What is Unemployment Insurance?
Unemployment Insurance (“UI”) is a federal-state program developed and financed through the Federal Unemployment Tax Act (“FUTA”) and paid by employers’ state UI taxes (or contributions). Your state taxes are regulated under the State Unemployment Tax Act (“SUTA”). Benefits are paid to employees that are unemployed through no fault of their own, which enables employees who have been laid off to remain in the area to be available for re-employment. The program stabilizes the local and state economies by preventing a sharp drop in consumer spending during periods of unemployment. Who pays Unemployment Insurance? Employers pay quarterly UI contributions (“UI tax”) once they meet the employer qualifications under Indiana Code § 22-4-7 (see section II-A). Employers must register with IDWD for an employer account. UI tax is paid to IDWD. IDWD holds these funds in trust for the payment of UI benefits. UI tax is not deducted from employees’ wages. Who is an Employer? An employer is an individu
