Chapter 1 Employer Taxes and Wage Reporting
Section 4 - Contribution Reports
Special Reimbursable Accounts
Instructions for Filing the Quarterly Contributions Report (NJ-927) and Submitting Payments
Due Dates of Reports
Penalties for Failure to File Reports
Adjustment to Reports
Credit Against the Federal Unemployment Tax
If you are an employer subject to the provisions of the New Jersey Unemployment Compensation Law, you are required to file an Employer’s Quarterly Report for each calendar quarter. As an employer subject to the law, you are also subject to the provisions of the New Jersey Temporary Disability Benefits Law, including the Family Leave Insurance program.
Exception: Domestic employers (those who employ only household workers) file the Employer’s Quarterly Report for Household Workers (Form NJ-927H) only once each year, reporting gross, excess and taxable wages and paying contributions due for each calendar year by January 30 of the next year. This form also allows employers to report and pay gross income tax withheld from workers.
Contributions under the Unemployment Compensation Law are required of all subject employers and covered workers. Contributions under the Temporary Disability Benefits Law are also required if the State Plan of disability insurance is in force.
Exception: Nonprofit organizations exempt under Section 501(c)(3) of the Internal Revenue Code may elect to reimburse the Unemployment Trust Fund for unemployment benefits paid instead of making regular contributions. (See Chapter I, Section 6, Special Notes for Non-Profit Organizations.)
Exception: A governmental entity or instrumentality is not automatically subject to the provisions of the state’s Temporary Disability Benefits Law for temporary disability benefits, but may voluntarily elect this coverage. (See Chapter II, Section 5, Temporary Disability Insurance.) However, these same governmental entities or instrumentalities are automatically subject to the provisions of the state Temporary Disabilities Benefits Law for Family Leave Insurance benefits.
Exception: A governmental entity must reimburse the Unemployment Trust Fund for unemployment benefits paid instead of making regular contributions, but may voluntarily elect to pay contributions, effective January 1 of a calendar year, by filing written notice with the Division of Employer Accounts not later than February 1 of such year. This election must remain in effect for at least two full calendar years and may be terminated by filing written notice not later than February 1 of the year termination is to be effective.
The monthly counts reported should not be a restatement of the summary count of employees reported on the Employer Report of Wages Paid (Form WR-30). The summary count from Form WR-30 represents a count of all workers who were employed during the quarter. Monthly employment reported on the Employer’s Quarterly Report reflects payroll counts for the pay period including the 12th of each month. The summary count from the WR-30 will generally be greater than or equal to any of the monthly payroll counts from the NJ-927. At no time should any monthly employment figure reported on the Employer’s Quarterly Report exceed the summary count of employees reported on the Employer Report of Wages Paid for the same quarter.
For questions about reporting monthly employment counts on the Employer’s Quarterly Report (Form NJ-927), contact the Covered Employment Statistics unit at (609) 984-5586 or (609) 984-5589.
Certain sick leave payments and continuation pay for family leave made by employers to employees for periods of disability are considered wages for both tax and benefit purposes under the Unemployment Compensation and Temporary Disability Benefits laws.
Types of sick leave payments and continuation pay for family leave deemed wages and therefore taxable are:
1. Continuation of pay during period of sickness or injury or for periods of family leave
2. Payment of the difference between temporary disability benefits paid under the State Plan or an approved private plan and full salary
3. Payment of the difference between Workers’ Compensation benefits and full salary
4. Payment of unused sick leave made to an employee while still in employment
5. Payment of the difference between family leave insurance benefits paid under the State Plan or an approved private plan, and full salary.
Types of sick leave payments and continuation pay for family leave deemed benefits and therefore not taxable are:
1. Benefits paid from the State Plan for temporary disability insurance
2. Benefits paid by an insurance carrier under an approved private plan
3. Benefits paid by a union under an approved private plan
4. Benefits paid by the employer under an approved self-insured private plan
5. Benefits paid for work-related injury under Workers’ Compensation
6. Benefits paid to employees in the public sector for work-related illness under Sick Leave Injury (SLI)
7. Payment of sick leave made after retirement or separation from employment
8. Family leave insurance benefits paid from the State Plan
9. Family leave insurance benefits paid by an insurance carrier under an approved private plan
10. Family leave insurance benefits paid by a union under an approved self-insured private plan
11. Family leave insurance benefits paid by the employer under an approved self-insured private plan.
Benefits paid by a private plan employer or an approved self-insured private plan for temporary disability must apply the following rules to determine if payments constitute taxable wages:
(a) Payments made to employees under an approved private plan are considered taxable remuneration, if payments are for a period of less than seven consecutive days following the date of disability.
(b) Payments made for periods after the seventh consecutive day following the date of disability are not considered taxable.
(c) If the period of disability extends to the twenty-second day of disability and payment is made for that twenty-second day, then the first seven days, referred to in (a) above, are not considered taxable.
Family leave insurance benefits payments
(a) Family leave insurance benefits payments made to employees under an approved private plan are considered taxable remuneration if the payments are for a period of seven or less consecutive days following the first day that the individual establishes a claim.
(b) Family leave insurance benefits payments made for periods after the seventh consecutive day following the first day that the individual establishes a claim are not considered taxable remuneration.
(c) Family leave insurance benefits payments made for seven or less consecutive days following the first day that the individual establishes a claim referred to in (a) above are not considered taxable remuneration when:
Payments in kind for personal services such as meals, board, lodging or any other payment in kind received by a worker from his/her employing unit in addition to or in lieu of (rather than as a deduction from) money wages are deemed to be remuneration paid by his/her employing unit. The Department of Labor and Workforce Development will determine or approve the cash value of such payments in kind. Such cash value will be used to determine the wages payable or paid to such worker and to compute contributions due under the law.
Money value for board and room, meals and lodging are treated as follows:
1. Where a money value for board and room, meals and lodging, or for any such items furnished to a worker is agreed upon in a contract of hire, the amount agreed upon will be deemed the cash value of such item or items.
2. The Director will establish rates for board and room, meals and lodging furnished in addition to, or in lieu of, money wages, unless the employer can establish different costs determined by generally accepted accounting principles. The rates for 2012 are:
Full board and room, per week
Meals, per day
Meals -- If less than 3 meals per day, the individual meals will be valued as follows:
Breakfast (meals served between 12:01 a.m. and 11:00 a.m.)
Lunch ((meals served between 11:00 a.m. and 4:00 p.m.)
Dinner (meals served between 4:00 p.m. and 12:00 p.m)
Lodging, per week
NOTE: These amounts are used for unemployment and temporary disability insurance purposes only when the employer does not assign value to such payments. They have no bearing on the New Jersey Wage and Hour laws or regulations or the federal Fair Labor Standards Act (FLSA) and regulations. Rates for board and room, meals and lodging under the New Jersey Wage and Hour laws or regulations may be found at N.J.A.C. 12:56-8, 12:56-13 and 12:56-14. Under the FLSA, these rates may be found at 29 U.S.C. 201 et seq., and 29 CFR Part 531.
The following types of remuneration are also considered wages:
1. Separation pay if made under a contractual obligation or by custom.
2. Payment of employees’ portion of federal or state income tax, Social Security tax or unemployment and temporary disability taxes.
3. Distributions of income to officers of Subchapter “S” corporations when paid, if the officers performed any services for the corporation.
4. Employee payments to IRA or other deferred compensation plans that are withheld from gross remuneration.
5. Employer contributions to employees’ cash or deferred arrangements under Internal Revenue Code Section 401(k), to the extent that the employee could have elected to receive cash in lieu of making contributions.
6. Employer contributions to a cafeteria plan arrangement pursuant to Section 125 of the Internal Revenue Code is taxable remuneration to the extent that the employee could have elected to receive cash in lieu of the employer making the contribution.
7. Employer contributions on behalf of, or reimbursements to, an employee under a Dependent Care Assistance program.
8. If a Dependent Care Assistance program is financed by an employee’s voluntary salary reduction, remuneration will be that amount the employee could have received in lieu of making the contribution.
9. Remuneration resulting from a below-market interest rate loan is taxable to the extent it is determined to be income for the purposes of FUTA.
10. When personal use of a company vehicle is present, the value of such use as determined by Section 61 of the Internal Revenue Code is considered remuneration.
11. Residual payments made to entertainers for reuse of commercial recordings are taxable if the original services were performed in this state.
12. All wages paid to aliens are taxable and reportable under a valid Social Security number.
13. Stock options are taxable to the extent that the employee could elect to receive cash in lieu of them.
The taxable wage base changes each year, and is 28 times the statewide average weekly wage paid to workers subject to the law. The Commissioner of Labor and Workforce Development determines this statewide average wage on or before September 1 of each year.
Legislation enacted in 2001 established a Supplemental Workforce Fund (SWF) for Basic Skills to provide basic skills training to qualified workers. Effective July 1, 2001, each employer’s unemployment insurance tax rate is reduced by .0175%, with the corresponding reduction paid into the SWF. Effective January 1, 2002, workers’ tax rates are also reduced by .0175%, with this amount paid into the new fund. In the tables in this section and in Section 5 (Chapter I), the tax rates for the SWF and the Workforce Development Partnership Fund (WF) have been combined.
Except for employers who become subject due to the “successor” provisions of the law, most new employers are assigned basic “starting” rates. The basic contribution rates for unemployment insurance and State Plan disability insurance coverage are subject to change, depending on the condition of the Unemployment Trust and Disability Benefits Funds, respectively. For a full explanation of contribution rates and experience rating, see Chapter I, Section 5.
New employer rates for Unemployment Insurance (UI), State Plan Temporary Disability Insurance (DI), Workforce Development Partnership (WF), Supplemental Workforce (SWF), and Health Care Subsidy (HC) for the most recent several years click here.
The workers’ contribution rates and maximum contributions to be deducted for Unemployment Insurance (UI), State Plan Disability Insurance (DI), Workforce Development Partnership (WF), Supplemental Workforce (SWF), and State Plan Family Leave Insurance (FLI) for the most recent several years click here.
Find more information on Family Leave Insurance (FLI) online here.
Governmental employers that have elected coverage under New Jersey’s Temporary Disability Benefits Law will continue to remit the full worker contribution along with the employer contribution when filing form NJ-927. Governmental employers covered under the State Plan for Family Leave Insurance will also remit the full worker contribution for family leave. For the most recent several years of worker withholding rates click here.
You may view instructions for completing the NJ-927 report by choosing “Help” at the bottom of each page of the online report. To see individual line instruction, select the line number of the online report. We recommend that the person responsible for filing the report read these instructions carefully.
Payments must be submitted by Electronic Fund Transfer (EFT), credit card or E-check. Find information about electronic payment options online here.
Domestic employers should refer to the first “Exception” under “Contribution Reports,” Chapter 1, Section 4, about annual filing.
It is mandatory that all employers, including reimbursement-option employers, submit these reports. The reporting form must be completed and returned even if you, the employer, have had no payroll in the quarter.
If you file the contribution report late, you will be charged $10.00 a day for each day of delinquency up to and including the fifth day, after which the charge is a penalty of $10.00 a day or 25 percent of the amount of contributions due for the period covered by the report, whichever is less. If you file a contribution report late on which no contributions are due, the maximum penalty is $50.00.
If you fail to pay the contribution when due, the law provides that the amount of the taxes due will carry interest at the rate of 1.25% for each month from the due date until the date payment is received.
New Jersey faces a potential FUTA credit reduction in 2013 of 0.6 percent because of outstanding federal loans. Federal legislation to eliminate the FUTA credit reductions for federal taxable years 2011 and 2012 in states with outstanding loan amounts is currently pending.
As of June 30, 2011, the 0.2 percent FUTA surtax expired, reducing the FUTA tax from 6.2 to 6.0 percent. Federal legislation to restore the surtax is also currently pending.