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Plain Language Summary of 2011 UI Law Changes

A complete Plain Language Summary (PDF) of Wisconsin Act 198 and 236

Summary of Items in 2011 Wisconsin Act 198 and Act 236

Tax Changes

Simplify rating of contributions for successor employers

Current law enacted in 2005 requires a successor employer to report payrolls under two different tax contribution rates within the year of business transfer, causing confusion and resulting in late and incorrectly filed contribution reports, and FUTA certification problems with the IRS.

For employers already subject to the UI law who are deemed successor employers, under Act 198, the tax contribution rates will be redetermined effective the first day of the calendar year following the business transfer. Prior law provided the redetermination of the tax rate was effective the first day of the calendar quarter following the date of the business transfer.

EFFECTIVE DATE for amendment of s. 108.16(8)(h): Transfers of business occurring after December 31, 2011.

Modify interest rate on delinquent tax payments

Employers are presently charged interest on delinquent payments of state UI taxes at the rate of one percent per month, or 12% annually. Act 236 changes the interest rate to a monthly rate that annualized is equal to the greater of: (a) 9%; or (b) 2 percent more than the prime rate as published in the Wall Street Journal as of September 30 of the preceding year, for each month or fraction of a month that the employer is delinquent.

Act 236 will reduce interest recoveries from employers in the current (low interest rate) economy. The change will not directly impact the UI reserve fund because interest is credited to the interest and penalties account.

EFFECTIVE DATE of s. 108.22 (1) (a): First applies with respect to accrual of interest for the month of August 2012.