If you are a reimbursable employer, you still need to file quarterly reports. However, you do not need to submit payments with them.
Instead, we bill you quarterly if there are any benefit charges to your account, even if you were not the former employee's last employer. You also are not eligible to remove benefit charges from your account.
If we determine we overpaid your former employee, we will issue you a credit when we recover the money.
Reimbursable employer eligibility
To be a reimbursable employer, you must be exempt from Federal Unemployment Tax Act (FUTA).
Eligible reimbursable employers can include:
- 501(c)(3) nonprofit organizations.
- Government entities and their political subdivisions.
- Federally recognized Native American tribes.
State, federal and military employers must be reimbursable. Local government accounts and subdivisions can choose to be taxable or reimbursable. So can 501(c)(3) nonprofit agencies.
A nonprofit organization needs to provide us a copy of its section 501(c)(3) letter.
Choosing a tax payment method
You need to submit the choice of tax payment method (PDF, 157KB) form to us. This form is how you choose your unemployment tax payment method — reimbursable or taxable. We need to receive it at least 30 days before the beginning of any calendar year.
When completed, sign and submit it via one of the following methods:
- Email: uifiles@esd.wa.gov.
- Mail:
Employment Security Department
Registration Unit
P.O. Box 9046
Olympia, WA 98507-9046 - Fax: 800-794-7657.
If you choose the reimbursable method, you need to use that method for at least 2 calendar years. Your account will remain reimbursable until either:
- You ask to change to the taxable method.
- We convert your account due to delinquent payments.
Bond requirements
You may need to post a surety bond or security deposit before we process your request. Not all employers need to do this. The exceptions are political subdivisions, nonprofit hospitals, colleges and universities.
If you are a new employer, we base your required bond's amount on your projected taxable payroll for the coming year. We multiply that by the industry average tax rate and round the result down.
If you are already a reimbursable employer, we base your required bond's amount on the individual wages of each employee for the previous 4 completed calendar quarters. We multiply that by the maximum taxable wage base for the coming year. We round the result down.
Billing for benefit charges
You'll receive your benefit charging statements quarterly instead of monthly.
Tax payments are due to us 60 days following the end of the calendar quarter. For example, quarter 4 ended on December 31, so quarterly bill payments are due on February 28.
We bill reimbursable employers the quarter after we paid unemployment benefits. For example, we would bill you in April for benefits paid January through March. Your payment would be due by May 31.
Payment is due even if any of the following are true:
- You are protesting the benefits.
- The employee has an overpayment.
- You reported wages for exempt employees in error.
We will give you credit for an overpayment once your former employee has repaid it. If the employee has an overpayment but is eligible for a waiver, we will still charge you.
Look at an example of a reimbursable employer's billing statement (PDF, 1,237KB). You can see what each section means.
Switching to a taxable employer
You will need to submit a choice of tax payment method (PDF, 157KB) form.
If you switch from reimbursable to taxable, we give you a new account number. The wages you report become subject to unemployment insurance tax.
If you switch to the taxable method, we will assign you the industry average rate. You pay this rate until you meet the requirements to become a qualified employer under state law, unless you are delinquent on your tax payments or reporting. You can read the definition of qualified employer on the state Legislature website.
A nonprofit organization that becomes taxable must remain taxable for one year. Local government agencies and political subdivisions must remain taxable for two years.
If you switch to this method, former employees may still be receiving benefits from wages reported while you were reimbursable. We will continue to send you a Quarterly Reimbursable Billing Statement. And you will still need to pay for benefits paid to your former employees while also paying your quarterly taxes.