Unemployment Insurance - Employer Services
Unemployment is an insurance program providing temporary, partial wage replacement to workers who are unemployed through no fault of their own. The program is funded by Unemployment premiums paid by employers based on the amount of wages paid for covered employment. The Unemployment Premium or "tax" is paid on the first $12,000 only in gross wages an employer pays to an individual in a calendar year.
*** Changes to UI Billing for Employers ***
Beginning in June, employers will receive two separate bills from Maine Revenue Services, one for withholding and one for unemployment insurance contributions. The bills look very similar and employers will still send all payments to MRS for processing through to MDOL. The bills show debt for the current quarter filing only and will not reflect prior debt owed to MDOL. Prior debt will still be billed by MDOL as in the past. This is the first step in modernizing the combined quarterly report process. Questions about this change can be directed to Maine Revenue Services withholding unit at (207) 626-8475 (press 1 then 4 from the menu) or by emailing to email@example.com.
- 8/26/2014: Sagadahoc County Man Convicted of Unemployment Fraud
- 8/22/2014: Maine Department of Labor Update for Employers Now Posted
Quarterly Tax and Wage Reports
- About tax and wage reporting
- Tax rate tables:
Legal and Compliance Information
- Independent Contractor vs. Employee: What You Need to Know
- Get the Facts on SUTA Dumping
- Liability and Exemption Laws
- Payroll Processor Disclosure to Employer
Links to Laws/Rules
- Unemployment Tax Law, Title 26, Ch 13
- Rules for Unemployment Security
- Laws and Rules Governing Unemployment Benefits
- Reasonable Compensation to S Corp Officers
S corporations must pay reasonable compensation to a shareholder-employee in return for services that the employee provides to the corporation before non-wage distributions may be made to the shareholder-employee. The amount of reasonable compensation will never exceed the amount received by the shareholder either directly or indirectly.
The instructions to the Form 1120S, U.S. Income Tax Return for an S Corporation, state "Distributions and other payments by an S corporation to a corporate officer must be treated as wages to the extent the amounts are reasonable compensation for services rendered to the corporation."
Several court cases support the authority of the IRS to reclassify other forms of payments to a shareholder-employee as a wage expense which are subject to employment taxes.