Employers can reduce or “buydown” their current tax rate by paying all or part of past benefit charges. This might make sense for an employer under certain circumstances.
Typically, a tax rate buydown only makes sense if your tax rate for the current year is relatively high and you are expecting to have a significant amount of taxable payroll in the near future.
If you decide to buy down your tax rate, your payment will be applied to the most recent benefit charges first.
NOTE: The Tax Rate Buydown option will only display during the first 120 days of the calendar year.
There is a calculation tool in your online employer account to assist you, see Forecast Tax Calculator.
To buydown your tax rate:
- Log in to your account at www.uimn.org
- On My Home Page, select Account Maintenance.
- Select Process Tax Rate Buydown.
- Enter the amount you want to pay in the Tax Rate Buydown Payment field, and then select Calculate.
The adjusted Experience Rate will display along with the Tax Rate Buydown Payment amount.
- If the Tax Rate Buydown Payment and adjusted Experience Rate are acceptable, select Next.
If not acceptable, select Previous to perform another calculation.
- Check the checkbox indicating that you agree to make a payment for the Tax Rate Buydown.
- Select Make Payment.
- Enter the bank account information, and then select Next.
- Confirm your banking information and the payment effective date, and then select Submit. The Receipt of Payment page will display.
To print the receipt, select Printer Friendly Receipt.
- Select Next. The current year's Unemployment Insurance (UI) Determination of Tax Rate page will display.
For more information about tax rate buydowns, visit the Employer Handbook: Tax rate buydown page.