If you have a business with employees in Florida you would generally have to pay re-employment (formerly unemployment) tax. According to the Florida Department of Revenue you are subject to the re-employment tax if you paid wages of at least $1,500 in any quarter or you employed at least one worker for 20 weeks during the year. You would also be subject to Florida re-employment tax if your business is liable for the federal unemployment tax as a result of employment in another state.
Agricultural employers are subject to Florida re-employment tax if they paid $10,000 in cash wages in any quarter or employed five or more workers in 20 different calendar weeks. In this case other employees would also have to be reported even if the wages paid to them were less than $1,500 in any quarter or their employment was less than 20 different weeks.
Nonprofit employers, except for churches and church schools, are covered by Florida re-employment if they employ four or more workers in 20 different calendar weeks this year or last year. And employers of employees who perform domestic services are subject to Florida reemployment tax if they paid $1,000 or more in wages in any quarter during the current or prior year.
For re-employment tax purposes, the Florida Department of Revenue defines an employee as a person who is subject to the will and control of the employer, in terms of not only what shall be done but also how it shall be done. Corporate officers who perform services for the corporation are considered employees regardless of whether they receive a salary or other compensation.
The services performed by a sole proprietor or a partner in a partnership or a member of a limited liability company treated as a partnership or sole proprietorship for federal income tax purposes are not subject to Florida reemployment tax.
Salespersons are considered employees even if they are paid only by commission. But there are exceptions for real estate agents, insurance agents, and barbers who are paid only by commission. If they are paid by salary or salary and commission, they would be subject to Florida reemployment tax.
Independent contractors who are not subject to the will and control of the employer would generally not be considered employees and would not be subject to the re-employment tax. For an independent contractor, the employer can determine the results that are expected but does not control the methods used to accomplish those results. How the workers are treated, and not a contract or the issuance of a 1099 form, determines how workers are classified for re-employment tax purposes.
New businesses are required to report their initial employment in the month following the first quarter of employment. A Florida Business Tax Application, Form DR-1 must be filed. You can register your business for Florida Re-employment Tax online. Once you are registered you are assigned an account number.
If you have employees working in more than one state there are four tests to apply to determine to which state the employees should be reported for unemployment or re-employment tax purposes. The first test is where the employee’s services are performed. If all or the majority of the services are performed in Florida and services performed outside the state are only occasional or short-term, the employee’s wages should be reported in Florida.
If the employee’s services are distributed between two or more states, the second test is the employee’s base of operations. If no services are performed in the employee’s base of operations, the third test is the place of direction or control. This would generally be the company’s headquarters. If there is no base of operations and the employee’s services are not performed in the state of the employer’s direction or control, the fourth test is the employee’s state of residence.
The Florida re-employment tax applies on the first $8,000 in wages paid to each employee during a taxable year. The initial rate for new employers is 2.7%. According to the Florida Department of Revenue, this rate remains in effect for 10 quarters. Then the rate is adjusted based on experience. The maximum rate is generally 5.4%.
Employers with employees who work in more than one state during the year, who work in another state and then transfer to Florida, can take credit for the wages paid in the other state up to $8,000 in calculating the re-employment tax liability in Florida.
You must file an Employer’s Quarterly Report each quarter. The due dates are April 30, July 31, October 31 and January 31. Employers of domestic employees who are approved to file annually are mailed a Re-employment Tax Annual Report for Employers of Domestic Employees Only in December. This annual report is due by January 31 of the following year.
The quarterly report must be filed even if no tax is due, either because no wages were paid during the quarter or because the limit subject to re-employment tax has already been reached in a prior quarter.
Newly hired and re-hired employees must be reported within 20 days of the employee’s hire date on the Florida New Hire Reporting Center.
You can file and pay Florida reemployment tax online. If you do not file online, a preprinted Employer’s Quarterly Report will be mailed to you each quarter.
Employer Guide to Reemployment Tax, Florida Department of Revenue
File and Pay Taxes / Fees, Florida Department of Revenue
Florida Department of Revenue Employer’s Quarterly Report, Florida Department of Revenue
Multi-State Unemployment Tax Compliance: Are You Paying Too Much? WTAS
Registration and Account Maintenance, Florida Department of Revenue
Welcome to the Florida New Hire Reporting Center,
What Employers Need to Know About Florida Reemployment Tax (formerly Unemployment Tax), Florida Department of Revenue