Unemployment Insurance Tax (FUTA/SUTA): Michigan

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

Author: Vicki M. Lambert, The Payroll Advisor

Summary

• Michigan uses the 20-factor common law test used by the Internal Revenue Service to determine the extent of an employer's control over an employee for employment tax coverage purposes. See Common Law Test.
• Michigan defines wages as all compensation for personal services, including commissions and bonuses, tips actually reported to the employer and the cash value of all compensation payable in any medium other than cash. See SUI Taxable Wages.
• Three separate components determine the tax rate of fully experienced employers - those employers in their fifth year or more of business. See Contribution Rates and Experience Rating.
• Michigan has adopted the federal model SUTA dumping law. See SUTA Dumping.
• Michigan employers may make voluntary contributions to lower their SUI tax rates. Two or more employers may file a joint application to the Michigan Unemployment Insurance Agency (UIA) to establish a group account for the purpose of sharing the cost of benefits paid. See Voluntary Contributions; Joint or Combined Accounts.
• Michigan employers are required to report wage detail information, and file tax reports along with payments, on a quarterly basis. All employers must report and file online See Quarterly Reporting Requirements.
• An employer's UI account will not be relieved of charges for erroneous benefit payments under certain circumstances. See Benefit Overpayments.
• Michigan employers that operate more than one worksite under the same employer account number may be requested to file Multiple Worksite Reports. See Multiple Worksite Reporting.
• Employers must keep certain employment records for at least six years. See Recordkeeping Requirements.