responsible for Withholding and Paying Unemployment Taxes?
According to the Delaware Unemployment Insurance (UI) Act, every employer must withhold and pay unemployment insurance (UI) taxes. This includes employers with one or more employees.
Who Is an Employer?
Under the Delaware Unemployment Insurance (UI) Act, an employer is any individual, partnership, association, corporation, the legal representative of a deceased person’s estate, a receiver, an administrator, or an assignee. It also includes the State of Delaware, its political subdivisions, or any instrumentality of the state or its political subdivisions.
What Is the Unemployment Insurance Tax Rate?
The unemployment insurance tax rate for Delaware is determined by the employer’s experience rating. This rating is based on the employer’s history of unemployment claims. The tax rate can range from 0.5% to 5.4%.
What Is the Taxable Wage Base?
The taxable wage base for Delaware is the first $18,000 of wages paid to each employee. This means that employers are only required to pay UI taxes on the first $18,000 of wages paid to each employee.
How are UI Tax Returns Filed?
Delaware UI tax returns are filed electronically using the Delaware UI Online Tax System. Employers are required to file a quarterly return, even if they have no employees or wages to report for the quarter.
Where Can I Get Help With Unemployment Insurance Taxes?
The Delaware Department of Labor’s Division of Unemployment Insurance provides a variety of resources to help employers with unemployment insurance taxes. These resources include:
What Are the Penalties for Failing to Withhold and Pay Unemployment Insurance Taxes?
Employers who fail to withhold and pay unemployment insurance taxes may be subject to penalties. These penalties can include:
What Are the Benefits of Paying Unemployment Insurance Taxes?
There are a number of benefits to paying unemployment insurance taxes. These benefits include:
Conclusion
Delaware unemployment insurance taxes are an important part of the state’s tax system. Employers are required to withhold and pay these taxes on a quarterly basis. The Delaware Department of Labor’s Division of Unemployment Insurance provides a variety of resources to help employers with unemployment insurance taxes. Employers who fail to withhold and pay unemployment insurance taxes may be subject to penalties.
Additional Resources
- Delaware Department of Labor’s Division of Unemployment Insurance
- Delaware Unemployment Insurance Online Tax System
Frequently Asked Questions
Q: What is the unemployment insurance tax rate for Delaware?
A: The unemployment insurance tax rate for Delaware is determined by the employer’s experience rating. This rating is based on the employer’s history of unemployment claims. The tax rate can range from 0.5% to 5.4%.
Q: What is the taxable wage base for Delaware?
A: The taxable wage base for Delaware is the first $18,000 of wages paid to each employee. This means that employers are only required to pay UI taxes on the first $18,000 of wages paid to each employee.
Q: How are UI tax returns filed?
A: Delaware UI tax returns are filed electronically using the Delaware UI Online Tax System. Employers are required to file a quarterly return, even if they have no employees or wages to report for the quarter.
Q: What are the penalties for failing to withhold and pay unemployment insurance taxes?
A: Employers who fail to withhold and pay unemployment insurance taxes may be subject to penalties. These penalties can include a fine of up to $1,000, imprisonment for up to one year, or both a fine and imprisonment.
Delaware Unemployment Insurance Tax FAQs
1. Who is responsible for paying unemployment insurance taxes in Delaware?
Employers with one or more employees are required to pay unemployment insurance taxes in Delaware. This includes businesses, nonprofit organizations, and government agencies.
2. What is the unemployment insurance tax rate in Delaware?
| Year | Employer Tax Rate |
|---|---|
| 2023 | 0.09% – 5.4% |
3. How is the unemployment insurance tax rate determined?
- New Employers: New employers are assigned a starting tax rate of 2.7%. This rate may be adjusted based on the employer’s experience rating, which is calculated after the first year of operation.
- Experience Rating: After the first year of operation, employers receive an experience rating based on their unemployment insurance claims history. Employers with a low claims history will receive a lower tax rate, while employers with a high claims history will receive a higher tax rate.
- Solvency Tax: In addition to the experience rating, employers may also be required to pay a solvency tax. The solvency tax is a temporary tax that is used to maintain the solvency of the unemployment insurance trust fund. The solvency tax is set by the Delaware Department of Labor and varies based on the fund’s balance.
4. When are unemployment insurance taxes due?
Unemployment insurance taxes are due quarterly on the following dates:
| Quarter | Due Date |
|---|---|
| First Quarter | April 30 |
| Second Quarter | July 31 |
| Third Quarter | October 31 |
| Fourth Quarter | January 31 |
5. How can I pay my unemployment insurance taxes?
There are several ways to pay your unemployment insurance taxes in Delaware:
- Online: You can pay your taxes online through the Delaware Department of Labor’s website.
- By mail: You can mail your payment to the following address:
Delaware Department of Labor
Unemployment Insurance Division
P.O. Box 1406
Wilmington, DE 19899 - In person: You can pay your taxes in person at any Delaware Department of Labor office.
6. What are the consequences of failing to pay unemployment insurance taxes?
If you fail to pay your unemployment insurance taxes on time, you may be subject to penalties and interest. The penalties can range from 5% to 25% of the unpaid taxes, and the interest rate is 1% per month. You may also be required to file a delinquent return and pay a late filing fee.
7. Can I get a refund of my unemployment insurance taxes?
Yes, you may be eligible for a refund of your unemployment insurance taxes if you have overpaid your taxes. To request a refund, you must file a refund claim with the Delaware Department of Labor.
8. How can I get more information about unemployment insurance taxes in Delaware?
You can get more information about unemployment insurance taxes in Delaware by visiting the Delaware Department of Labor’s website or by calling (302) 761-8446.
Delaware Unemployment Tax Rate Comparison
Delaware employers pay unemployment insurance taxes on the first $20,000 of wages paid to each employee. The tax rate for 2023 is 2.7%, down from 3.1% in 2022. This rate is the lowest in the United States.
The Delaware Division of Unemployment Insurance (DUI) uses a “merit rating” system to determine the unemployment insurance tax rate for each employer. This system takes into account the employer’s history of unemployment claims and the balance in the state’s unemployment insurance trust fund.
Employers with a good claims history and a positive balance in the trust fund may be eligible for a tax rate reduction. Employers with a poor claims history or a negative balance in the trust fund may be eligible for a tax rate increase.
2023 Delaware Unemployment Insurance Tax Rates
The following table shows the 2023 Delaware unemployment insurance tax rates for employers with different experience ratings:
| Experience Rating | Tax Rate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1.0 | 0.1% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1.1 | 0.2% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1.2 | 0.3% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1.3 | 0.4% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1.4 | 0.5% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1.5 | 0.6% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1.6 & Above | 2.7%
Experience Rating 37Employers with an experience rating of 37 are considered to have a “standard” claims history. These employers will pay the base unemployment insurance tax rate of 2.7% in 2023. Employers can improve their experience rating by:
Employers can also request a review of their experience rating if they believe it is incorrect. To request a review, employers should contact the DUI at (302) 761-8446. Unemployment Insurance TaxUnemployment insurance (UI) tax is a payroll tax that helps provide financial assistance to workers who lose their jobs through no fault of their own. It is paid by employers and is used to fund unemployment insurance benefits. Delaware Unemployment Insurance Tax RateThe UI tax rate in Delaware is determined by an employer’s experience rating. This rating is based on the employer’s history of layoffs and claims for unemployment benefits. The higher the experience rating, the lower the UI tax rate. The minimum UI tax rate in Delaware is 0.5%, and the maximum rate is 5.4%. The average UI tax rate in Delaware is 2.7%. How to Calculate Delaware UI TaxTo calculate your Delaware UI tax liability, you must first determine your taxable wages. Taxable wages include all wages paid to employees, up to a maximum of $15,000 per employee per year. Once you have determined your taxable wages, you must multiply them by your experience rating. The result is your UI tax liability. Delaware UI Tax FormsThe following forms are used to report and pay UI taxes in Delaware:
These forms can be obtained from the Delaware Division of Unemployment Insurance. Business Taxes in DelawareDelaware has a variety of business taxes, including the following: Corporate Income TaxThe corporate income tax is a tax on the net income of corporations. The corporate income tax rate in Delaware is 8.7%. Personal Income TaxThe personal income tax is a tax on the income of individuals. The personal income tax rate in Delaware ranges from 2.2% to 6.6%. Gross Receipts TaxThe gross receipts tax is a tax on the gross receipts of businesses. The gross receipts tax rate in Delaware is 0.5%. Sales and Use TaxThe sales and use tax is a tax on the sale or use of goods and services. The sales and use tax rate in Delaware is 6%. Other Business TaxesIn addition to the taxes listed above, businesses in Delaware may also be subject to the following taxes:
Delaware Business Tax TableThe following table summarizes the business taxes in Delaware:
How to Register for Delaware Business TaxesTo register for Delaware business taxes, you must file a business registration application with the Delaware Division of Corporations. The business registration application can be obtained online or by mail. How to Pay Delaware Business TaxesDelaware business taxes can be paid online, by mail, or by phone. Delaware Unemployment Insurance Tax and Social ResponsibilityUnderstanding the Delaware Unemployment Insurance TaxThe Delaware Unemployment Insurance Tax (UIT) is a state payroll tax that funds the Unemployment Insurance (UI) program. This program provides temporary financial assistance to workers who have lost their jobs through no fault of their own. The tax is based on a percentage of an employee’s wages, and the rate varies depending on the employer’s experience rating. Employers with a history of layoffs pay a higher rate than those with a stable workforce. Social Responsibility of EmployersEmployers have a social responsibility to ensure that their employees have access to UI benefits if they become unemployed. By paying UIT on time and in full, employers are helping to maintain a safety net for their former employees. In addition to paying UI taxes, employers can also help to reduce unemployment by providing job training and placement services to their employees. This can help to keep workers employed and reduce the need for UI benefits. Delaware Unemployment Insurance Tax RateThe Delaware UIT rate for 2023 is 2.4%. This rate is expected to increase to 2.5% in 2024. Experience RatingEmployers with a stable workforce can qualify for a reduced UI tax rate through experience rating. The experience rating system is based on the employer’s history of layoffs and UI claims. Employers are assigned an experience rating factor (ERF) based on their UI claims experience over the past three years. The ERF is used to calculate the employer’s UI tax rate.
Employers with an ERF of below 1.0 pay the lowest UI tax rate of 2.4%. Employers with an ERF of 2.5 or above pay the highest UI tax rate of 2.8%. New EmployersNew employers are assigned an ERF of 1.0 for their first two years of operation. After two years, the employer’s ERF will be based on their UI claims experience. Reporting and Paying Delaware Unemployment Insurance TaxEmployers are responsible for reporting and paying UIT on a quarterly basis. The quarterly reporting periods are:
Employers can file their UIT returns and make payments online or by mail. For more information, visit the Delaware Division of Unemployment Insurance website. Penalties for Late Payment or Nonpayment of Delaware Unemployment Insurance TaxEmployers who fail to pay their UIT on time are subject to penalties and interest. The penalty for late payment is 10% of the unpaid tax, plus interest. The penalty for nonpayment is 25% of the unpaid tax, plus interest. In addition to penalties and interest, employers who fail to pay their UIT may also be subject to legal action. Delaware Unemployment Insurance Tax ExemptionsCertain employers are exempt from paying Delaware UIT, including:
Employers who believe they may be exempt from Delaware UIT should contact the Delaware Division of Unemployment Insurance for more information. Unemployment Insurance Tax and TechnologyUnemployment Insurance TaxUnemployment insurance tax (UIT) is a payroll tax that businesses are required to pay to the state in which they operate. The funds collected from UIT are used to pay benefits to individuals who have lost their jobs through no fault of their own. The amount of UIT a business owes is based on the wages paid to its employees. The tax rate varies from state to state, but it typically ranges from 1% to 6%. Businesses can reduce their UIT liability by taking steps to reduce their turnover rate and by using technology to automate their payroll processes. TechnologyTechnology can be used to improve the accuracy and efficiency of UIT reporting and payment. Businesses can use software to track employee wages and withhold the correct amount of UIT. Businesses can also use online portals to file their UIT returns and make payments electronically. Also businesses can use the help of accountant to have all of these services taken care of. Electronic Filing and PaymentElectronic filing and payment (EFP) is a convenient and efficient way for businesses to meet their UIT obligations. EFP allows businesses to file their returns and make payments online, which can save time and money. To use EFP, businesses must register with their state’s unemployment insurance agency. Employer Services PortalMany states offer employer services portals that allow businesses to manage their UIT accounts online. Through these portals, businesses can view their account information, file returns, make payments, and receive notifications. Employer services portals can be a valuable resource for businesses, as they can help to streamline the UIT reporting and payment process. Third-Party SoftwareThere are a number of third-party software providers that offer solutions for businesses that need help with their UIT reporting and payment. These solutions can range from simple payroll software to more comprehensive human resources management systems. Businesses should evaluate their needs and choose a solution that is right for them. Automated WithholdingAutomated withholding is a feature that is available on some payroll software. Automated withholding can help businesses to ensure that the correct amount of UIT is withheld from employee wages. This can help businesses to avoid penalties and interest charges. Forms 1099 and W-2Businesses are required to file Forms 1099 and W-2 with the Internal Revenue Service (IRS) and their state’s unemployment insurance agency. Forms 1099 and W-2 report the income that businesses have paid to their employees. Businesses can use software to generate Forms 1099 and W-2, which can save time and effort. State-Specific RequirementsThe requirements for UIT reporting and payment vary from state to state. Businesses should be aware of the requirements in their state and take steps to comply with those requirements. The following table provides a summary of the UIT requirements in each state:
Delaware Unemployment Insurance TaxEmployers are obligated to pay unemployment insurance tax if they meet certain criteria set forth by the state of Delaware. These criteria include:
Exemptions from Unemployment Insurance TaxCertain employers and types of employment are exempt from paying unemployment insurance tax in Delaware. These include:
Unemployment Insurance Tax Rates and Reporting RequirementsThe unemployment insurance tax rate in Delaware is 2.5% for all employers. The tax is reported and paid on a quarterly basis using Form UC-1, Delaware Quarterly Contribution and Wage Report. The due dates for Form UC-1 are as follows:
Employers can file Form UC-1 electronically or by mail. Benefits of Unemployment Insurance for WorkersUnemployment insurance provides temporary income support to workers who have lost their jobs through no fault of their own. Benefits are available for up to 26 weeks at a rate of one-half of the worker’s average weekly wage, up to a maximum of $600 per week. To be eligible for unemployment insurance benefits, workers must:
Unemployment insurance benefits can help workers pay for essential expenses such as food, housing, and transportation. They can also help workers avoid falling into poverty. WorkforceThe Delaware workforce is comprised of over 500,000 workers. The state’s unemployment rate is 4.7%, which is below the national average. Occupational Distribution of the WorkforceThe occupational distribution of the Delaware workforce is as follows:
Industries with the Largest WorkforceThe Delaware workforce is concentrated in the following industries:
Educational Attainment of the WorkforceThe educational attainment of the Delaware workforce is as follows:
49. Reporting ChangesIt’s crucial to promptly report any changes that may affect your unemployment insurance tax liability to the Delaware Division of Unemployment Insurance (DUI). These changes include:
You can report these changes online through the DUI’s employer portal or by mail using the appropriate form. Table: Reporting Changes to the Delaware DUI
By promptly reporting changes, you can ensure that your unemployment insurance tax account is up-to-date and avoid potential penalties for late or incorrect reporting. Additional Tips for Reporting Changes* Keep detailed records of all changes that occur in your business. Delaware Unemployment Insurance (UI) Tax NumberThe Delaware Unemployment Insurance (UI) tax number is a unique identifier assigned to businesses that are required to pay UI taxes in the state of Delaware. This number is used by the Delaware Department of Labor (DOL) to track and administer UI accounts and payments. Businesses must obtain their UI tax number from the DOL before they can begin to file UI tax returns or pay UI taxes. To obtain a UI tax number, businesses must complete and submit an Employer Registration Form to the DOL. This form can be obtained online or by mail. The DOL will then issue a UI tax number to the business. Businesses must use this number on all UI tax returns and payments. People Also Ask About Unemployment Insurance Tax Delaware NumberWhat is the format of a Delaware UI tax number?Delaware UI tax numbers are nine digits long and begin with the letter “D”. Where can I find my Delaware UI tax number?You can find your Delaware UI tax number on your Employer Registration Letter or on your UI tax returns. What if I have multiple businesses in Delaware?If you have multiple businesses in Delaware, you will need to obtain a separate UI tax number for each business. |