Everything an employer needs to know about paying Kansas unemployment insurance taxes.
If your small company employs people in Kansas, you must pay the Kansas unemployment insurance (UI) levy. The UI tax pays for unemployment insurance programs for qualifying workers. In Kansas, the state unemployment insurance levy is simply one of numerous taxes that companies must pay. Other major employer taxes not mentioned here include the federal unemployment insurance tax, as well as state and federal withholding taxes.
Varied states have different UI tax policies and rates. Here are the fundamental guidelines for Kansas’ UI tax.
Become a member of the Department of Labor.
As a Kansas employer, you must open a Kansas UI tax account with the Kansas Department of Labor (KDOL). Within 15 days of employing your first employee, you must register. KDOL will evaluate if you are due for UI taxes when you register. (The majority of employers are accountable.) If you are found to be accountable, the KDOL will assign you a six-digit employer serial number.
You may open an account with KDOL either online or in person. Go to KDOL’s User Registration page to register online. Use Form K-CNS 010, Status Determination Report, to register on paper. Blank forms may be downloaded from the KDOL website’s Reports and Publications area. There is no cost to register your company with IDES.
You will need a federal employer identification number to set up your Kansas UI tax account (EIN). You may get an EIN by visiting IRS.gov. In most cases, if you apply online, you will obtain your EIN very instantly.
UI Tax Liability Regulations
As a Kansas for-profit employer, you are typically obligated to pay state unemployment taxes if you fulfill any of the following conditions:
your gross payroll is $1,500 or higher in any calendar quarter
you have one or more employees who work for any portion of a day in 20 different weeks of the calendar year you acquire all or substantially all of a business or substantially all of the assets of another employer that is already subject to Kansas’s UI tax law (the Employment Security Act) or you are liable for federal UI taxes under the Federal Unemployment Tax Act (FUTA).
The first three items on the list are largely the same regulations that govern liability under FUTA. As a result, if you are due under FUTA, you are very certainly also liable for state UI taxes, and vice versa. Different restrictions apply to agricultural (farm) workers, domestic (in-home) workers, and employees of certain (but not all) non-profit organizations, which are not included here.
One piece of good news is that state UI tax payments are often deductible from FUTA taxes.
Wage Structure and Tax Rates
Each employee’s salaries are subject to UI tax up to a certain yearly limit. For many years, the taxable wage base in Kansas remained steady at $8,000. However, it has risen in recent years, first to $12,000 and subsequently to $14,000. The sum is still susceptible to change in the future.
The state UI tax rate for new employers might also alter from year to year. After several years of being constant at 4.0%, it has recently dropped to 2.7%. (Employers in the construction business get paid more.) Based on a “experience rating,” established employers are liable to a lower or higher rate than new firms. This includes, among other things, whether your company has ever had workers file claims for state unemployment benefits.
Check the Employer Tax Rates area of the KDOL website for current and historical information on wage bases and tax rates.
Submit UI Tax Reports and Payments Quarterly
UI tax reports and payments are due on the last day of the month after the end of each calendar quarter in Kansas. To put it another way:
Reports and payments for the first quarter are due on or before April 30.
Reports and payments for the second quarter are due on or before July 31.
Third-quarter reports and payments are due by October 31, and fourth-quarter reports and payments are due by January 31.
Reports submitted by mail are deemed filed on the day they are sent (postmark date).
Employers with 50 or more workers must file and pay online. Smaller businesses may file online or on paper. Electronic filing often entails filing online, which you may accomplish by visiting the KDOL’s KansasEmployer.gov website. However, there is an alternative to upload information online, which is not addressed here.
Use Form K-CNS 100, Quarterly Wage Report & Unemployment Tax Return, to file on paper. KDOL sends the quarterly report to each registered employer once a quarter. You may also obtain blank forms from the KDOL website’s Reports and Publications area.
If you fulfill the UI tax obligation criteria at any point throughout the year, you must complete a quarterly report for all quarters of that year. You must likewise make a quarterly report for each consecutive quarter, even if there were no reportable wages or contributions (payments) due. If you do not file, you will face a penalty.
Make a Public Notice (Poster)
You must display a notification (poster) about state unemployment claims in a visible location for all workers. The sign informs workers on the basics of applying for unemployment benefits. From the Posters part of the KDOL website, you may download a notification that satisfies all legal requirements (Form K-CNS 405, Unemployment Insurance).
Employees should not be misclassified as independent contractors.
Employers that hire independent contractors rather than employees are exempt from the UI tax. It is critical, however, that you should not misclassify an employee as an independent contractor. If you misclassify an employee, you may face penalties or fines.
Using Payroll Service Providers
You may decide that it is easier to delegate payroll obligations, including UI taxes, to an outside payroll agency. If this is the case, bear in mind that your company, or even you personally, may be held directly liable for errors made by an outside payroll firm.