Unemployment Insurance Taxes

Employer’s Unemployment Insurance Tax Account 

An account for each employer covered by the Iowa Employment Security law is maintained by the Unemployment Insurance (UI) Division. Each employer is assigned an employer account number at the time the employer’s liability status is established. This number should appear on all correspondence and forms submitted by the employer to Iowa Workforce Development (IWD). New accounts are created online at www.myiowaui.org.

Unemployment Insurance Tax Rate Tables

The Iowa law stipulates that UI taxes may be collected from employers under eight different tax rate tables, and each tax rate table has 21 rate brackets (or ranks). Rates vary from 0 to 9 percent on tax rate table 1, and from 0 to 7 percent on tax rate table 8. This means tax rate table 1 collects the most UI tax and tax rate table 8 collects the least UI tax.

The tax rate tables were established to help maintain the stability of the UI Trust Fund. As such, a formula in the law mandates movement to a tax rate table that collects more revenue when the balance in the UI fund is low and movement to a tax rate table collecting less revenue when the balance is high.

The tax rate table effective for any given year is applicable to all participating employers. The table in effect for all private employers for 2019 is the Contribution Rate Table 7.

New Employers

With the exception of new construction employers, new employers are assigned the rate from rank 12 of the table in effect (the rank is not to go below 1 percent). New construction employers are assigned the rate from rank 21 of the table in effect. The Historical Unemployment Insurance Tax Rate Table provides rate information for the past decade. 

Employer Notification of UI Tax Rates

Rate tables are updated annually. During November, a Notice of Tax Rate is mailed to each employer indicating the tax rate to be use for the coming year. 

Employers have 30 days to appeal their Notice of Tax Rate if they believe an error occurred in calculating the rate.  The following links provide additional information on the rate computations and appeal rights:

State Unemployment Tax Act Avoidance

State Unemployment Tax Act (SUTA) avoidance (or "dumping") is a form of tax avoidance or UI tax rate manipulation through which employers dump higher UI taxes by attempting to obtain a lower rate. SUTA dumping involves the manipulation of an employer’s UI tax rate and/or payroll reporting to owe less in UI taxes.

 

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