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Missouri Automation Surcharge
Article ID: 1012351
Overview
Background:
Missouri General Assembly House Bill 2041 allows for the establishment of an ?unemployment automation fund.? The sole purpose of this fund is to create an automated system to improve the administration of the state?s unemployment insurance program. Information pertaining to the Automation Surcharge can be found on the Agency?s website. Here are some highlights of the tax:
- Tax Name: Automation Surcharge
- Effective: August 28, 2008 for tax years 2009, 2010, and 2011
- Employer Paid Tax
- Assessed Rate: 0.05% of employer?s total taxable wages for the twelve-month period ending the preceding June 30th
- Employers unemployment insurance rate will be reduced by 0.05% for the whole tax year
- Employers will be assessed on their first quarter 2009 Form MODES-4-7, Quarterly Contribution and Wage Report
- Contributions to the Automation Surcharge will not be used for future rate calculations.
- NOT reportable to IRS Form 940 as contributions paid
As a result of these changes, the state has revised the Form MODES-4-7, Quarterly Contribution and Wage Report. The 2009 Form MODES-4-7 will include a new line (Line 12) to report the Automation Surcharge tax amount due.
Information
Frequently Asked Questions
How do I know if I?m affected?
You may be affected if you currently make unemployment insurance contributions in Missouri or currently have a valid Missouri Employer Account No.
You may be affected if you currently make unemployment insurance contributions in Missouri or currently have a valid Missouri Employer Account No.
When is the new Automation Surcharge tax effective?
The Missouri Automation Surcharge is effective August 28, 2008 for tax years 2009, 2010, and 2011.
When will I be informed that I will be subject to the Automation Surcharge?
The Missouri Department of Labor and Industrial Relations, Division of Employment Security began notifying employers on their unemployment insurance tax rate statements that were mailed to each employer in November 2008.
When will I be notified of the tax amount due for the Automation Surcharge?
You will be notified of the tax amount due for the Automation Surcharge
on your 2009 pre-printed first quarter report, Form MODES-4-7, Quarterly Contribution and Wage Report provided by the Department of Employment Security.
Note: The Automation Surcharge will be assessed and due on your first quarter reports only.
When is Form MODES-4-7 and payment due?
Form MODES-4-7 along with your payment is due on or before the last day of the month following each calendar quarter - in this case April 30, 2009.
Will QuickBooks support the new Automation Surcharge?
QuickBooks will NOT be supporting this new tax.
Note: QuickBooks Enhanced Payroll will be supporting the revised version of Form MODES-4-7, Quarterly Contribution and Wage Report, in Payroll Update 20908 to be released in mid-March.
Since QuickBooks is not supporting this new tax, what do I need to do to insure that my first quarter report is filed correctly?
The steps provided below will enable you to file and pay your Missouri quarterly taxes correctly.
Step 1: Set up a custom payroll item.
- For QuickBooks 2007 and above: From the Employees menu bar, select Manage Payroll Items; then select New Payroll Item.
- For QuickBooks 2006: From the Employees menu bar, select Payroll Item List; then on the Payroll Item tab, select New.
- On the Select setup method slide, select the Custom Setup radio button; then click Next.
- On the Payroll item type slide, select the Other Tax radio button; then click Next.
- On the Other tax slide, click on the drop-down list and choose User-Defined Tax; select the Tax is paid by the company radio button; then click Next.
- On the Name used in paychecks and payroll reports slide, enter MO ? Automation Surcharge; then click Next.
- On the Agency for company-paid liability slide, enter Missouri Division of Employment Securityin the Enter name of agency to which liability is paid field. If prompted with Vendor Not Found slide, click Quick Add. Enter your Missouri Employer Account No. (Format: 999999-9-999-9999)in the Enter the number that identifies you to agency field; then click Next.
- On the Tax tracking type slide, click on the drop-down list and choose None; then click Next.
- On the Calculate based on quantity slide, click on the Neither radio button; then click Next.
- Skip the Default rate and limit slide; then click Next.
- Then click Finish.
- Verify on the MO ? Unemployment Company payroll item that Missouri Division of Employment Security has been entered on the Enter name of agency to which liability is paid field and your Missouri Employer Account No. (Format: 999999-9-999-9999) has been entered on the Enter the number that Identifies you to agency field.
Step 2: Install Payroll Update 20908 once it has been release. Payroll Update 20908 will include the revised version of Form MODES-4-7.
Step 3: Prepare your Form MODES-4-7 in QuickBooks. Refer to your 2009 pre-printed first quarter Quarterly Contribution and Wage Report and enter the Automation Surcharge tax amount due on Line 12. Print the form once it is completed.
Step 4: Create a payroll liability adjustment for the Automation Surcharge tax due amount.
- For QuickBooks 2007 and above: From the Employees menu bar, select Payroll Taxes and Liabilities; then select Adjust Payroll Liabilities.
- For QuickBooks 2006: From the Employees menu bar, select Process Payroll Liabilities; then select Adjust Payroll Liabilities.
- In the Date field, enter today?s date.
- In the Effective Date field, enter today?s date.
- In the Adjustment is for: field, click on the Company radio button.
- In the Item Name field, click on the drop-down and select MO ? Automation Surcharge.
- In the Amount field, enter the Automation Surcharge tax amount provided on your pre-printed first quarter report.
- In the Memo field, enter a memo reflecting the Automation Surcharge adjustment.
- Click OK.
Step 5: Create a custom liability check.
- Make sure that the name of agency to which liability is paid and your Missouri Employer Account No. are the same on both the MO ? Unemployment Company and MO ? Automation Surcharge payroll items (as provided in Step 1 #6)
- For QuickBooks 2007 and above: From the Employees menu bar, select Payroll Taxes and Liabilities; then select Create Custom Liability Payments.
- For QuickBooks 2006: From the Employees menu bar, select Process Payroll Liabilities; then select Pay Payroll Liabilities.
- In the Select Date Range for Liabilities window, choose the date range for which you want to pay payroll liabilities, for example: 1/1/2009 through 3/31/2009; then click OK.
- In the Pay Liabilities window, indicate whether you plan to print your check (by checking the check box) or write them by hand (un-check the check box).
- Click the Bank Account drop-down and choose the bank account from which to pay your liabilities.
- In the Check Date field, enter the date to appear on your liability payment check.
- Choose whether to review each check individually or to create them without reviewing.
- Verify the date range shown in the Show Payroll Liabilities fields.
- Select the liabilities you want to pay now. In this case, select by checking MO ? Automation Surcharge and MO ? Unemployment Company.
- Click Create.
- If you selected Review, review your checks; then click Save & Close.
- Print your payroll liability check (if you checked the check box as provided in Step 5 #5) by clicking on the Home page. In the Banking section, click on Print Checks; click OK; verify your settings; then click Print.
