Unemployment Insurance Tax (FUTA/SUTA): District of Columbia
Federal law and guidance on this subject should be reviewed together with this section.
Authors: Stuart R. Buttrick, Susan W. Kline and Tareen Zafrullah, Faegre Drinker Biddle & Reath LLP
- The District of Columbia uses the common law test to determine who is an employee for state unemployment insurance (SUI) tax purposes. See Common Law Test.
- 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. The annual total SUI tax rate is based on a range of rates. Employers pay SUI taxes up to an annual taxable wage base. See SUI Taxable Wages, Taxable Wage Base and Contribution Rates.
- The District of Columbia's anti-State Unemployment Tax Act (SUTA) dumping law mirrors the federal SUTA Dumping Prevention Act. Under District law, employers that knowingly attempt to manipulate businesses to get a lower tax rate are liable for serious penalties. See SUTA Dumping.
- Employers are required to make SUI contributions and file quarterly SUI reports. In addition, employers that operate more than one establishment in the District of Columbia may be requested to submit Multiple Worksite Reports. See Quarterly Reporting Requirements; Multiple Worksite Reporting.
- An employer's account will not be relieved of charges for overpayments resulting from the employer's failure to properly respond to requests for information about benefit claims. See Benefit Overpayments.
- Employers that are required to pay quarterly SUI contributions are also required to pay quarterly contributions to fund paid parental, family and medical leave benefits based on a percentage of covered employees' gross wages and file related quarterly reports. See Quarterly Paid Family and Medical Leave Contributions and Reports.
- All employers in the District of Columbia must maintain records for each employee for five years and keep them available for inspection by the state Department of Labor. See Recordkeeping Requirements.