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    Michigan Obligation Assessment Changes for 2013

    Article ID: 2001538


    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.


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


    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.

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