What Is a SUTA Number and How Do You Get One?

Understanding Your SUTA Number

A State Unemployment Tax Act (SUTA) number, sometimes known as a State Employer Account Number or Unemployment Insurance (UI) Account Number, is a unique identifier assigned to businesses by their respective state unemployment insurance agencies. This number tracks employer contributions to the state unemployment fund and benefits paid to former employees. It ensures that funds are available to provide temporary financial assistance to eligible workers who lose their jobs through no fault of their own.

Generally, any employer with employees is required to obtain a SUTA number, though specific thresholds for liability can vary by state. For instance, some states mandate registration if an employer pays $1,500 or more in wages during a calendar quarter or employs at least one worker for some part of a day in 20 different weeks within a calendar year. Other states may require registration as soon as one dollar is paid to an employee. Each state operates its own SUTA program with its own rules.

The SUTA number functions distinctly from the Federal Unemployment Tax Act (FUTA) and the federal Employer Identification Number (EIN). While FUTA is a federal payroll tax that also funds unemployment benefits, SUTA is entirely state-specific, with funds going directly into that state’s unemployment fund. The EIN, issued by the IRS, identifies a business for federal tax purposes, whereas the SUTA number identifies the business for state unemployment tax obligations.

Obtaining Your SUTA Number

Obtaining a SUTA number involves registering with the relevant state unemployment insurance agency, which might be the Department of Labor, Workforce Commission, or Employment Security Department. This registration is generally initiated once the employer meets the state’s specific liability thresholds. Many states offer online portals for registration.

To complete the registration, employers typically need to gather specific business information. This includes the business’s legal name, its Federal Employer Identification Number (FEIN), and its physical and mailing addresses. Details regarding the type of business entity, the date the first wages were paid, and the number of employees are also commonly requested. Some states may additionally require the North American Industry Classification System (NAICS) code.

The application process usually involves navigating to the specific state agency’s website and locating the employer registration section. Many states offer an online application that guides the user through the required fields. If online registration is not available or preferred, some states still provide options for registration via mail or phone. Completing all sections of the state’s unemployment insurance registration form with the gathered information is important to avoid delays.

After submitting the application, the timeline for receiving a SUTA number can vary. Some states provide the number immediately upon online registration. Other states may take a few days to several weeks for processing. For example, some jurisdictions might issue the number within three to five business days, while others could take between two to four weeks. It is advisable to factor in these processing times when planning business operations and payroll setup.

Managing SUTA Compliance and Payments

Once an employer has obtained their SUTA number, it becomes instrumental for ongoing compliance with state unemployment insurance regulations. A primary requirement is the submission of quarterly wage reports to the state unemployment agency. These reports detail employee names, Social Security numbers, gross wages paid, and sometimes hours worked, ensuring accurate tracking of contributions and potential benefit liabilities. Employers typically use their SUTA number to identify their account when submitting these mandatory reports.

The SUTA number is also used by the state to determine and adjust an employer’s unemployment tax rate. This rate is largely influenced by an “experience rating,” which reflects an employer’s history of unemployment claims. Employers with a lower number of former employees claiming unemployment benefits generally receive a more favorable, lower tax rate, while those with higher turnover or more claims may face higher rates. New employers typically start with a standard initial rate, which can range from 1% to 4%, and this rate adjusts after a period, often one to three years, as the business establishes its own claims history.

SUTA tax payments are generally required quarterly, aligned with the wage reporting schedule. Common payment methods include electronic funds transfer (EFT) or payments made through online portals provided by the state’s unemployment insurance department. Due dates for these quarterly payments are the last day of the month following the end of each calendar quarter. Timely payments avoid penalties, interest, and impacts on the employer’s tax rate.

Maintaining accurate payroll and employment records is important for SUTA compliance. These records provide the necessary data for preparing quarterly wage reports and can be used to verify information during audits by state agencies. Proper record-keeping supports accurate SUTA tax calculation and helps ensure employers meet obligations, which can also influence FUTA tax credits.