Unemployment Insurance Tax (FUTA/SUTA): Colorado

Federal law and guidance on this subject should be reviewed together with this section.

Authors: Stuart R. Buttrick, Mary L. Will and Tareen Zafrullah, Faegre Drinker Biddle & Reath LLP

Summary

• The Colorado Economic Security Act governs unemployment insurance in Colorado and does not apply to all employers. See Determining Coverage.
• The law defines wages for state unemployment insurance (SUI) purposes as all compensation for personal services, including salaries, commissions and bonuses and the cash value of all compensation paid in any medium other than cash. The annual total SUI premium rate is based on a range of rates. See SUI Taxable Wages; Contribution Rates.
• The Colorado anti-SUTA dumping law mirrors the federal SUTA Dumping Prevention Act. Under state law, employers that knowingly attempt to manipulate businesses to get a lower premium rate are liable for serious penalties. See SUTA Dumping.
• The state permits voluntary contributions to lower SUI premium rates. See Voluntary Contributions.
• An employer that is required to make unemployment insurance contributions must file quarterly wage reports. In addition, employers that operate more than one establishment in Colorado may be requested to submit Multiple Worksite Reports. See Quarterly Reporting Requirements; Multiple Worksite Reporting.
• An employer's account may be charged for an improper payment of benefits resulting from the employer's failure to respond timely or adequately to a request for information. See Benefit Overpayments.
• All employers in Colorado must maintain records for each employee for five years and keep them available for inspection by the state Department of Labor. See Recordkeeping Requirements.