Unemployment Insurance Tax (FUTA/SUTA): Tennessee

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

Author: Vicki M. Lambert, The Payroll Advisor

Summary

• Tennessee uses the IRS's 20-factor test to determine who is an employee for state unemployment insurance (SUI) tax purposes. See The IRS 20-Factor Test of Employment Status.
• The law defines wages for SUI purposes as all compensation for personal services, including salaries, commissions, bonuses and the cash value of all compensation paid in any medium other than cash. See SUI Taxable Wages.
• The annual total SUI tax rate is based on a range of rates. See Contribution Rates.
• The Tennessee 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 tax rate are liable for serious penalties. See SUTA Dumping.
• The state does not permit employers to make voluntary contributions to lower their SUI tax rates. See Voluntary Contributions.
• 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 Tennessee may be requested to submit Multiple Worksite Reports. See Multiple Worksite Reporting.
• Employers must respond to agency requests for separation information within seven days from the date the request is mailed to the employer. See Benefit Overpayments.
• All employers in Tennessee must maintain records for each employee for seven years and keep them available for inspection by the state Department of Labor and Workforce Development (DLWD). See Recordkeeping Requirements.