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Reporting Wages and Paying Taxes - Paying Reimbursements

Reimbursement in lieu of paying quarterly taxes

This section applies only to nonprofit and governmental employers,Indian tribes and churches/religious organizations who have chosen and been approved to reimburse the Department of Economic Security for benefit payments charged to their accounts in lieu of paying quarterly taxes.

  1. Each quarter you must complete and submit an Unemployment Tax and Wage Report (UC-018) listing all employees' names, social security numbers, and total gross wages. No “excess” wages or taxes are computed, and no payment is included with the report.
  2. You will be notified when former employees file for benefits and will be provided the opportunity to protest the employee's receipt of benefits, based on the reason for separation, if you were the claimant's last employer.
  3. Whenever benefits are paid to former employees in a calendar quarter, you will receive a Benefit Charge Notice (UC-602) during the first month of the following quarter. A statement will accompany the notice specifying the amount due. That amount will be your proportionate share of benefit payments made that quarter, plus half of your share of extended benefits if you are a nonprofit employer, and the full amount of your share of extended benefits if you are a governmental employer or Indian tribe. Your payment is due on or before the last day of the second month following the end of the quarter in which the benefit claims were paid.

Additional provisions affecting Indian tribes

Arizona Revised Statutes, Section 23-751.01 provides that Indian tribes which fail to make payments, including assessments of interest and penalties, within 90 days of notice of the amounts due lose the option to make payments in lieu of taxes for the following tax year, unless full payment is made before the taxes for the next tax year are computed. This can also result in the tribe losing its Federal Unemployment Tax (FUTA) exemption and becoming liable to pay FUTA Tax at the full 6.2% rate.

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