Unemployment Insurance Tax (FUTA/SUTA): Virginia

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

Author: Vicki M. Lambert, The Payroll Advisor

Summary

• In Virginia, services performed by an individual for compensation are considered "employment" subject to the state unemployment insurance (SUI) tax unless the Virginia Employment Commission (the Commission) determines that the individual is not an employee for federal employment tax purposes. See Covered Employment.
• An employer's experience record consists of four fiscal years of the employer's taxable payroll on which taxes were paid on or before the September 30 immediately following the year to which the tax rate applies, and charges for UI benefits paid by the employer. See Experience Rating Method.
• The Commonwealth of Virginia has adopted the provisions of the federal model SUTA dumping law. See SUTA Dumping.
• Government agencies and nonprofit organizations may file a joint application with the Commission to establish a group account in order to share the cost of benefits paid that are attributable to services performed by their employees. See Joint or Combined Accounts.
• Virginia employers are required to file UI reports electronically by the end of the month following the end of each quarter. Penalties are imposed for failure to report and late reports. Quarterly Multiple Worksite Reports, BLS 3020, are also required to be filed. See Quarterly Reporting Requirements; Multiple Worksite Reporting.
• An employer's account will be charged for overpayments caused by the employer's failure to respond properly to requests for information about benefit claims. See Benefit Overpayments.
• All employers are required to keep a complete set of certain payroll records on all employees. The records must be maintained for auditing purposes for at least four years from the date the related wages were paid or payable. See Recordkeeping Requirements.