Unemployment Insurance Tax (FUTA/SUTA): Delaware

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

Authors: Jennifer Gimler Brady and Michael B. Rush, Potter Anderson & Corroon LLP

Summary

• Delaware uses the ABC Test to determine who is an employee for state unemployment insurance (SUI) tax purposes. See ABC Test.
• The law defines wages for 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 tax rate is based on a range of rates. See SUI Taxable Wages and Contribution Rates.
• The Delaware anti-SUTA dumping law mirrors the federal SUTA Dumping Prevention Act. Employers that knowingly attempt to manipulate businesses to get a lower tax rate are liable for serious penalties. See SUTA Dumping.
• An employer that is required to make unemployment insurance contributions must file quarterly reports. See Quarterly Reporting Requirements.
• Employers that operate more than one establishment in Delaware may be requested to submit Multiple Worksite Reports. See Multiple Worksite Reporting.
• An employer's UI account will be charged for erronoeus benefit payments under certain circumstances. See Benefit Overpayments.
• All employers in Delaware must maintain records for each employee for four years and keep them available for inspection by the state Department of Labor. See Recordkeeping Requirements.