labor lawAdivision of labor law center

In the state of Alabama, many employers have to pay for the tax system that supports employee unemployment insurance, though many nonprofit companies do not have to worry about the issue.

But for non-farm related businesses, the requirements for taxation for unemployment insurance go a little something like this. You are liable for those taxes if you have employed one or more workers on a day in 20 or more different weeks. Those 20 weeks don’t have to be consecutive and they don’t even have to happen in the same year.

Another requirement is that you have paid a salary or wages adding up to $1500 or more in any quarter of the business calendar year, either the past year or the current year. You don’t have to meet both requirements as an employer. If you just meet one of those requirements as a business, then you are liable for unemployment insurance taxation.

If you determine that you might be liable to pay taxation for your employees’ unemployment insurance, then it’s up to you to contact the proper Alabama authorities at the Status Unit in Montgomery. You have to fill out the proper application form, which helps you to open an Alabama Unemployment Tax account. You are supposed to get this form in as soon as you become eligible to pay the unemployment taxes.

The new tax account rate for the state of Alabama for employers who are new to the system is a rate of 2.7 percent for the first $8000 of wages for each and every employee. After that, all of your rates are then determined by so called experience rating, which means that they base the rates on their experience with you as an employer and how many of your employees have gone on the unemployment dole.