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How to Sign Your Business Up for Unemployment Insurance

If you run a business with employees, you are likely required to register for unemployment insurance (UI) to provide benefits for workers who lose their jobs through no fault of their own. Below is a step-by-step guide on how to register your business for unemployment insurance in the U.S.


1. Determine If Your Business Needs to Register for Unemployment Insurance

Most businesses with at least one employee must register for unemployment insurance. Requirements vary by state, but generally, you must register if your business:

✔ Pays wages of $1,500 or more in a calendar quarter
✔ Employs one or more employees for at least 20 weeks in a calendar year
✔ Is a nonprofit, agricultural, or household employer meeting state-specific criteria

Even if your business is new, it’s best to check with your state’s unemployment insurance agency to see if you need to register.


2. Get an Employer Identification Number (EIN)

Before registering for unemployment insurance, your business must have an Employer Identification Number (EIN) from the IRS. This number is used to identify your business for tax purposes.

📌 How to Get an EIN:

  • Apply online at the IRS website
  • Call the IRS at 1-800-829-4933
  • Mail or fax Form SS-4 to the IRS

3. Register with Your State’s Unemployment Insurance Program

Unemployment insurance is managed at the state level, so you must register through your state’s labor or workforce agency.

How to Register:

✅ Visit your state’s Department of Labor website
✅ Locate the Unemployment Insurance Employer Registration section
✅ Fill out the online registration form or submit a paper application
✅ Provide your EIN, business details, and payroll information
✅ Receive confirmation with your UI tax account number

Most states allow online registration, but some may require additional paperwork.


4. Set Up Unemployment Tax Payments

Once registered, your business will be required to pay unemployment insurance taxes at the state and federal levels:

1️⃣ Federal Unemployment Tax (FUTA) – Paid to the IRS

  • 6.0% on the first $7,000 of each employee’s wages
  • Some businesses qualify for a credit of up to 5.4%, reducing the rate to 0.6%
  • Paid through IRS Form 940

2️⃣ State Unemployment Tax (SUTA or SUI) – Paid to your state

  • Varies by state (usually 1% to 6% of employee wages)
  • Some states allow employers to deduct a portion from employee wages
  • Payment schedules depend on state requirements (quarterly in most cases)

Failure to pay unemployment taxes on time can result in penalties and interest charges.


5. Maintain Compliance and File Reports

Once your business is enrolled in UI, you must:

File UI tax reports (quarterly or annually, depending on state rules)
Pay unemployment taxes on time to avoid penalties
Keep accurate payroll records for at least 4 years
Respond to unemployment claims if a former employee files for benefits


6. Get Help If You Need It

If you’re unsure about state-specific requirements, check with your state’s Department of Labor website or contact a business tax professional.

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