It is a new year. With that brings optimism and a chance to put a difficult and unprecedented 2020 behind us. However, it also is bringing bad news for businesses that have had “good” records regarding unemployment/reemployment claims. Florida, along with every other state, had unprecedented amounts of unemployment claims filed and Florida’s fund for paying out reemployment claims was depleted. Therefore, a rate increase was expected and here it is….
Starting January 1st, the Florida Department of Revenue has indicated a new minimum reemployment tax rate for employers. The rate now is .29% up from .1%. This is a 300% rate increase and we have already heard a lot of grumblings about it from the business community. This will impact the first quarter returns that are due by April 30th. This does not impact the rate for the fourth quarter of 2020 whose returns are due by February 1st.
Reemployment tax rate notices should have already been sent out. If you have not received that, then you should be getting it very shortly. If you disagree with your tax rate determination, you have 20 days from the date printed on the rate notice form (Form RT-20) to file a protest. Despite the previous statement, the Department has indicated that the protest deadline for 2021 tax rates is January 11, 2021. Note that all protests must be written and mailed, emailed or faxed by the applicable deadline. Protests should be sent to:
Department of Revenue
PO Box 6510
Tallahassee, FL 32314-6510
Email: Experience_Rating@floridarevenue.com
Fax – 850-488-5997
Other reemployment tax factors have not been changed. The maximum reemployment tax rate is staying at 5.4%. The initial reemployment tax rate for new employers remains at 2.7% and stays in effect for the first 10 quarters. After this time, the “new” employer can qualify for a lower tax rate. The Department uses a formula to calculate rate changes. The above tax rates apply to the first $7,000 of annual wages per employee. So, in the grand scheme of things, the reemployment tax maximum amount due is only going up from $7 per year to $20.30 per year, per employee.
A business can protect its tax rate by reporting all new and rehired employees to the Florida New Hire Reporting Center by the federal required due date, respond promptly to any weekly earnings verification request and provide complete and accurate employee separation information. The Department notes that noncomplying employers face increased tax rates, fines and/or penalties.
If you have any questions, you can reach out to the Florida Department of Economic Opportunity (Reemployment Assistance Program) at 800-204-2418. If that is a problem, you can feel free to reach out to our firm to discuss any reemployment tax questions or issues you face – including an reemployment tax audit. As with any Department of Revenue audit, preparation for the audit process is always a smart decision.
About the author: Mr. Parker is an associate in the Law Offices of Moffa, Sutton, & Donnini, P.A., based in the firm's Tampa office. Mr. Parker's practice concentrates on sales and use tax and includes state tax audits and controversies proceeding from audit through administrative litigation involving sales and use tax and all other state taxes including reemployment tax, communication service tax, cigarette & tobacco tax, motor fuel tax, and Native American taxation. Mr. Parker received his accounting degree, law degree, and L.L.M. in Taxation from the University of Florida. If you have any questions please do not hesitate to contact the firm at 813-775-2131.
About the Firm: At the Law Office of Moffa, Sutton, & Donnini, PA, our primary practice area is Florida taxes, with a very heavy emphasis in Florida sales and use tax. We have defended Florida businesses against the Florida Department of Revenue since 1991 and have over 100 years of cumulative sales tax experience within our firm. Our partners are both CPAs/Accountants and Attorneys, so we understand both the accounting side of the situation as well as the legal side. We represent taxpayers and business owners from the entire state of Florida. Call our offices today for a FREE INITIAL CONSULTATION to confidentially discuss how we can help put this nightmare behind you.
ADDITIONAL RESOURCES
2021 Florida Sales Tax Commercial Rent, published December 30, 2020, by James Sutton, CPA, Esq.
FL RT Tax Audits - The DOR is Trying to Raise Your Tax Rate, published October 10, 2018, by Matthew Parker, Esq.
An Employer's Perspective: FL RT Tax, published March 1, 2018, by James McAuley, Esq. BCS.
An Employer's Perspective: FL RT Tax (Part II), published April 5, 2018, by James McAuley, Esq. BCS.
FL RT Tax Audit: Independent Contract vs. Employee, published August 23, 2015, by James Sutton, CPA, Esq.