Everything New Hampshire employers need to know about paying unemployment insurance taxes.
If your small company employs people in New Hampshire, you must pay the New Hampshire unemployment insurance (UI) levy. The UI tax pays for unemployment insurance programs for qualifying workers. In New Hampshire, one of the key taxes that businesses must pay is the state unemployment insurance levy. New Hampshire, unlike most other states, does not have state withholding taxes. Other essential employer taxes that are not mentioned here include federal unemployment insurance and withholding taxes.
Varied states have different UI tax policies and rates. Here are the fundamentals of New Hampshire’s UI tax.
Sign up for New Hampshire Employment Security.
As a New Hampshire employer, you must open a UI tax account with New Hampshire Employment Security (NHES). Within 30 days of beginning business as an employer, you must open a UI tax account. (In general, the registration requirement also applies to a firm that acquires another business that is already an employer.) NHES will issue you a UI account number and a registration code after you have registered. You may use the code to create an online account with NHES for future reporting and payment of New Hampshire unemployment insurance taxes.
Use the Employer Status Report form for the mandatory first registration. Blank versions of the form may be downloaded from the NHES website’s Forms 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 New Hampshire 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.
Unemployment Insurance Tax Liability Regulations
If you own a for-profit company in New Hampshire, you are normally subject to state unemployment insurance taxes as soon as one of the following requirements is met:
you have one or more people working for some part of a day in 20 different weeks, not necessarily consecutive, in a calendar year you have paid gross wages of $1,500 in any quarter of a calendar year you are liable under the Federal Unemployment Tax Act (FUTA) and providing employment as defined in New Hampshire Law, or you acquire an employer who is already liable (technically known as successorship and not covered here).
The first two things on the list are regulations that also make a company accountable under FUTA, so you would be liable under both federal and New Hampshire UI laws at the same time. 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. In recent years, the taxable salary base in New Hampshire has remained steady at $14,000 per year. However, the quantity is always subject to change.
The state unemployment insurance tax rate for new employers, generally known as the basic starting tax rate, may also alter on a quarterly basis, owing to variable surcharges and reductions. Recently, the rate has usually been between 1.7% and 2.7%. 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.
Submit UI Tax Reports and Payments Quarterly
If you file on paper, UI tax reports and payments in New Hampshire are due on the last day of the month after the end of each calendar quarter. In other words, paper reports and payments are required by the following dates:
First quarter (ending March 31st) due by April 30th; second quarter (ending June 30th) due by July 31st
Third-quarter payments (ending September 30th) are due on or before October 31st, and fourth-quarter payments (ending December 31st) are due on or before January 31st.
Employers that file online get an extra two business days.
Use the Employer Quarterly Tax Report to file on paper. At the conclusion of each quarter, NHES provides blank reports to all employers. You may pay by cheque. Use New Hampshire’s WebTax system to file and pay your taxes online. If you file online, you may pay using Electronic Funds Transfer (EFT).
Even if you did not hire anybody during that quarter and no taxes were payable, you must submit a report. If you anticipate not employing anybody for one or more quarters, you may submit a written request for a waiver of filing obligations for that quarter. Aside from waivers, failure to file will result in 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 poster explains how and when an employee may petition for unemployment benefits. You may get a legal notice (Unemployment Notice) by visiting the Forms and Publications area of the NHES website.
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.
This page simply covers the most fundamental aspects of New Hampshire UI taxes. Check the IRS and NHES websites for the most up-to-date information to avoid fines for errors. NHES also publishes a comprehensive Employer Handbook, which may be downloaded from their website. In addition to state unemployment insurance payments, companies must also pay federal unemployment insurance and withholding taxes, as well as record new hiring.