State Unemployment Tax

What is the State Unemployment Tax?

 

State Unemployment Tax, or State Unemployment Tax Act (SUTA), is a form of payroll tax imposed by states that employers pay to fund benefits for workers who have lost their jobs.

 

Other terms that states may use to define SUTA:

 

• State unemployment insurance
• SUI
• Re-employment Tax

 

Who Pays the State Unemployment Tax?

 

An employer pays the entire amount of state unemployment taxes and is required to remit the tax to the relevant state governmental unemployment insurance program on behalf of their workers.

 

Employers have to pay into the same state unemployment insurance (UI) program that covers regular employees in their state of business. This tax is completely on the employer payroll and pays for unemployment benefits for people whose jobs were lost — something that was not their fault.

 

Why Do I Owe State Taxes for Unemployment?

 

This means that if you owe state taxes on your unemployment before November, these types of unemployment benefits, which are taxed at the state level, are not forgiven. Most states tax unemployment benefits as income, so you could owe state income taxes on what you get.

 

Also, See: State Income Tax