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    Michigan Obligation Assessment Changes for 2013

    Article ID: 2001538

    Overview

    QuickBooks Payroll has implemented a new payroll item for the Obligation Assessment, in order to comply with the specific rounding requirements provided by the Michigan Unemployment Agency for the quarterly Unemployment Insurance (UI) and Obligation Assessment quarterly tax payments. Employers remitting the UI tax due are to round the UI tax to the nearest whole dollar. The Obligation Assessment tax due is not to be rounded.

    Assumptions

    You are an employer who pays wages in the state of Michigan and have an active QuickBooks Payroll subscription.

    Details

    When will these changes be available in QuickBooks?
    Intuit QuickBooks Payroll implemented support of the new Obligation Assessment payroll item in Payroll Update 21304.

    What do I need to do?
    You will need to download Payroll Update 21304 as soon as it is released. For more information on how to download and install a Payroll Update, click here.

    What if I subscribe to the Disk Delivery service?
    The next disk delivery is scheduled for late January and will include these updates. We highly recommend that you download and install the payroll update if you have internet access. Click here for more information and instructions.

    Step 1. Select Pay Employees, Start Scheduled Payroll or Payroll Setup to trigger the Add Mid-Year Tax Wizard.
    • The Add Mid-Year Tax Wizard process to set up the MI - Obligation Assessment tax item on your company and employees is provided below. (Employees must be subject to MI - Unemployment Company on the employee profile in order for the Wizard to be triggered.)

    Step 2. Click Next to follow the Wizard.

    Step 3. Select Yes, for the question does you MI - Unemployment Company rate include the rate for MI - Obligation Assessment.

    Step 4. Choose whether or not all of your employees are subject to this tax. In most cases, the answer will be Yes because you are subjectto MI- Unemployment Company for employees.

    Note: All employees will be marked as subject to MI - Obligation Assessment, including inactive and released employees.

    Step 5. Enter the Obligation Assessment rate assigned to your company. Click Next.

    Notice UIA 1771, Tax Rate Determination for Calendar Year 2013, provides the Obligation Assessment assigned for the calendar year.

    If you are subject to the Non-Reporting Penalty rate, SUTA Penatly Rate, and/or Solvency Rate, the Obligation Assessment rate should be increased by any of these applicable rates.  The agency requires that only UI tax amounts be rounded to the nearest whole dollar amount.  All other taxes are not to be rounded to the nearest whole dollar amount.

    Step 6. The following screen will be displayed. Click Next.



    The MI - Unemployment Company tax rate will be decreased by the rate entered for the MI - Obligation Assessment.

    Step 7. One of the following screens will be displayed, depending on if you have already created paychecks dated for 2013. Click Finish.

    Liability adjustments may be necessary to decrease tax amounts listed under MI - Unemployment Company. Click here for information on liability adjustments.

    If you leave the Wizard before finishing the set up, QuickBooks will automatically set up the payroll item in the Payroll Item List, but it will not apply the payroll tax item to any of the employee profiles. Follow the steps listed below to edit the MI - Obligation Assessment that was created and the MI - Unemployment Company in order to enter the applicable company tax rates.

    To edit the MI Obligation Assessment tax rates:

    Step1. Edit the payroll item to set up the MI - Obligation Assessment with the correct rate.

    Step 2: Edit the MI - Unemployment Company tax rate.


    Step 3. Edit the Employee Profile and choose the new payroll item on the Other tab of the Taxes Window.

    17 comments

    Richard2/6/2013

    10

    Why is this set up as a separate tax and not just included in the State Unemployment rate as the State includes it?

    Reply

    Jo Ann2/7/2013

    10

    Hi Richard,

    I am an Intuit employee and saw your comment. Because Michigan Unemployment Agency has provided specific rounding requirements for the quarterly Unemployment Insurance (UI) and Obligation Assessment taxes it is necessary to have two payroll items. The Obligation Assessment tax due is not to be rounded where the UI tax is.

    I have taken the steps to get the article updated to make this clear.

    I hope this helps you. Thank you for posting a comment.

    Lynn2/6/2013

    10

    Not helpful at all. The Wizard never came up and I went in to edit per the above and none of the screens looked like what is listed.

    Reply

    Jo Ann2/8/2013

    10

    Hi Lynn,

    I am an Intuit employee and saw your comment.

    It sounds like you may need to download Payroll Update 21304. The screens seen in this article are not visible until you are on the most recent tax table update. You can use The instructions in the article "Download the latest payroll tax table update" http://payroll.intuit.com/support/kb/1001166.html to help you. I have also posted a link to this article in the Related Articles section above.

    I hope this helps you. Thank you for posting a comment.

    Mary2/13/2013

    10

    What do I do if I didn't get the Letter from State of Michigan with my rate?

    Reply

    Kriz2/19/2013

    10

    Hi Mary,

    I'm from Intuit and noticed your comment. In case you don't get notices from your State Agency, you may contact them directly.

    The phone number for MI Unemployment Insurance Agency is 855-484-2636.

    I hope this answers your question. Thank you for posting a comment!

    Sharond2/15/2013

    10

    When I called intuit last week they inidicated I had all the updates and now when I opened payroll you tell me I don't. This is very confusing.

    Reply

    Kriz2/19/2013

    10

    Hi Sharond,

    I'm from Intuit and saw your comment. QuickBooks Payroll updates are released throughout the year because various agencies make changes to payroll tax calculations and tax forms during the year. From your comment, it appears that your QuickBooks automatic update is On which means that your QuickBooks automatically downloads payroll updates as soon as a new update is available. You just have to install these updates when prompted to ensure that you are on the latest release.

    Also, the article FAQs about QuickBooks Payroll Updates should provide more information on how to check if you have the latest update or not.

    I hope this addresses the confusion. We appreciate you posting a comment!

    Bill2/15/2013

    10

    We are a Church in the state of Michigan. As such my understanding is that we are exempt from this taxation.

    Reply

    Kriz2/21/2013

    10

    Hi Bill,

    I'm an Intuit employee and I saw your comment. You are correct, any church or church organization are not liable for Michigan unemployment insurance taxes.

    I hope this helps. Thank you for posting a comment!

    Cathleen3/31/2013

    10

    I saw the wizard, and I closed out of it to gather the necessary information. I does not appear again. How do I get back to it so I can update my info. Or, what do I need to do?

    Reply

    Kriz4/4/2013

    10

    Hi Cathleen,

    Closing the wizard before your company information was entered would automatically set up the payroll item in the Payroll Item list. All you have to do next is to edit the company tax rate of the payroll item created.

    Let me know if this helps! We appreciate you posting a comment!

    Jaema4/1/2013

    10

    We are a 501.c 3. Are we also not liable for Michigan unemployment insurance taxes?

    Reply

    RENEE4/4/2013

    10

    Very helpful!

    Reply

    MARY5/9/2013

    10

    I need to step through the Taxes/Other set up each and every time I change the file or attempt to pay my employees! How extremely frustrating to have to click through these screens for each of my 55 employees every pay day. Why does this continue to happen and how can I make it STOP???

    Reply

    Basil6/2/2013

    10

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    Reply

    Haleigh7/1/2013

    10

    Hi Basil,

    Your feedback is greatly appreciated!!

    Haleigh

    Comments can not be added at this time.

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