Unemployment Insurance Tax (FUTA/SUTA): Maine

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

Author: Vicki M. Lambert, The Payroll Advisor

Summary

• The ABC test is used in Maine to determine who is an employee and who is an independent contractor for unemployment insurance tax coverage purposes. Workers are presumed to be employees unless the employer can prove the worker satisfies the three criteria that denote an independent contractor. See ABC Test.
• State unemployment insurance (SUI) tax rates are based on 20 categories. Individual employer experience rates are calculated each year after July 31. Several factors are considered when computing an employer's tax rate, such as the annual taxable wages of the employer, benefit charges and contributions paid. See Contribution Rates; Experience Rating Method.
• Maine law permits most employers to make voluntary SUI contributions, in addition to regular contributions, in order to lower their contribution rate. Maine law also permits two or more nonprofit organizations or government entities to file a joint application to establish a group account. See Voluntary Contributions; Joint or Combined Accounts.
• Employers are required to submit quarterly unemployment insurance contribution and wage reports no later than 30 days after the end of each calendar quarter. Penalties are imposed for noncompliance. See Quarterly Reporting Requirements.
• An employer's experience-rated record may be charged for benefit overpayments caused by the employer's, or its agent's, failure to timely or adequately respond to requests for benefit claim information. See Benefit Overpayments.
• Multiple Worksite Reports are mandatory in Maine for employers that operate businesses from more than one location under one unemployment insurance account number. See Multiple Worksite Reporting.
• Employers are required to keep certain payroll records for at least four years. See Recordkeeping Requirements.