Posted on December 27, 2013

Unemployment Insurance No Longer Mandatory for Corporate Officers in Washington State

Corporations in Washington State will no longer pay state unemployment insurance taxes on their corporate officers, unless the corporation requests voluntary coverage for all its officers.

The previous law automatically covered all corporate officers for unemployment benefits unless the corporation asked to be exempted. The new law, which takes effect on December 29, 2013, exempts all officers of the corporation unless it applies for and is approved for voluntary coverage. Paycor clients should contact their specialist to make any necessary changes to their payroll calculations.

If a corporation wants unemployment insurance coverage for any of its corporate officers, it must cover all of them. Any corporation that wants to cover its officers must apply by March 1, 2014, if it wants coverage to continue uninterrupted.

Because of a different change to the law, corporate officers who are covered for unemployment benefits may now be eligible for benefits under new circumstances, even when some wages used on the unemployment claim are from the corporation.

Corporations that do not pay state unemployment insurance taxes on corporate officers must pay the full amount of federal unemployment (FUTA) taxes to the Internal Revenue Service.

For more information, visit the Washington State Employment Security Department’s website.